Climate offset credit talk off base: what’s missing from the Clean Development Mechanism?

Can the proposed U.S. climate change legislation actually reduce carbon emissions? Not according to utility industry advocates worried about certain provisions in the American Clean Energy and Security Act (a.k.a. Waxman-Markey), which narrowly passed the House of Representatives in June. The concern is that carbon offsets—financial instruments each representing one tonne of carbon dioxide (CO2) which emitting companies can buy from other organizations that have demonstrably reduced CO2 emissions—are in such short supply that CO2 will be prohibitively expensive. Expensive carbon means expensive coal- or gas-fired electricity.

Why are offsets so scarce? To be blunt, because the projects that are eligible to create them in the U.S. are mainly in the agriculture, forestry, and “renewable energy” sectors. The first two sectors are not huge emitters to begin with. And renewables—which means electricity created with wind, solar, micro-hydro, and biomass as well as liquid biofuels for transportation—produce energy in paltry amounts.

This contradicts assumptions by government bodies in the U.S., notably the Environmental Protection Agency (EPA), Energy Information Administration (EIA), and Congressional Budget Office (CBO). All officially assume the above sectors and technologies will  produce enough offsets to keep carbon cheap, and that Waxman-Markey will really lead to major carbon emission reductions.

The international situation is no better.  Though the EPA, EIA, and CBO assume the bulk of offsets for use in the U.S. will originate offshore, nobody knows how or whether an international agreement can emerge in time for Waxman-Markey, which begins in 2012.

And if one does, there’s no guarantee that it will do any better at generating offset credits than Waxman-Markey. In fact, there is every indication that the international market will absolutely not produce offsets in any appreciable quantity. This is because nuclear energy was explicitly taken out of the list of offset-eligible projects under the Clean Development Mechanism, a provision under the Kyoto Protocol that was intended to encourage rich countries to invest in carbon reduction projects in poor countries. At the Kyoto conference in Bonn in 2001, anti-nuclear activists successfully knocked nuclear projects out of the CDM. A collection of NGOs reiterated their opposition to including nuclear in CDM-eligible projects in 2008.

And here we are, with strong pressure to get countries like India and China to join an international effort to reduce carbon emissions, and the so-called environmentalist crowd is still opposing the biggest carbon reduction technology out there. Do the greens want India and China to power their burgeoning economies with coal? Go figure.

1 comment for “Climate offset credit talk off base: what’s missing from the Clean Development Mechanism?

  1. September 6, 2009 at 23:08

    Hi Steve ….

    I have to admit that I really dont understand all this offset business. and I certainly think that it wont work. First, who collects and verifies all the data needed to show that an offset exists? In an era where we cant get overpaid executives to make reasonable decisions about the cost of lunch, how are we going to get all the detailed records recorded and verified so they can be procesed to accurately count offsets? Suppose a company claims that it has reduced CO2 emissions, and proves it, and then next year it allows these emissions to creep up again. Who is going to catch that and why? The opportunities and motives for data manipulation are legion. All this is well beyond our enforcement capabilities, and is really expensive. The “trade” part of “cap and trade” is a non starter. If the nuclear industry jumps into this morass they will sink out of sight for ever. Nuclear power executives will spend all their time in court, fighting trade irregularities noticed by nuclearphobes.

    Another aspect of this that I dont agree with is all the interference in nuclear projects caused by NGOs and other nuclearphobes. Who asked them to represent my interests, and how do we get them unappointed? They have no authority or mandate, yet they get chairs set out for them at the big meetings. Why? We should have learned by now that this game of fighting cases in courts and at semi-authoritative meetings is not a winning strategy for the nuclear industry. A much more stable and predictable process is needed to conduct research, experiment with prototypes, and build the needed generators and grid. The idea of us all arguing in a court room while outside the fires are burning is just not appealing to me. We need a new game, now, and one that will work. What I can imagine here is some kind of simulation that can be run by anyone. If anyone says that wind mills are enough they have to get the simulation to support that claim along with all past claims that have been run and accepted, before they are taken seriously. Changing the game from the court room to the simulation lab would be a real improvement.

    And all this thinking is based on flimsy assumptions. How can we be sure that reducing GHG emissions will cause the earth to cool? Suppose we get into this project and find out that it is causing the earth to heat up? What then? We need to go to the next level, ie white dust in the atmosphere. Are we really going to all die quietly in the heat waiting for greenpeace to approve this desperate approach?

    Big changes are needed – thorium instead of uranium, small reactors instead of huge ones, fission processes that achieve almost total burnup, tracking and destrucion of all nuclear weapons world-wide.

    On top of all this we need a positive picture of the future, a reason to go there, and a proposed energy budget for reaching and sustaining this happy scenario. If that energy budget cannot be met without nuclear power then we should get busy building those reactors, ignoring the strident howls of the nuclearphobes. Every day spent sitting here arguing about whether we need them or not seems to imply that we can get by without them. Can we? What does the simulator forecast?

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