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Companies are buying large numbers of carbon offsets that don’t cut emissions

242 points by lxm 4y ago

JohnClark1337 4y ago
j_walter 4y ago
This has been known in the industry for years. Everyone is pushing companies to be carbon neutral, but that doesn't really mean money is going where it should...it just looks good on paper. Unless companies have moral people in their upper management and are doing their due diligence when selecting offsets then the money is just going to other corporate profits and not making any impact at all. I know this for a fact since my company is carbon neutral and I also oversee the review process for not just carbon offsets but also RECs. You can thank the government for little oversight in the carbon offset process that they developed.
- WastingMyTime89 4y ago
  Yes but companies who overly rely on carbon offsets are shooting themselves in the foot. With emission targets gradually lowering and regulations becoming more and more ambitious, offsets will become more expensive. Not investing into meaningfully reducing emissions now is a glaring lack of forward planning and due diligence. I fully expect some companies to tank in the next twenty years because of their current failure to adapt.
  - michaelt 4y ago
    > With emission targets gradually lowering and regulations becoming more and more ambitious, offsets will become more expensive. Oh legitimate carbon offsets will be in short supply, which you'd expect to raise prices. No doubt about that. But fraudulent carbon offsets? Those can be produced in whatever quantities buyers are willing to pay for.
    - schlauerfox 4y ago
      Good luck with that: https://www.theclimatewarehouse.org/ https://www.theclimatewarehouse.org/
- moffkalast 4y ago
  > are doing their due diligence Well they actually are doing due diligence, the problem is they have a different objective: find the most carbon credits to buy for the least money. It's not like they actually care about being neutral, if they did they'd cut emissions instead of pushing it onto others. It's all PR and complying with government regulations. Unfortunately the legit sources aren't gonna be a good choice for that goal.
  - fasthands9 4y ago
    Agreed. We just need to tax carbon or the externality of emissions more. It doesn't make sense for companies to figure out climate/energy science out on their own anyways. Its completely silly to expect that every mid-size company figure this out on their own and voluntary pay more than their competitors and lose any pricing edge.
    - galangalalgol 4y ago
      The money equivalency is the problem, not sure taxing it will work either, only because will set the tax too low, or it will get raised too high and be used to do something unrelated. It doesn't matter if they pay enough to sequester equivalent carbon, it matters if it actually gets done. What if we tax, but in the form of stable or usable carbon? If you emit X tons of co2 then you have to bring Y tons of coal, diesel, crude, diamonds, graphite, preserved wood or whatever, to government sequestration sites, or pay someone else to do so. Laws to prevent the government from using the stuff, and you'd drive up the price of fossil fuels simultaneously to account for their externality as well.
      - liamconnell 4y ago
        > government sequestration sites Well that would drive up demand for fossil fuels and profits for extraction companies, leading to more extraction. Is this a real idea (proposed policy in a country) or just something you wrote down?
      - delroth 4y ago
        > or it will get raised too high and be used to do something unrelated That matters very little. Carbon taxation is a Pigovian tax, and just making emitting CO2 more expensive creates strong incentives to stop emitting CO2. It also makes "green" alternatives comparatively cheaper. In fact, many proponents of carbon taxation support equal redistribution of the tax money to everyone (e.g. as tax credits). Taxpayers polluting less than average would see their tax burden decrease, while those polluting more than average would be paying more and thus be incentivized to change their behavior. (Of course, it's not that easy in the real world, some behavior can be extremely hard to change without help/subventions/large investments. But these helps don't have to be tied to carbon taxation.)
- celtain 4y ago
  >You can thank the government for little oversight in the carbon offset process that they developed. Carbon offsetting is a government program? I thought this was pretty much all the work of private companies, with buyers doing so voluntarily and providers self-regulating (hence the problems). Is that not the case?
- halffaday 4y ago
  This can only be said bluntly: carbon trade schemes are and always have been about creating trillion-dollar money laundering opportunities. The problem is unspecified. Results are unmeasurable. The usual suspects are conspicuously present.
  - j_walter 4y ago
    ...and it's all sanctioned by the government because they make boatloads of money in the process. All in the name of the greater good.
  - imtringued 4y ago
    In theory a carbon trade scheme is more efficient, in practice governments don't shrink the quantity of emissions certificates fast enough, they give away free certificates to heavy polluters like coal power instead of running an auction.
not2b 4y ago
John Oliver did a great piece on this: https://www.youtube.com/watch?v=6p8zAbFKpW0 https://www.youtube.com/watch?v=6p8zAbFKpW0
- sschueller 4y ago
  It's like the WSJ watches Oliver then spends a week or two to write an article on the exact same issue. From what I recall this is the second time now.
neonate 4y ago
https://archive.ph/InZpI https://archive.ph/InZpI
Cyberdog 4y ago
I'm selling carbon credits too, by the way. If you want to be absolved of your sins of pollution, just send me money and I'll email you an official Cyberdog Planetary Salvation Certification. It's very easy. I'll use all funds to plant trees or whatever, minus obligatory administration fees (don't worry about it). Just ping me with however many credits you need and I'll send you my CashApp tag or Dogecoin wallet address.
- vorpalhex 4y ago
  Can you throw in a Lordship of an EU country or name a star after me?
- HideousKojima 4y ago
  Funnily enough, someone did more or less what you did a few years back (but as actual fraud). https://www.washingtonpost.com/local/crime/renewable-fuels-fraud-cases-expose-weakness-in-epa-program/2012/04/14/gIQAtGKbHT_story.html https://www.washingtonpost.com/local/crime/renewable-fuels-f... A guy was literally making up RINs (renewable identification numbers) in a spreadsheet and selling them to companies as renewable energy credits. The only reason he got caught is because he was buying a bunch of sports cars and leaving them parked all over his neighborhood, leading his neighbors to assume he was a drug dealer.
- loeg 4y ago
  > I'll use all funds to plant trees or whatever, It's even dumber than that. You just have to promise not to chop down some existing trees that you would chop down in the absence of payments. Nevermind if you really would chop them down or not. Or if you've already sold the same promise on the same grove of trees to another buyer.
- UmbertoNoEco 4y ago
WalterBright 4y ago
The right way to reduce CO2 emissions is to simply tax the carbon content of fuels as they are sold from the refinery. Increase the tax until the usage goes down. Simple, effective, efficient, and boring. And hard to virtue signal one's way out of.
- criddell 4y ago
  How do you sell that to voters?
  - hedora 4y ago
    Be honest about how said voters' houses are going to be worthless when Phoenix runs out of water, California burns down, and Miami/NYC/New Orleans are under water. Also, be honest about how we're rapidly barreling toward the end of economic growth because the weather keeps destroying industrial and agricultural production.
    - baggy_trough 4y ago
      The voters will cast a judgement about whether that is hysterical nonsense or not.
    - nathanaldensr 4y ago
      Sorry, but most people don't believe that or you. Try reading sources outside your bubble.
      - it_citizen 4y ago
        Reputable sources explaining that climate change won't destroy trillions of dollar of assets and GDP? Seems like I am in that bubble too. Could you lay them down please?
        aydyn 4y ago
        Reputable sources say that "California will burn down" and "NYC will be under water"? Extraordinary claims require extraordinary proof. Unless OP is just using hyperbole to make a point, in which case maybe they shouldn't.
anigbrowl 4y ago
Wait, financialization isn't the solution to every problem? Shocker
- DocTomoe 4y ago
  It would be, if people were actually willing to put their money where their mouth is and invest some of their own cash to take certificates off the market. Apparently, people are unwilling to do so in meaningful numbers. Ergo: They do not see this as an actual problem, which means problem is solved. We just need to accept that.
  - anigbrowl 4y ago
    But carbon credits were never marketed as a way for people to retire carbon debt - they were presented as a way to implement the 'polluter pays' principle using the 'proven' mechanisms of the market. I do think markets are a very useful social technology for allocating resources. But they can also be abused for distributing liability and they're slow. There's a reason most polities abandon the market model for urgent tasks like firefighting.
    - DocTomoe 4y ago
      In all fairness, that sounds a lot like "The citizenry is too stupid to get it, so now we force our will upon them." or, and that's even less charitable, "the section of the citizenry that wants carbon emission deceleration does want others to pay for it." At some point, I think we need to decide if we want to continue the world trying to be democratic, or if we want more-or-less benevolent, eco-dictatorships.
- amelius 4y ago
  What if we didn't use plain old finance to solve the problem, but used smart contracts that can be traced down to the originator of the problem, then fine the entire responsible chain if there is a violation?
  - 4y ago
asiachick 4y ago
Of course! There are toxic emissions laws that "prevent" companies from polluting too much. Or rather they limit the amount each company can emit. To get around that limit they just subcontracted to tons of smaller companies, each one gets it's quota of emissions.
vishnugupta 4y ago
This is exactly what happens when everything is turned into money. More so when the fiat money can be borrowed from the future, you are essentially kicking the can down the road. What next? Carbon emission futures? A thriving market where the futures are traded? All the while the emissions continue abated and even increase.
- lelandfe 4y ago
  https://www.theice.com/market-data/indices/commodity-indices/carbon-futures https://www.theice.com/market-data/indices/commodity-indices... https://en.wikipedia.org/wiki/European_Union_Emissions_Trading_System https://en.wikipedia.org/wiki/European_Union_Emissions_Tradi... :D
  - ant6n 4y ago
    But can I buy these as an etf (or etn or whatever)
    - imtringued 4y ago
      Honestly, hoarding carbon certificates and selling them for a big profit is more effective at curbing CO2 emissions than any carbon offset program.
      - Schroedingersat 4y ago
        Only if those credits come from an emission reducing activity and not, say, burning old growth tasmanian forest for energy.
- short_sells_poo 4y ago
  Carbon emission futures can be traded in many developed markets nowadays...
clairity 4y ago
carbon (i.e., CO₂) isn't the problem anyway, so let them waste their money on virtue signaling. pollution is the problem. let's focus on coal plants first, where getting rid of the top 100 polluters would already palpably improve air (and water) quality that would in turn measurably reduce death and disease.
- loeg 4y ago
  Carbon is definitely a problem.
kyleblarson 4y ago
File this one under "completely unsurprising".
jonas21 4y ago
Overall, I struggle to see how this is a bad thing. Take the example at the start of the article: 1. Two decades ago, the UN set up a program for selling voluntary carbon credits under the assumption that renewables would not be price-competitive for a very long time, if ever, and would therefore need a subsidy. 2. Companies started buying those credits, even though they didn't have to, just to look good to consumers. As a result, the subsidy didn't cost taxpayers a dime. 3. Renewable technology developed faster than expected (in part due to the subsidy). Now renewables are competitive with fossil fuels and projects would be built even if companies didn't buy the credits. People should be absolutely thrilled by this outcome.
- rglover 4y ago
  > Now renewables are competitive with fossil fuels This isn't true. They might be competitive in a shallow sense (price per kWh) but in terms of benefit (specifically, reliability and output capacity), they're barely a sniff—hence the nightmare in Europe right now. That doesn't even factor in the fossil fuels and emissions that need to be expended to create those renewables (which are greater than the individual renewable will ever offset in its lifetime).
  - thinkcontext 4y ago
    > hence the nightmare in Europe right now. How would being more reliant on fossil fuels help them now? The problem is they are struggling to import enough. If they had more fossil fuel plants and less wind and solar they'd have to import even more fossil fuels. > That doesn't even factor in the fossil fuels and emissions that need to be expended to create those renewables (which are greater than the individual renewable will ever offset in its lifetime). False. There have been dozens of lifecycle analysis studies they find a more than 10x advantage of solar and wind over gas per kwh. https://en.wikipedia.org/wiki/Life-cycle_greenhouse_gas_emissions_of_energy_sources https://en.wikipedia.org/wiki/Life-cycle_greenhouse_gas_emis...
    - rglover 4y ago
      > How would being more reliant on fossil fuels help them now? The problem is they are struggling to import enough. Right. That problem exists because they drew back their own fossil fuel production to switch to renewables which are not providing the commensurate energy required, forcing them to go to outside providers. > False. There have been dozens of lifecycle analysis studies they find a more than 10x advantage of solar and wind over gas per kwh. Now do the factories to produce the components in the renewables, the trucks to ship the components, the equipment to install the components, the trucks to get the workers to maintain the components, etc. Batteries? You need massive trucks that can only run on diesel to mine the metals necessary to make them work. You're releasing insane amounts of emissions and wasting tons of energy just to say you're not on paper. It's absolute lunacy.
newaccount74 4y ago
But isn't making renewable energy more profitable still a good thing? It still incentivises building wind farms quicker, and the more wind farms we have the less dependent we are on gas.
black_13 4y ago
hedora 4y ago
Are there any carbon offset programs that actually do reduce atmospheric carbon? Is there some sort of reputable certification board in this space? John Oliver had a great piece looking at the industry (linked elsewhere here already), but didn't provide much actionable advice. (Other than to never give The Nature Conservancy any money under any circumstances.)
outside1234 4y ago
We have to stop considering these offsets as having any virtue.
Tarsul 4y ago
we should be real here: The idea of carbon credits/certificats is better than doing nothing as generelly these steps should help (better to put money where it could be worthwhile than where we know it ain't). Where it doesn't help, we have journalists and other organisations that show this (like in this example), so that the bad apples can be separated from the good apples. What really counts is the following: Having the right aim, listening to concerns and changing course where necessary. What doesn't help is unnecessary cynism (and drive-by posting). And of course we can gain the most if our politicians are using adequate incentives. As for the certificates from Gold standard: They also have recycling projects, reforestation (yeah, i know that the discussion about this is ongoing as well!) and some programs where poor people are helped with appliances that are less environmentally damaging. Everyone can invest in whatever project one wants. We can argue about which of these programs help the most (especially since we don't really differentiate between carbon reduction, carbon sinks and carbon capture), BUT what counts is that we, as people of this planet, are trying and improving.
- pas 4y ago
  > what counts both counts. intent and efficiency (results). the big problem is that there is no agency that would fine/sue the shit out of these scams.
jms703 4y ago
Where does the money go?
crackercrews 4y ago
> These days, the cost of generating electricity from such sources (wind/solar) is roughly on par with that of fossil fuels. I've never seen a cost analysis that takes into account the unreliability of sources that rely on sun or wind. I don't know exactly how a proper model would account for these factors, but surely ignoring the unreliability isn't the right answer.
- Ensorceled 4y ago
  This is only an issue once we stop having electricity sources that can be turned on reasonably quickly when wind or sun is under producing (such as natural gas and, to some extent, hydro electric). Since wind/solar is still a small part of the overall contribution, there is no need to model unreliability. Ideally this would BECOME an issue in the future.
  - crackercrews 4y ago
    Ask the western US if it is an issue right now. If you don't hear back it's because their power is out.
    - Ensorceled 4y ago
      I didn't realize California etc. had hit the level of dependency on solar/wind where this could be a factor. Good on them.
      - crackercrews 4y ago
        The people who lost power and couldn't cool themselves down in 100 degree weather might not agree with your congratulations from afar. They might also not like that their energy costs are dramatically higher than even in neighboring states. But if it makes you feel better, I guess that makes it all good, right?
        Ensorceled 4y ago
rizoma_dev 4y ago
At some point knowingly engaging in this type of behavior should be considered a crime against humanity
layman51 4y ago
This reminds me that I had seen some other article about how sometimes, projects to plant a bunch of new trees are not successful because of maintenance or upkeep costs that may not have been thought out.
Tyndale 4y ago
tppiotrowski 4y ago
> Transactions like this undercut the basic concept behind carbon offsets—that they should fund green projects that wouldn’t be possible without the additional cash they bring. Is this really the basic concept? I thought it was meant to deliver carbon cutting at the cheapest cost. Redesigning a Delta airlines jet to be electric or make the engine more fuel efficient is $$$$. Now, there is a village in India that uses a coal power plant. It's cheaper for Delta to build a solar power plant in India, shutdown the coal plant, and claim all the carbon output they've reduced in India then to try and build a new airplane. Capital is therefore efficiently allocated to whatever carbon cutting project is the cheapest, therefore maximizing carbon reduction per dollar spent.
- opportune 4y ago
  Since delta is paying to convert a coal plant to a solar plant, carbon offsets create perverse incentives like allowing you to “sell” or hold hostage something you were going to do anyway, keep inefficient things around so you can sell offsets lager, or start off doing something inefficient or bad so someone can pay you to stop. For example, as a fisherman it might be cheaper for me to buy some old, shitty, super-polluting boats, run them around for a bit generating huge amounts of emissions, and then go shopping for offsets. With the offsets I buy nicer boats that don’t pollute as much. But without the offsets I might have either not been fishing at all or gone straight for the nicer boats. Basically, carbon offsets in theory allocate carbon savings where they are most effective financially, but in practice create structural inefficiencies (incentivized to start polluting to fix it). Also, they are prone to double counting. If I open a wind farm partially funded by carbon offsets, if I claim that the farm is removing as much CO2 as it actually saves, I’m double counting along with whoever paid for the offsets to be “carbon neutral” when there is indeed still a net amount of carbon being put in the atmosphere
  - crackercrews 4y ago
    Like the Great Hanoi Rat Massacre. [1] You get what you pay for! 1: https://www.atlasobscura.com/articles/hanoi-rat-massacre-1902 https://www.atlasobscura.com/articles/hanoi-rat-massacre-190...
liamconnell 4y ago
I go back and forth on the push for carbon neutrality for large companies (as opposed to some form of carbon tax). I'll give a few examples that I've seen first-hand in my work as a consultant. 1. A large state-owned African agricultural company is using satellite and soil-sample data to measure the carbon sequestration potential of agricultural land if certain farming techniques are used (no-till, etc). They use satellite and soil-sample data feeding into a biological model implemented in fortran (from some academic paper that may or may not be replicated) for the estimation. The plan is to go to farmers and ask them to switch the technique. The company would sell carbon credits, give the participating farmers a cut and keep the rest. This has great potential! but the large-scale implementation is very difficult manage. The company would at least need to randomly check in on participating farmers. It should also take soil samples over time to make sure the technique is working. Carbon credit sellers should be auditable, but the government relations and size of the company might make that difficult to do rigorously. 2. An analytics tool hopes to help large companies identify the parts of their supply chain that can reduce the overall carbon emissions of a product with the lowest price increase to the end-consumer. Think about BMW sourcing steel from China for example. If this helps companies actively manage their supply chain in order to lower emissions, then suppliers will adopt to low-carbon techniques over time. The problem is that it requires suppliers to disclose their emissions accurately. Many supply chains in carbon-intensive industries are global and fragmented. If a bad-actor supplier on the other side of the world lied and got caught, they could just change their name and carry on. 3. Global supply chains also present issues with carbon taxes at the drilling/mining site. You can't force foreign countries to tax this (and if you did they would be incentivized to cheat), and you can't force foreign companies to accurately disclose energy use. A domestic energy tax would make local manufacturing uncompetitive, which is something most countries are not willing to sacrifice. The debate between carbon neutrality vs carbon/extraction taxes is the choice between inventing an entire new bureaucracy of enforcement (carbon audits, carbon disclosure, etc) or the impossible task of rallying and enforcing global action (every country imposes the same tax, no exceptions). As an engineer, I understand the seeming beauty and efficiency of the second option, but I think the first is ultimately going to be our best bet.
- newaccount74 4y ago
  > A domestic energy tax would make local manufacturing uncompetitive That's what tariffs are for? Products from countries that don't tax carbon could just get a carbon tariff added on import.
2OEH8eoCRo0 4y ago
Tax fuel sources by amount of carbon dioxide that they release. It will increase the cost of electricity generated from those sources and discourage their use. Use the tax money to fund green energy research, green energy production, carbon capture, etc. Don't fight the market, act on the source and the market will adjust.
david422 4y ago
I installed solar panels on my roof and one of things you can do is then sell your home carbon credit on the market to some buyer. Which basically means that while you are still offsetting carbon by generating solar on your roof - since you've sold your share - that morally you are still responsible for your carbon footprint. I opted not to sell mine. It wasn't worth a ton of money and part of the reason I got solar anyways is to reduce the carbon footprint. It also seemed crazy to me that this was even an option that existed.
- aero-glide2 4y ago
  Even if you sell, you are still reducing the carbon footprint by 50% though.
kisamoto 4y ago
If you're a small business struggling to understand carbon offsets and removal I'll be happy to help. I run https://carbonremoved.com/ https://carbonremoved.com/ for individuals and we're beginning to work with businesses too. Email me at "ewan@" the domain above if you'd like to take real action towards net zero.
BryLuc 4y ago
tdaltonc 4y ago
If you're looking for an alternative to the (very problematic) carbon offset (CO), check out Renewable Energy Credits (RECs). COs are designed to incentives reducing CO2 in the atmosphere, but verification and traceability problems make it hard for them to achieve that goal. RECs are designed to incentivize the construction of renewable energy based power plants. They're easier to monitor because verification is handled by grid operators checking the number on the meter. We (Jasmine (YC-S22)) (https://www.jasmine.energy/ https://www.jasmine.energy/) are building a RECs exchange. Governments handle REC verification. We handle liquidity, efficiency, and traceability.
- ZeroGravitas 4y ago
  Though ironically, this is exactly what is being attacked by the article. They're arguing that giving money to renewables producers should only be done, if the renewable wouldn't otherwise be a viable business, and that some credits are from older renewable energy projects that got grandfathered in, before the offset organisations decided that they could spend their money more effectively elsewhere since the renewables would get built anyway.
  - tdaltonc 4y ago
    The UN's Clean Development Mechanism (CDM) is very different from Renewable Energy Certificate programs. CDM project, as a type off Carbon Offset, are supposed to be targeted have "additionality," meaning, as you said, that the project wouldn't exist if not for the subsidy. RECs are supposed to be universal because they're about tracking the production/consumption of all renewable energy on the grid. That universality makes fraud much harder.
    - ZeroGravitas 4y ago
      Unbundled RECs have the exact same "additionality" issue, and I'm assuming if you're creating a market for all renewable energy on the grid, you are talking about unbundled RECs. This quote on your site appears to confirm that: > Most generators don't know they are accruing valuable credits they can sell. If you are a generator selling these credits you could off-set the cost of your system.
deleted 4y ago
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otabdeveloper4 4y ago
No kidding? Wow, who could have predicted!
rmolin88 4y ago
John Oliver recently did an episode on this: https://youtu.be/6p8zAbFKpW0 https://youtu.be/6p8zAbFKpW0
mltvc 4y ago
There are a lot of valid criticisms to be made about the voluntary carbon market but at least it's something that is being done right now. At Sylvera, a carbon offset rating agency, we create very thorough analyses of all projects issuing offsets. Based on scores for carbon score, additionality and permanence we create ratings that buyers can trust to avoid being scammed. This transparency is fundamental to the functioning of this market.
tech_tuna 4y ago
Carbon offsets are like recycling plastic. The better alternative to recycling plastic is not producing and buying stuff made out of plastic in the first place.
xphos 4y ago
Two words carbon tax. You cannot fake escape it or
deleted 4y ago
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refurb 4y ago
Reminds me of buying indulgences from the church to absolve yourself from your sins.

242 points by lxm 4y ago

This has been known in the industry for years. Everyone is pushing companies to be carbon neutral, but that doesn't really mean money is going where it should...it just looks good on paper. Unless companies have moral people in their upper management and are doing their due diligence when selecting offsets then the money is just going to other corporate profits and not making any impact at all. I know this for a fact since my company is carbon neutral and I also oversee the review process for not just carbon offsets but also RECs. You can thank the government for little oversight in the carbon offset process that they developed.

WastingMyTime89 4y ago
Yes but companies who overly rely on carbon offsets are shooting themselves in the foot. With emission targets gradually lowering and regulations becoming more and more ambitious, offsets will become more expensive. Not investing into meaningfully reducing emissions now is a glaring lack of forward planning and due diligence. I fully expect some companies to tank in the next twenty years because of their current failure to adapt.
- michaelt 4y ago
  > With emission targets gradually lowering and regulations becoming more and more ambitious, offsets will become more expensive. Oh legitimate carbon offsets will be in short supply, which you'd expect to raise prices. No doubt about that. But fraudulent carbon offsets? Those can be produced in whatever quantities buyers are willing to pay for.
  - schlauerfox 4y ago
    Good luck with that: https://www.theclimatewarehouse.org/ https://www.theclimatewarehouse.org/
moffkalast 4y ago
> are doing their due diligence Well they actually are doing due diligence, the problem is they have a different objective: find the most carbon credits to buy for the least money. It's not like they actually care about being neutral, if they did they'd cut emissions instead of pushing it onto others. It's all PR and complying with government regulations. Unfortunately the legit sources aren't gonna be a good choice for that goal.
- fasthands9 4y ago
  Agreed. We just need to tax carbon or the externality of emissions more. It doesn't make sense for companies to figure out climate/energy science out on their own anyways. Its completely silly to expect that every mid-size company figure this out on their own and voluntary pay more than their competitors and lose any pricing edge.
  - galangalalgol 4y ago
    The money equivalency is the problem, not sure taxing it will work either, only because will set the tax too low, or it will get raised too high and be used to do something unrelated. It doesn't matter if they pay enough to sequester equivalent carbon, it matters if it actually gets done. What if we tax, but in the form of stable or usable carbon? If you emit X tons of co2 then you have to bring Y tons of coal, diesel, crude, diamonds, graphite, preserved wood or whatever, to government sequestration sites, or pay someone else to do so. Laws to prevent the government from using the stuff, and you'd drive up the price of fossil fuels simultaneously to account for their externality as well.
    - liamconnell 4y ago
      > government sequestration sites Well that would drive up demand for fossil fuels and profits for extraction companies, leading to more extraction. Is this a real idea (proposed policy in a country) or just something you wrote down?
    - delroth 4y ago
      > or it will get raised too high and be used to do something unrelated That matters very little. Carbon taxation is a Pigovian tax, and just making emitting CO2 more expensive creates strong incentives to stop emitting CO2. It also makes "green" alternatives comparatively cheaper. In fact, many proponents of carbon taxation support equal redistribution of the tax money to everyone (e.g. as tax credits). Taxpayers polluting less than average would see their tax burden decrease, while those polluting more than average would be paying more and thus be incentivized to change their behavior. (Of course, it's not that easy in the real world, some behavior can be extremely hard to change without help/subventions/large investments. But these helps don't have to be tied to carbon taxation.)
celtain 4y ago
>You can thank the government for little oversight in the carbon offset process that they developed. Carbon offsetting is a government program? I thought this was pretty much all the work of private companies, with buyers doing so voluntarily and providers self-regulating (hence the problems). Is that not the case?
halffaday 4y ago
This can only be said bluntly: carbon trade schemes are and always have been about creating trillion-dollar money laundering opportunities. The problem is unspecified. Results are unmeasurable. The usual suspects are conspicuously present.
- j_walter 4y ago
  ...and it's all sanctioned by the government because they make boatloads of money in the process. All in the name of the greater good.
- imtringued 4y ago
  In theory a carbon trade scheme is more efficient, in practice governments don't shrink the quantity of emissions certificates fast enough, they give away free certificates to heavy polluters like coal power instead of running an auction.

not2b 4y ago

John Oliver did a great piece on this: https://www.youtube.com/watch?v=6p8zAbFKpW0 https://www.youtube.com/watch?v=6p8zAbFKpW0

sschueller 4y ago
It's like the WSJ watches Oliver then spends a week or two to write an article on the exact same issue. From what I recall this is the second time now.

neonate 4y ago

https://archive.ph/InZpI https://archive.ph/InZpI

Cyberdog 4y ago

I'm selling carbon credits too, by the way. If you want to be absolved of your sins of pollution, just send me money and I'll email you an official Cyberdog Planetary Salvation Certification. It's very easy. I'll use all funds to plant trees or whatever, minus obligatory administration fees (don't worry about it). Just ping me with however many credits you need and I'll send you my CashApp tag or Dogecoin wallet address.

vorpalhex 4y ago
Can you throw in a Lordship of an EU country or name a star after me?
HideousKojima 4y ago
Funnily enough, someone did more or less what you did a few years back (but as actual fraud). https://www.washingtonpost.com/local/crime/renewable-fuels-fraud-cases-expose-weakness-in-epa-program/2012/04/14/gIQAtGKbHT_story.html https://www.washingtonpost.com/local/crime/renewable-fuels-f... A guy was literally making up RINs (renewable identification numbers) in a spreadsheet and selling them to companies as renewable energy credits. The only reason he got caught is because he was buying a bunch of sports cars and leaving them parked all over his neighborhood, leading his neighbors to assume he was a drug dealer.
loeg 4y ago
> I'll use all funds to plant trees or whatever, It's even dumber than that. You just have to promise not to chop down some existing trees that you would chop down in the absence of payments. Nevermind if you really would chop them down or not. Or if you've already sold the same promise on the same grove of trees to another buyer.
UmbertoNoEco 4y ago

WalterBright 4y ago

The right way to reduce CO2 emissions is to simply tax the carbon content of fuels as they are sold from the refinery. Increase the tax until the usage goes down. Simple, effective, efficient, and boring. And hard to virtue signal one's way out of.

criddell 4y ago
How do you sell that to voters?
- hedora 4y ago
  Be honest about how said voters' houses are going to be worthless when Phoenix runs out of water, California burns down, and Miami/NYC/New Orleans are under water. Also, be honest about how we're rapidly barreling toward the end of economic growth because the weather keeps destroying industrial and agricultural production.
  - baggy_trough 4y ago
    The voters will cast a judgement about whether that is hysterical nonsense or not.
  - nathanaldensr 4y ago
    Sorry, but most people don't believe that or you. Try reading sources outside your bubble.
    - it_citizen 4y ago
      Reputable sources explaining that climate change won't destroy trillions of dollar of assets and GDP? Seems like I am in that bubble too. Could you lay them down please?
      - aydyn 4y ago
        Reputable sources say that "California will burn down" and "NYC will be under water"? Extraordinary claims require extraordinary proof. Unless OP is just using hyperbole to make a point, in which case maybe they shouldn't.

anigbrowl 4y ago

Wait, financialization isn't the solution to every problem? Shocker

DocTomoe 4y ago
It would be, if people were actually willing to put their money where their mouth is and invest some of their own cash to take certificates off the market. Apparently, people are unwilling to do so in meaningful numbers. Ergo: They do not see this as an actual problem, which means problem is solved. We just need to accept that.
- anigbrowl 4y ago
  But carbon credits were never marketed as a way for people to retire carbon debt - they were presented as a way to implement the 'polluter pays' principle using the 'proven' mechanisms of the market. I do think markets are a very useful social technology for allocating resources. But they can also be abused for distributing liability and they're slow. There's a reason most polities abandon the market model for urgent tasks like firefighting.
  - DocTomoe 4y ago
    In all fairness, that sounds a lot like "The citizenry is too stupid to get it, so now we force our will upon them." or, and that's even less charitable, "the section of the citizenry that wants carbon emission deceleration does want others to pay for it." At some point, I think we need to decide if we want to continue the world trying to be democratic, or if we want more-or-less benevolent, eco-dictatorships.
amelius 4y ago
What if we didn't use plain old finance to solve the problem, but used smart contracts that can be traced down to the originator of the problem, then fine the entire responsible chain if there is a violation?
- 4y ago

asiachick 4y ago

Of course! There are toxic emissions laws that "prevent" companies from polluting too much. Or rather they limit the amount each company can emit. To get around that limit they just subcontracted to tons of smaller companies, each one gets it's quota of emissions.

vishnugupta 4y ago

This is exactly what happens when everything is turned into money. More so when the fiat money can be borrowed from the future, you are essentially kicking the can down the road. What next? Carbon emission futures? A thriving market where the futures are traded? All the while the emissions continue abated and even increase.

lelandfe 4y ago
https://www.theice.com/market-data/indices/commodity-indices/carbon-futures https://www.theice.com/market-data/indices/commodity-indices... https://en.wikipedia.org/wiki/European_Union_Emissions_Trading_System https://en.wikipedia.org/wiki/European_Union_Emissions_Tradi... :D
- ant6n 4y ago
  But can I buy these as an etf (or etn or whatever)
  - imtringued 4y ago
    Honestly, hoarding carbon certificates and selling them for a big profit is more effective at curbing CO2 emissions than any carbon offset program.
    - Schroedingersat 4y ago
      Only if those credits come from an emission reducing activity and not, say, burning old growth tasmanian forest for energy.
short_sells_poo 4y ago
Carbon emission futures can be traded in many developed markets nowadays...

clairity 4y ago

carbon (i.e., CO₂) isn't the problem anyway, so let them waste their money on virtue signaling. pollution is the problem. let's focus on coal plants first, where getting rid of the top 100 polluters would already palpably improve air (and water) quality that would in turn measurably reduce death and disease.

loeg 4y ago
Carbon is definitely a problem.

kyleblarson 4y ago

File this one under "completely unsurprising".

jonas21 4y ago

Overall, I struggle to see how this is a bad thing. Take the example at the start of the article: 1. Two decades ago, the UN set up a program for selling voluntary carbon credits under the assumption that renewables would not be price-competitive for a very long time, if ever, and would therefore need a subsidy. 2. Companies started buying those credits, even though they didn't have to, just to look good to consumers. As a result, the subsidy didn't cost taxpayers a dime. 3. Renewable technology developed faster than expected (in part due to the subsidy). Now renewables are competitive with fossil fuels and projects would be built even if companies didn't buy the credits. People should be absolutely thrilled by this outcome.

rglover 4y ago
> Now renewables are competitive with fossil fuels This isn't true. They might be competitive in a shallow sense (price per kWh) but in terms of benefit (specifically, reliability and output capacity), they're barely a sniff—hence the nightmare in Europe right now. That doesn't even factor in the fossil fuels and emissions that need to be expended to create those renewables (which are greater than the individual renewable will ever offset in its lifetime).
- thinkcontext 4y ago
  > hence the nightmare in Europe right now. How would being more reliant on fossil fuels help them now? The problem is they are struggling to import enough. If they had more fossil fuel plants and less wind and solar they'd have to import even more fossil fuels. > That doesn't even factor in the fossil fuels and emissions that need to be expended to create those renewables (which are greater than the individual renewable will ever offset in its lifetime). False. There have been dozens of lifecycle analysis studies they find a more than 10x advantage of solar and wind over gas per kwh. https://en.wikipedia.org/wiki/Life-cycle_greenhouse_gas_emissions_of_energy_sources https://en.wikipedia.org/wiki/Life-cycle_greenhouse_gas_emis...
  - rglover 4y ago
    > How would being more reliant on fossil fuels help them now? The problem is they are struggling to import enough. Right. That problem exists because they drew back their own fossil fuel production to switch to renewables which are not providing the commensurate energy required, forcing them to go to outside providers. > False. There have been dozens of lifecycle analysis studies they find a more than 10x advantage of solar and wind over gas per kwh. Now do the factories to produce the components in the renewables, the trucks to ship the components, the equipment to install the components, the trucks to get the workers to maintain the components, etc. Batteries? You need massive trucks that can only run on diesel to mine the metals necessary to make them work. You're releasing insane amounts of emissions and wasting tons of energy just to say you're not on paper. It's absolute lunacy.

newaccount74 4y ago

But isn't making renewable energy more profitable still a good thing? It still incentivises building wind farms quicker, and the more wind farms we have the less dependent we are on gas.

black_13 4y ago

hedora 4y ago

Are there any carbon offset programs that actually do reduce atmospheric carbon? Is there some sort of reputable certification board in this space? John Oliver had a great piece looking at the industry (linked elsewhere here already), but didn't provide much actionable advice. (Other than to never give The Nature Conservancy any money under any circumstances.)

outside1234 4y ago

We have to stop considering these offsets as having any virtue.

Tarsul 4y ago

we should be real here: The idea of carbon credits/certificats is better than doing nothing as generelly these steps should help (better to put money where it could be worthwhile than where we know it ain't). Where it doesn't help, we have journalists and other organisations that show this (like in this example), so that the bad apples can be separated from the good apples. What really counts is the following: Having the right aim, listening to concerns and changing course where necessary. What doesn't help is unnecessary cynism (and drive-by posting). And of course we can gain the most if our politicians are using adequate incentives. As for the certificates from Gold standard: They also have recycling projects, reforestation (yeah, i know that the discussion about this is ongoing as well!) and some programs where poor people are helped with appliances that are less environmentally damaging. Everyone can invest in whatever project one wants. We can argue about which of these programs help the most (especially since we don't really differentiate between carbon reduction, carbon sinks and carbon capture), BUT what counts is that we, as people of this planet, are trying and improving.

pas 4y ago
> what counts both counts. intent and efficiency (results). the big problem is that there is no agency that would fine/sue the shit out of these scams.

jms703 4y ago

Where does the money go?

crackercrews 4y ago

> These days, the cost of generating electricity from such sources (wind/solar) is roughly on par with that of fossil fuels. I've never seen a cost analysis that takes into account the unreliability of sources that rely on sun or wind. I don't know exactly how a proper model would account for these factors, but surely ignoring the unreliability isn't the right answer.

Ensorceled 4y ago
This is only an issue once we stop having electricity sources that can be turned on reasonably quickly when wind or sun is under producing (such as natural gas and, to some extent, hydro electric). Since wind/solar is still a small part of the overall contribution, there is no need to model unreliability. Ideally this would BECOME an issue in the future.
- crackercrews 4y ago
  Ask the western US if it is an issue right now. If you don't hear back it's because their power is out.
  - Ensorceled 4y ago
    I didn't realize California etc. had hit the level of dependency on solar/wind where this could be a factor. Good on them.
    - crackercrews 4y ago
      The people who lost power and couldn't cool themselves down in 100 degree weather might not agree with your congratulations from afar. They might also not like that their energy costs are dramatically higher than even in neighboring states. But if it makes you feel better, I guess that makes it all good, right?
      - Ensorceled 4y ago

rizoma_dev 4y ago

At some point knowingly engaging in this type of behavior should be considered a crime against humanity

layman51 4y ago

This reminds me that I had seen some other article about how sometimes, projects to plant a bunch of new trees are not successful because of maintenance or upkeep costs that may not have been thought out.

Tyndale 4y ago

tppiotrowski 4y ago

> Transactions like this undercut the basic concept behind carbon offsets—that they should fund green projects that wouldn’t be possible without the additional cash they bring. Is this really the basic concept? I thought it was meant to deliver carbon cutting at the cheapest cost. Redesigning a Delta airlines jet to be electric or make the engine more fuel efficient is $$$$. Now, there is a village in India that uses a coal power plant. It's cheaper for Delta to build a solar power plant in India, shutdown the coal plant, and claim all the carbon output they've reduced in India then to try and build a new airplane. Capital is therefore efficiently allocated to whatever carbon cutting project is the cheapest, therefore maximizing carbon reduction per dollar spent.

opportune 4y ago
Since delta is paying to convert a coal plant to a solar plant, carbon offsets create perverse incentives like allowing you to “sell” or hold hostage something you were going to do anyway, keep inefficient things around so you can sell offsets lager, or start off doing something inefficient or bad so someone can pay you to stop. For example, as a fisherman it might be cheaper for me to buy some old, shitty, super-polluting boats, run them around for a bit generating huge amounts of emissions, and then go shopping for offsets. With the offsets I buy nicer boats that don’t pollute as much. But without the offsets I might have either not been fishing at all or gone straight for the nicer boats. Basically, carbon offsets in theory allocate carbon savings where they are most effective financially, but in practice create structural inefficiencies (incentivized to start polluting to fix it). Also, they are prone to double counting. If I open a wind farm partially funded by carbon offsets, if I claim that the farm is removing as much CO2 as it actually saves, I’m double counting along with whoever paid for the offsets to be “carbon neutral” when there is indeed still a net amount of carbon being put in the atmosphere
- crackercrews 4y ago
  Like the Great Hanoi Rat Massacre. [1] You get what you pay for! 1: https://www.atlasobscura.com/articles/hanoi-rat-massacre-1902 https://www.atlasobscura.com/articles/hanoi-rat-massacre-190...

liamconnell 4y ago

I go back and forth on the push for carbon neutrality for large companies (as opposed to some form of carbon tax). I'll give a few examples that I've seen first-hand in my work as a consultant. 1. A large state-owned African agricultural company is using satellite and soil-sample data to measure the carbon sequestration potential of agricultural land if certain farming techniques are used (no-till, etc). They use satellite and soil-sample data feeding into a biological model implemented in fortran (from some academic paper that may or may not be replicated) for the estimation. The plan is to go to farmers and ask them to switch the technique. The company would sell carbon credits, give the participating farmers a cut and keep the rest. This has great potential! but the large-scale implementation is very difficult manage. The company would at least need to randomly check in on participating farmers. It should also take soil samples over time to make sure the technique is working. Carbon credit sellers should be auditable, but the government relations and size of the company might make that difficult to do rigorously. 2. An analytics tool hopes to help large companies identify the parts of their supply chain that can reduce the overall carbon emissions of a product with the lowest price increase to the end-consumer. Think about BMW sourcing steel from China for example. If this helps companies actively manage their supply chain in order to lower emissions, then suppliers will adopt to low-carbon techniques over time. The problem is that it requires suppliers to disclose their emissions accurately. Many supply chains in carbon-intensive industries are global and fragmented. If a bad-actor supplier on the other side of the world lied and got caught, they could just change their name and carry on. 3. Global supply chains also present issues with carbon taxes at the drilling/mining site. You can't force foreign countries to tax this (and if you did they would be incentivized to cheat), and you can't force foreign companies to accurately disclose energy use. A domestic energy tax would make local manufacturing uncompetitive, which is something most countries are not willing to sacrifice. The debate between carbon neutrality vs carbon/extraction taxes is the choice between inventing an entire new bureaucracy of enforcement (carbon audits, carbon disclosure, etc) or the impossible task of rallying and enforcing global action (every country imposes the same tax, no exceptions). As an engineer, I understand the seeming beauty and efficiency of the second option, but I think the first is ultimately going to be our best bet.

newaccount74 4y ago
> A domestic energy tax would make local manufacturing uncompetitive That's what tariffs are for? Products from countries that don't tax carbon could just get a carbon tariff added on import.

2OEH8eoCRo0 4y ago

Tax fuel sources by amount of carbon dioxide that they release. It will increase the cost of electricity generated from those sources and discourage their use. Use the tax money to fund green energy research, green energy production, carbon capture, etc. Don't fight the market, act on the source and the market will adjust.

david422 4y ago

I installed solar panels on my roof and one of things you can do is then sell your home carbon credit on the market to some buyer. Which basically means that while you are still offsetting carbon by generating solar on your roof - since you've sold your share - that morally you are still responsible for your carbon footprint. I opted not to sell mine. It wasn't worth a ton of money and part of the reason I got solar anyways is to reduce the carbon footprint. It also seemed crazy to me that this was even an option that existed.

aero-glide2 4y ago
Even if you sell, you are still reducing the carbon footprint by 50% though.

kisamoto 4y ago

If you're a small business struggling to understand carbon offsets and removal I'll be happy to help. I run https://carbonremoved.com/ https://carbonremoved.com/ for individuals and we're beginning to work with businesses too. Email me at "ewan@" the domain above if you'd like to take real action towards net zero.

BryLuc 4y ago

tdaltonc 4y ago

If you're looking for an alternative to the (very problematic) carbon offset (CO), check out Renewable Energy Credits (RECs). COs are designed to incentives reducing CO2 in the atmosphere, but verification and traceability problems make it hard for them to achieve that goal. RECs are designed to incentivize the construction of renewable energy based power plants. They're easier to monitor because verification is handled by grid operators checking the number on the meter. We (Jasmine (YC-S22)) (https://www.jasmine.energy/ https://www.jasmine.energy/) are building a RECs exchange. Governments handle REC verification. We handle liquidity, efficiency, and traceability.

ZeroGravitas 4y ago
Though ironically, this is exactly what is being attacked by the article. They're arguing that giving money to renewables producers should only be done, if the renewable wouldn't otherwise be a viable business, and that some credits are from older renewable energy projects that got grandfathered in, before the offset organisations decided that they could spend their money more effectively elsewhere since the renewables would get built anyway.
- tdaltonc 4y ago
  The UN's Clean Development Mechanism (CDM) is very different from Renewable Energy Certificate programs. CDM project, as a type off Carbon Offset, are supposed to be targeted have "additionality," meaning, as you said, that the project wouldn't exist if not for the subsidy. RECs are supposed to be universal because they're about tracking the production/consumption of all renewable energy on the grid. That universality makes fraud much harder.
  - ZeroGravitas 4y ago
    Unbundled RECs have the exact same "additionality" issue, and I'm assuming if you're creating a market for all renewable energy on the grid, you are talking about unbundled RECs. This quote on your site appears to confirm that: > Most generators don't know they are accruing valuable credits they can sell. If you are a generator selling these credits you could off-set the cost of your system.

deleted 4y ago

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otabdeveloper4 4y ago

No kidding? Wow, who could have predicted!

rmolin88 4y ago

John Oliver recently did an episode on this: https://youtu.be/6p8zAbFKpW0 https://youtu.be/6p8zAbFKpW0

mltvc 4y ago

There are a lot of valid criticisms to be made about the voluntary carbon market but at least it's something that is being done right now. At Sylvera, a carbon offset rating agency, we create very thorough analyses of all projects issuing offsets. Based on scores for carbon score, additionality and permanence we create ratings that buyers can trust to avoid being scammed. This transparency is fundamental to the functioning of this market.

tech_tuna 4y ago

Carbon offsets are like recycling plastic. The better alternative to recycling plastic is not producing and buying stuff made out of plastic in the first place.

xphos 4y ago

Two words carbon tax. You cannot fake escape it or

deleted 4y ago

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refurb 4y ago

Reminds me of buying indulgences from the church to absolve yourself from your sins.