Tuesday, December 19, 2006

Speaking of Global Warming

On Saturday, Congressman Meehan noted that the town meeting was carbon neutral. That is the carbon produced by the event -- including the 50 pounds of CO2 from my car, I hope -- was being offset by a donation to some sort of wind power concern. There was a piece in Sunday's Globe Ideas section that I finally got a chance to read outline the problems of carbon neutrality. I admit that I am intrigued by a market-based solution to reducing emissions, but the article gives us reasons to be skeptical. Here's why:

[T]o Robert Stavins, director of Harvard's environmental economics program, if an offset system actually were reducing emissions there'd be no reason to worry about people buying offsets for their Gulfstreams and Hummers. If it's worth the price of an offset to someone to drive their SUV, and the money they're paying actually buys a reduction elsewhere, that's the definition of economic efficiency. "That's the system working," says Stavins. The point, as he sees it, is to reduce emissions, not to reward individual virtue.

The real problem with offsets, for Stavins and other economists, is that they fail to do this. Even if all of the carbon offset companies held themselves to the highest standards -- and in what is still a completely unregulated industry that is a big if -- economists doubt that offset vendors can assure that a certain amount of money paid by an individual will buy a certain amount of greenhouse gas reduction.

"What you have," says Stavins, "is a comparison to an unobserved and unobservable hypothetical." How does an offset company know that a landowner wasn't going to preserve his forest anyway, perhaps because the timber market was weak? Or that an electric utility hadn't decided to build the wind farm long before it got the offset money? In such cases, the offset money is simply allowing the forest owner or utility to make more money for a decision already arrived at.
I did some research into offsets when I first heard that Al Gore used them to make the promotional tour of An Inconvenient Truth carbon neutral. Some of the companies doing this seemed sketchy, and given that this line of business is brand new and completely unregulated, my impressions may have been correct.