Saturday, April 21, 2007

Voluntary Carbon Offsets - still a long way to go | Leonardo ENERGY

Stories mushroom of individuals and organisations offsetting their carbon emissions by purchasing credits. With increasing demand for carbon offsets, several dozens of companies now offer such credits [1]. Prices vary, but typically you can go carbon-free for a price of 5 to 10 $/tonne CO2. A typical European with a carbon footprint of 10 tonne could go carbon-neutral for less than 100$.

Proponents of these schemes argue that offsets allow addressing climate change at the lowest cost to society. In addition, they serve as an education tool, making people aware of how much pollution they cause.

Opponents are worried about environmental integrity of the schemes, and prefer offsets being used as a last resort, after other options have been exhausted. A proposal for a Gold Standard on offsets by the Carbon Trusts comments in the same vein [2].

A price of 5-10$/tCO2 is well under the price of the EU's Emission Trading Scheme [3], where currently allowances for 2008-2009 are traded at 18 euro/tonne. According to IEA, plenty of carbon reduction opportunities are available at a price below 25 $/tonne.

It appears that personal/organisational carbon offsets have a bright future, but there are lots of conditions to be fulfilled:

  1. First exhaust other options for reducing direct & indirect emissions [2]
  2. Schemes need to be real, permanent, verifiable and truly additional, not planting 'a sapling for $2, not water it, not fertilize it, and figure out how much carbon dioxide it would absorb over 50 years' [1]
  3. The cost of the offset, minus the cost of running the scheme, needs to be invested into a project which produces an equivalent amount of carbon credits over its lifetime as the offsets being granted for its investment amount - a trivial proposition, but at present conspicuous in its absence for most current schemes.

A voluntary carbon market could be a great instrument to deliver low-cost carbon reductions, but government, or consumer organisations need to get involved to set the rules and provide a quality label for premium carbon offset providers.

Links

[1] San Francisco Chronicle, April 15: Paying to absolve the sin of emissions

[2] Carbon Offsets: Greening or Greenwash?

[3] The EU Emission Trading Scheme - a play in 4 acts

[4] Energy Technology Perspectives - Towards a Sustainable Energy Future

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