September 15, 2009
Report Calls Carbon Offsets a Disaster for Averting Climate Change
by Robert Kropp
Friends of the Earth contends that international offsets allow developed countries to go on
polluting, and delay the development of a global low-carbon economy.
Under the Kyoto
Protocol, greenhouse gas (GHG) emissions from developed countries can be offset by investment
in projects in developing countries. The Clean
Development Mechanism (CDM) was created to assist developed countries in the practice, and by
March 2009, over 4,200 offset projects had been accredited by the CDM Executive Board. According to
the United Nations Framework Convention on Climate
Change (UNFCC), the CDM helps "stimulate green investment and (helps) Parties meet their
emission targets in a cost-effective way."
International carbon offsets are financial
instruments that allow companies and governments to mitigate their GHG emissions by funding
renewable energy projects in developing countries.
But will emissions offsets help
contribute to the reductions in global GHG emissions that the Intergovernmental Panel of Climate Change (IPCC) has determined is
necessary to avert the impacts of climate change? According to a recently published report by the
Friends of the Earth, offsets are unlikely to
contribute to a timely response to climate change, and in fact, are "having a disastrous impact on
the prospects for averting catastrophic climate change."
The report, entitled A
Dangerous Distraction: Why Offsets Are a Mistake that the US Cannot Afford to Make, contends
that "offsetting must not be included in US climate legislation or expanded at Copenhagen. New
proposed offsetting schemes must be dropped from negotiations, and existing offsetting mechanisms
need to be scrapped."
The report lists four arguments against offsetting. International
offsetting leads to lower GHG reductions globally, by counting actions in developing countries as
part of efforts in developed countries as well. In the absence of guarantees that offset projects
would not have occurred without such offset finance mechanisms as the World Bank's Carbon Finance Unit
(CFU), which purchases project-based GHG emissions reductions in developing countries on behalf
of contributors from developed countries, GHG emissions are likely to increase, because the
developed country is permitted to continue polluting in return for purchasing offsets.
report argues further that international offsetting weakens incentives in the US and other
developed countries to transition to a low-carbon economy in a timely manner. According to the
report, offsetting provisions in the Waxman-Markey Climate Change bill "could allow domestic
polluters to delay taking strong action up until 2029. Locking in a high-carbon infrastructure will
have severe consequences for the global climate and for our economy."
Finally, the report
contends that offsetting does not help developing countries support low-carbon development. In
fact, according to the report, "Offsetting deepens inequality in per capita carbon consumption
between developed and developing countries."
The report concludes with recommendations
that the US government commit to reducing US-based GHG emissions by 40% below 1990 levels by 2020,
reject proposals for new offset programs such as forest offsets, and help provide developing
countries with funds to support their transition to low-carbon economies, without reliance on
The implications of such recommendations for companies that have used carbon
offsets to mitigate their GHG emissions could be considerable, as it is likely that actually
reducing emissions from operations instead will require significant re-tooling of business
operations. The cost of doing so could prove to be far more expensive than mitigating through the
purchase of carbon offsets.
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