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Countries Gaming Carbon Offsets May Have Dramatically Increased Emissions
schwit1 writes: Abuse of the carbon offset system may have caused emissions to increase by as much as 600 million tons. That's the finding of a new report from the Stockholm Environment Institute, which investigated carbon credits used to offset greenhouse gas emissions under a UN scheme. As one of the co-authors of the report put it, issuing these credits "was like printing money." From the article: "In some projects, chemicals known to warm the climate were created and then destroyed to claim cash. As a result of political horse trading at UN negotiations on climate change, countries like Russia and the Ukraine were allowed to create carbon credits from activities like curbing coal waste fires, or restricting gas emissions from petroleum production. Under the UN scheme, called Joint Implementation, they then were able to sell those credits to the European Union's carbon market. Companies bought the offsets rather than making their own more expensive, emissions cuts. But [the studey] says the vast majority of Russian and Ukrainian credits were in fact, "hot air" — no actual emissions were reduced.
"Companies make money creating a product that no one checks to make sure it's not bogus"
In this case, carbon credits are mandated for a product that literally doesn't exist: CO2 supposedly not emitted. Of course it's going to be a joke.
I had people telling me I was crazy for saying exactly what you said. I was called a 'republican shill'. But basically if you create imbalances in the market like this people *will* exploit it. There is money involved. I have seen people cheat to get a 30 cent toy. What makes people think they would not game it for millions?
you've actually got to enforce regulations to get them to work or people will defraud others
Pay attention. Over and over again we see government programs that shouldn't exist at all gamed by fraudsters, from welfare to education vouchers. Now you are shocked that this stupid corporate welfare is being gamed and abused? It was obvious that that was going to happen from the very start, and it should be obvious to you that the government never has a history of properly enforcing regulations to stop fraud. The policy is only to expend a tiny amount of effort to catch one or two offenders and "make an example" of them, but the others ignore this and continue collecting taxpayer money. You don't solve this problem by enforcing regulations, you solve this problem by not creating it in the first place, or admitting that it failed and shutting it down.
I'm an American. I love this country and the freedoms that we used to have.
This article singles out Russia and Ukraine, but a larger issue is CFC-23, a nasty greenhouse gas. It's a chemical byproduct which Chinese and Indian companies are deliberately producing in order to destroy, because the cause the credits for destroying the byproduct are worth five times the value of stuff they're nominally trying to make.
The article mentions this, but doesn't mention that CFC-23 fraud supplies HALF of all the carbon emissions credits sold on the European market.
The cheating problem is a big part of why I favor a straight up carbon tax rather than trying to get fancy with incentives and credits. Place a flat tax per ton CO2e on companies which generate or import fossil fuels or CFCs. They will pass this cost on to customers, making goods that require lots of fossil fuels cost more, so the market will determine which emissions reductions strategies are most cost-effective. You can return the tax money to the people via lower income or payroll taxes, use it to reduce the deficit, or use it to pay for green infrastructure, I don't care. One more element is needed to make this work: you need import tariffs on manufactured goods coming in from countries that don't have a comparable carbon tax. Otherwise countries that "offshore" their emissions will have an advantage.
In addition to being simpler and harder to cheat, this system is preferable from a "big gubmint is evil" perspective. Conservatives don't want a massive government bureaucracy inspecting every element of the supply chain, making sure the incentives are properly spent and the credits fairly earned, and neither do I. I just want to use their worst enemy, taxes, to make their best friend, capitalism, work to help the planet. Put a green thumb on Adam Smith's invisible hand.
I'm a free-market environmentalist. I say we need to stop hoping that greed will go away, or worse pretending it doesn't exist, and start using it as a tool.
Well I have to hand it to them, I thought getting paid for not growing corn was a good business to be in but this is much better.