[Make up blog for 24 September]
The atmospheric concentration of carbon dioxide in the atmosphere recently passed 390 parts per million with slowing down. Surprisingly, the United States leads the world in carbon emission cuts, with 7.7 percent reduction since 2006. I equate this to winning the “most improved” award on a test- usually getting a low score to an average one. All the same, why hasn’t the success gotten more attention? Other than deceptive climate news coverage, a slump in the economy, fallacy–filled legislative comments, we have no true carbon policy! President Obama’s CAFE standards or carbon pollution standard for coal-fired power plants take steps to reduce CO2 emissions, yet no legislation effectively prices non-cyclical anthropogenic carbon dioxide emissions. Naturally, concerned citizens have found other ways to reduce their carbon footprint.
One major route is by buying carbon credits. When an individual or company emits one ton of carbon dioxide, a company can buy credits ranging from $1 to $100 to attest that the money led to another ton being prevented from entering the atmosphere. Websites sell credits for transportation emissions, farming, and many other carbon-causing activities. The money from the credits then goes to projects such as wind farms or tree planting. Several companies tout the different projects they perform, and in what part of the world they do so. Here are some interesting things to know about buying carbon credits:
-Your money is not going to the projects.
Ideally, 100% of the personal donations would be directly attributed to keeping carbon in the ground, but that is not always the case. Forestry initiatives contain a transaction cost around 15% the total paid. The Clean Development Mechanism (CDM) of the Kyoto Protocol is estimated to contain 12-33% of the investment costs siphoned for administrative purposes, and the reports suggest further irregularities as well. Some companies are now advertising having already paid for administrative costs, and hopefully more follow.
-Money even bypasses the carbon credit companies.
On a national scale, carbon trading schemes have become massive, yet the major issue of price volatility still remains. On one hand, the lower prices keep offsets affordable in economic downturns, but the uncertainty leads to higher profits for bankers. Prominent Yale environmental economist analyzed the volatility of carbon prices in trading markets and predicted that the fluctuations will be greater than those of the stock market or oil prices. The creators of these carbon programs make large amounts of money as well. The magnitude of the global carbon trading market could potentially collapse, so many improvements need to be made for more participation.
-The credits are not always the determining factor.
On their site, Stonyfield organic yogurt highlights their various sustainability initiatives, one of which being the first company to offset 100% of its energy use with renewable energy. Stonyfield has been a leader in organic farming and climate issues, yet the site contains very few details about the nature of their wind energy credits. Wind developers usually receive about $50 per megawatt hour of electricity and $20 each from tax breaks and depreciation. At $90 per megawatt hour, the projects would have continued without an additional $2 from the carbon credits. More companies are addressing the additionality of projects by examining intrinsic financial costs and regulatory requirements.
-Credits do not necessarily lower carbon.
As the renewable energy or tree planting project is carried out apart from the carbon credit investors’ operations, the carbon credit companies assume definite energy development in the region. A large portion of the wind energy credits go towards turbines in west Texas, an area with low population density. Not only do the companies physically distance sustainability from their process while advertising the opposite, an understood standard of increased energy usage is assumed. Bloomberg posted a great article about carbon credits, titled “Little Green Lies,” in which a “corporate sustainability advocate” described how a company used carbon credits “to turn a 19% spike in emissions since 2001 into what it claims to be a 15% decline”. Many carbon credits are directed towards installing landfill or manure gas generators that burn the generated methane. Although methane is over 20 times more harmful than CO2, the landfills or livestock farms are not effectively “penalized” for their carbon emissions. The money would be better spent discouraging activity that creates large amounts of municipal trash and sewage waste.
-Credits lower carbon.
For individuals struggling to locally reduce their carbon footprint, buying carbon credits is still one of the best ways to do so. After accounting for administrative and transaction costs, individuals can calculate the cost per ton of carbon dioxide abated. If it is lower than the cost of investment at home or at the business, they should follow through. Unfortunately, the carbon credits often goes at odds with the “think global act local” mindset. New York State Senator George Maziarz proposed a series of bills that would divert New York coal plants’ investments from carbon credits to local renewable energy or cleaner fuel. Thus, energy investment stays within the state instead of from Canada, and according to the Sierra Club, state residents support cleaner energy even with a rate increase. Regardless, the CDM has recently saved its billionth ton of CO2 from going into the atmosphere.
With current carbon reductions failing to reduce global warming, every option to address carbon pollution should be addressed. 75 percent of Americans support regulating carbon dioxide as a pollutant, and 60 percent support revenue-neutral tax on carbon. A tax has the potential to reduce $1.2 trillion, with a t, from the federal deficit in less than ten years, according to the Congressional Budget Office. Unfortunately, Grover Norquist and Mitch McConnell, among many others, have promised to oppose any regulation of carbon dioxide. Their reasons for doing so usually consist of hollow statements about economic impacts, and yet the International Energy Agency labeled the regulation inaction as a “false economy”. With such adamant obstruction to carbon policy, buying carbon credits provide an essential opportunity to reduce emissions from those who can afford it. I put myself in a dreary mood imagining how many dollars were spent buying carbon credits, when eventually all citizens will pay much lower for their carbon emissions. With such an expansive and complicated issue, I would say every dollar spent on carbon reductions is a dollar well spent, but programs definitely need to improve for more active global participation.