Why Carbon Offsets Are a Failure as a Concept & How Offsets can Lock in Climate Degradation By Laurie Williams 1
Jan 21, 2016
Why Carbon Offsets Are a Failure as a Concept
& How Offsets can Lock in Climate Degradation
By Laurie Williams
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Speaking out as Parents & CitizensSince 2008
Education and Work Experience• Laurie - B.A. Yale University, J.D. UC
Berkeley• Allan – B.A. UC Santa Cruz, J.D. UC
Berkeley• Environmental Enforcement Attorneys
for 25+ years at US EPA Region IX, San Francisco
• Allan has worked extensively on Cap-and-Trade and Offset issues.
Disclaimer – My presentations provide our personal opinions only and
does not reflect US EPA or U.S. government position
This Presentation Provides My Personal Opinions Only
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Cap
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TRADE
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WHAT ARE CARBON OFFSETS?
• An offset is a GHG emission reduction that is (1) not legally required, and
(2) occurs in a non-capped sector.• Example: A Power Plant owner can purchase a
forestry or agricultural offset and use it as a permit to burn additional fossil fuels above the cap.
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WHAT IS ADDITIONALITY?
• An “additional” carbon offset is a GHG reduction that is (1) not legally required, and (2) would not occur but for the incentive of an offset payment.
• Existing & Ongoing - All offset categories • Critical Question – can we segregate those
that would have happened anyway?• Or are we just paying a bit more to pretend.
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The Impact of Offsets on Cap & Trade
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Three Primary Flaws of Offsets• 1. Demand Shift – An activity, such as logging,
is avoided in one location, and counts as an offset, but the same amount of logging still happens somewhere else.
• 2. Uncertainty – It is unknowable whether an activity that counts as an offset would have happened anyway, absent an offset payment
• 3. Perverse Incentives – Once an activity is paid for as an offset, those benefiting from the payments will resist regulation.
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Carbon Offsets - Flaw No. 1 – Demand ShiftForestry Preservation Example
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Bonus for What You Would Have Done Anyway
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A Different Forest is Cut
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Carbon Offsets - Flaw No 2 - Uncertainty vs Additionality
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Group 1 – Perform Activity Anyway, without Offset Payment
Group 2 – Perform Activity Because of Offset Price
Group 3 – Will not Perform Activity even with Offset Price
Uncertainty2012 Prices of European Offsets
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Carbon Offsets - Flaw No 2 - Uncertainty – U.S. GAO agrees it is impossible
to know if any given offset it additional
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Group 1 – Perform Activity Anyway, without Offset Payment
Group 2 – Perform Activity Because of Offset Price
Group 3 – Will not Perform Activity even with Offset Price
Carbon Offsets - Flaw No. 3 -Perverse Incentives
Increased pressure to keep polluting activities legal (and in some cases to increase those activities): Example:Destruction of HFC 23, a refrigerant by-product, in China, was an offset in the European Trading Scheme
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HFC 23 - Refrigerant By-Product Offset
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Carbon Offset is Twice as Profitable As Refrigerant
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Conclusions• Carbon Offsets - failure as a concept.• Fatal Flaws - include (1) demand shifting, (2) uncertainty and (3) perverse incentives• Climate Cap-and-Trade Programs to date allowed
offsets to be a large % of reductions (CA - 85%.)• Non-Capped Sectors – use regulation or independent
incentive programs, not offsets.• Powerful interests support offsets. Without Citizen
engagement, offsets are unstoppable. We support a ballot initiative to ban offsets in California in 2020.
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Contact Information
• Laurie Williams• [email protected] • (510) 390-4224• Volunteer Citizens Climate Lobby
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