Offsets

On the island nation of Vanuatu in the South Pacific, 20,000 acres of deforested land are supposedly being converted to a plantation with millions of super carbon-absorbing trees.

The company behind the scheme, Eco2 Forests, has been pitching its plan as a moneymaker for investors, with cash coming in almost immediately through the selling of carbon credits for the CO2 those trees would one day sequester. It's already claiming conspicuous success in sprouting its special "Kiri" tree in faraway places.

From November 2009 through January 2010, Eco2 — which launched last July and boasts offices in Australia and California — released a flurry of news aimed at investors: executive appointments, new headquarters in Sacramento, tree plantings and a flashy web site that contains several pages on how to invest directly with the company.

The biggest announcement, though, was a "multi-million dollar carbon credit deal" with a Colorado company, which appears from public records and interviews to be operated by executives from Eco2.

That connection raises serious questions about both firms — and more generally, of the transparency in the nascent forestry carbon market.

The new Greenpeace report Business as Usual describes "five maximum points of danger" in the House and Senate climate bills. SolveClimate will be reposting each of those arguments over the course of the week.

“Handouts and Loopholes.” Those three words constituted the headline that The Economist used on its May 21 article on the American Clean Energy and Security Act (ACES). “America’s climate bill is weaker and worse than expected,” the magazine elaborated in the sub-head.

This should come as no surprise. One of the consequences of imposing a price on carbon is that it creates a new currency called carbon credits, and everyone on K Street wants to get their hands on this new money. Congress has complied with one of the biggest proposed giveaways in American history.

There are three fundamental industry giveaways that individually and together constitute an existential threat to the cap and trade system the bill is aiming to create:

The International Energy Agency states in its 2008 World Energy Outlook that global energy demand will likely increase 45% by 2030. Developing countries led by China and India will account for 97% of the related rise in carbon dioxide emissions, and by 2030, they will supply 67% of the energy-related CO2 that enters the atmosphere.

Using 450 atmospheric parts per million (ppm) of CO2 as the ceiling for effective climate change mitigation, the Energy Outlook concludes: 

[Developed] countries alone cannot put the world onto a 450-ppm trajectory, even if they were to reduce their emissions to zero.

In post-Kyoto negotiations, developed and developing countries have generally split on what the world should do about this fact. While there is a consensus that the CO2 footprint of economic growth must be greatly reduced, the sides differ on how the costs of this makeover should be divided.