President Barack Obama's announcement that the U.S. will offer an unprecedented pledge to reduce overall greenhouse gas emissions by 17 percent by 2020 at the Copenhagen climate talks in December may seem impressive at first blush. But look closely, and you'll see the "cuts" he has offered are, at least in the short-term, essentially meaningless. The reason is twofold. First: The cuts start from a 2005 baseline, when the baseline the scientific community has put forward is 1990. As a result, these cuts translate to a mere 4 percent below 1990 levels by 2020, when what we need is a 25-40 percent cut in U.S. emissions below 1990 levels by 2020.
Reason number two: Even these measly cuts could all be met by the buying and selling of an invisible, unverifiable, entirely manmade commodity: the carbon offset.
Obama's offer of cuts is based on the cap and trade proposals that have passed the House and are moving through the Senate. Both versions allow polluters to meet their pollution targets by actual cuts or by trading excess pollution with another polluter who has exceeded his targets. Carbon offsets go one step further and allow polluters to carry on polluting so long as they pay a small penance for every ton of CO2 they emit above their cap. Carbon offsets are attractive to polluters because they are, in general, a cheaper price to pay than actual cuts or traded emissions. However, buyer beware: cap and trade proposals now on the table will open up a whole new derivatives market in carbon, a market open to gaming, corruption, and the creation of a new "carbon bubble" that, when it bursts, could take down far more than just our economy. Furthermore, the quality of carbon offsets within the cap and trade program are, according to the U.S. Government Accountability Office, virtually impossible to verify.
Nevertheless, the U.S. cap and trade bills on the table now allow for 2 billion tons of carbon offsets per year -- roughly equivalent to 27 percent of all U.S. greenhouse gas emissions. Initial calculations suggest that allowing for 2 billion tons of offsets per year would mean that polluters in the U.S. could use cheap carbon offsets to avoid curtailing their own significant greenhouse gas emissions until 2026. Yet current climate science tells us we must begin investing directly in new low-carbon energy infrastructure now to avoid runaway climate change.
Carbon offsets aren't being purchased just by those focused cynically on their bottom line. Many people sincerely concerned about climate change have been hoodwinked by carbon offset providers. Case in point: In 2007, Pope Benedict XVI decided that action on climate change was a matter consistent with the Bible's teachings, and declared that the Vatican would become "carbon neutral."
To assist the Vatican in meeting its goals, one Hungarian corporation, KilmaFa, stepped forward with an offer the Vatican couldn't refuse: free carbon offsets. The offsets, in this case, came in the form of a pledge to plant trees in the 37-acre Tiszakeszi Park north of Budapest. KlimaFa even offered to change the name of the park to "Vatican Climate Forest." The Vatican was told that an entire year's worth of its emissions would soon be secured in those trees -- making the Holy See the first carbon-neutral sovereign state.
Or would it be? Well, sadly, probably not. First, the trees have yet to be planted. Second, forests are notoriously non-linear storage banks for carbon: they can go up in flames, blow down in storms, get diseased and die, and even, as temperatures rise, respire more CO2 than they inhale.
But tree-planting scams such as these are relatively benign compared to other larger carbon offsets underway. For example, KlimaFa's parent company, San Francisco-based corporation, Planktos, has em erged as one of the most infamous actors in the stranger-than-fiction emerging field of geoengineering -- the attempt to find a "techno-fix" to our growing global warming problem. One of Planktos's best-known carbon offset schemes was a plan to dump tons of small particles of iron in the ocean near the Galapagos Islands, thereby fertilizing the phytoplankton to grow faster and absorb more CO2. The problem is this: no one knows for sure if the plankton, once they've gorged themselves on iron, would fall to the bottom of the ocean, and a) stay there, thereby storing the CO2 they've inhaled underwater permanently; b) decompose, and bubble to the surface as methane--21 times more potent than CO2 as a global warming agent; or c) be so effective at rapid growth they would create "dead zones" in the ocean. The scheme encountered massive opposition and Planktos filed for bankruptcy.
Bizarre as these schemes may sound, they are not unique. There are even more bizarre schemes: some carbon offsetters sell toxic fly-ash -- turned into cinderblocks -- from coal burners as carbon offsets. Others offer up carbon offsets in the form of fast-growing (and water-sucking, soil-destroying) eucalyptus trees, trees which displace landless farmers trying to grow food crops in Brazil. In China, Stanford professors David Victor and Michael Wara found that a majority of the large hydropower plants and gas burners that went online in recent years have cashed in on the carbon offsets market, making a hefty profit on projects that would have happened anyway.
To help clarify the complicated world of cap and trade, we have joined forces with The Story of Stuff Project and Free Range Studios to produce a short, 10-minute film called The Story of Cap and Trade, which attempts to simplify the flaws in this approach and suggests better ways of moving forward.
The bottom line is this: climate change is serious, and we can't afford to hand the fate of the planet over to the very polluters, banks, and traders that have gotten us into this mess. If we don't wake up soon to the flaws of cap and trade and work on real solutions now, all species -- our own included -- may go the way of the dodo.
Daphne Wysham is a Fellow at the Institute for Policy Studies in Washington, DC