In 2007 the Liberal government of British Columbia announced it would become carbon neutral by 2010 – for every tonne of greenhouse gases produced, it would purchase a carbon offset that would reduce or sequester a tonne of greenhouse gases. Like many carbon offset schemes, this one has been revealed as a scam.
At the end of March, the BC Auditor General’s office issued a scathing report on the Pacific Carbon Trust (PCT), a Crown corporation created in 2008. The PCT was created by the Greenhouse Gas Reduction Targets Act. The act directed the public sector – government ministries, school districts, universities, health authorities – to minimize emissions of greenhouse gases. The government did not provide the resources necessary to allow these institutions to eliminate their carbon emissions. Instead, these public sector organizations are required to purchase BC-based carbon offsets through the PCT. In 2010 the public sector diverted $18.2 million to the PCT. The Auditor General's report shows that this money, that could have been spent on programs and services, instead went into private pockets, with no net benefit for the environment.
The Greenhouse Gas Reduction Targets Act allows only certain types of carbon offsets. A project designed to offset carbon production must demonstrate that it faces “financial, technological or other obstacles which are overcome, or partially overcome, by the incentive of being recognized as an emission offset.” A project that would have happened whether offsets were purchased or not is not eligible for consideration. Instead they are called “free-riders.”
Another important restriction is the estimate of the quantity of greenhouse gas that could be reduced by the carbon offset-funded project. Although the baseline is hypothetical, an overestimate would allow for an artificially high number of carbon offsets, part of which are not real greenhouse gas reductions.
Based on these offset purchases, the Liberal government claimed it had achieved carbon neutrality in July 2011. This was a first for a North American government. The Auditor General's report reveals this was a lie.
The Auditor General’s report focused on two projects that accounted for 70 per cent of the carbon offsets purchased by the PCT and its overseer, the Climate Action Secretariat (CAS). For 2010, the public sector spent $18.2 million to offset 814,419 tonnes of greenhouse gas.
The audit of these two offset projects – Darkwoods Forest Carbon and Encana Underbalanced Drilling – found that the carbon neutrality claim is inaccurate, and that the offset sales were not necessary for either project to be implemented.
The Darkwoods Forest Carbon project in southeastern BC is an ecologically significant animal habitat purchased by the Nature Conservancy of Canada to manage the land for conservation. The project plan claimed the land was “under immediate threat of liquidation logging”, and that they would achieve greenhouse gas emission reductions by avoiding their release when the trees were cut down. The Nature Conservancy claimed the money from carbon offsets would allow them to overcome financial obstacles and carry out the conservation project.
The Encana Underbalanced Drilling project plan stated it would result in greenhouse gas emission reductions from reducing gas flaring as a result of the drilling of gas wells. Encana wanted to use on-site recovery and capture to then stream the gas directly into a pipeline, and claimed that the carbon offset money would let them overcome technological obstacles and begin the project.
For both projects, the Auditor General’s office concluded that the carbon offsets purchased were not credible. For the Darkwoods project, the carbon offset money was not a critical factor in the purchase of the land. The land was purchased in 2008, a carbon offset feasibility study completed in January 2009, and the PCT approached by the Nature Conservancy about offsets in late 2009. The Encana drilling project was started in 2009 and had already drilled and completed several wells prior to meeting with the PCT in August 2009. So, the projects would have gone ahead without carbon offset money.
The Auditor General also reported that both projects over estimated the greenhouse gas emissions that would be reduced.
The Darkwoods project's claims of an “immediate threat of liquidation logging” was not credible because those logging practices are not allowed under provincial forestry practices. Encana’s project would result in reduction of greenhouse gas emissions but there was an added wrinkle: the company was able to make money off of the gas capture project without funding from the PCT. The profits were estimated at $7 million – much greater than the cost of the technology.
System change, not climate change
In order to avoid catastrophic climate change we need to immediately reduce the amount of greenhouse gases we emit. Carbon offset programs do nothing to lower emissions because the whole point is to trade an emission from one operation for a reduction somewhere else. The total emitted stays the same. In addition, since most offsets reduce calculated future emissions to replace current real emissions the industry has been plagued with the sorts of scams that the PCT is responsible for.
Greenhouse gas reduction and action on climate change cannot be turned into a market transaction. As the Auditor General report states, “in offset markets, both the buyer and seller benefit from maximizing the number of offsets a project generates.” It is in the interest of sellers financially to overestimate the amount of carbon produced to increase profitability, and for buyers to focus on the quantity of offsets available, rather than their credibility.
The Liberal government’s carbon offset scheme and those elsewhere are designed to give the illusion that something concrete is being done to address climate change.
The only way to deal with climate change is severe regulation of all carbon emissions and extensive development of renewable energy. The capitalist market that created these problems needs to be replaced by a system that puts the environment and the people living in it ahead of corporate profits.
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