Offsets' Quality, Quantity Seen as Key to Cap & Trade

The role of offsets in a carbon cap-and-trade market is a key concern for stakeholders trying to keep tabs on the state committee created to help shape a trading market to cut greenhouse gas emissions in California. During a short public question-and-answer session with a few members of the California Environmental Protection Agency's Market Advisory Committee May 15, those monitoring the panel raised concerns about the quality and location of the offsets - whether they are based only in-state, in the U.S., or overseas. This was the Market Advisory Committee's third public session. Most of its deliberations have occurred behind closed doors. CalEPA insists that this committee, unlike two other greenhouse gas reduction advisory panels, is not subject to the state's open-meetings law (Circuit, April 20, 2007). Committee vice-president Larry Goulder said the group has been grappling with the degree to which carbon offsets should be relied upon in a cap-and-trade market. Another concern is whether both in- and out-of-state offsets should be eligible under California's program. The committee expects to release its recommendations for creating a carbon cap-and-trade plan in a draft report to the California Air Resources Board on June 1. CARB is responsible for implementing the state's greenhouse gas reduction law, AB 32. Carbon offsets are a financial device that attempts to neutralize contributions to global warming by buying carbon sinks. At present, the primary use for the offset funds is to buy forestlands or plant new trees in existing forests. Trees soak up CO2 so less ascends into the atmosphere to abet global warming. Chris Bush, Union of Concerned Scientists economist, insisted that carbon offsets be limited to 10 percent of allowable global warming gas emissions and that only in-state offset projects are eligible. "More than 10 percent would create an ineffective enforcement bureaucracy," he warned. Bush and some others insisted that a trading system complement - not replace - a regulatory regime to achieve the 25 percent global warming gas reduction mandated under AB 32. "There is no doubt in anyone's mind who has worked on this that a huge proportion needed to meet 1990 [greenhouse gas levels] will involve robust continuation of a command-and-control system," replied Winston Hickox, committee chair. AB 32's immediate goal is to roll back emissions to 1990 levels. Bogus, unverifiable offsets and mistreatment of people in developing countries to obtain offsets through the United Nations' Clean Development Mechanism (CDM) are ongoing concerns in some circles. However, a lawyer representing the carbon offset industry urged the committee to consider counting carbon offsets generated in developing countries, as allowed under the Kyoto Protocol. "The overwhelming amount of research on CDMs doesn't show the kind of human rights nightmares as suggested by some," said Nicholas van Aelstyn, Beveridge & Diamond attorney. He admitted that there were "bad apples" but added that voluntary standards were being developed to ensure bona fide offsets that comply with human rights laws. For example, it was reported that villagers in Uganda were forced off their land by developers of a tree planting project used to offset carbon emissions in Europe. Hickox said that his committee was striving to integrate environmental justice concerns into its work product. "Our full intention," he said, "is to reflect that we have listened to and fully considered input from the Environmental Justice Committee and public." A final public meeting will be held June 12 to take public input on the draft report, which will make recommendations to the Air Resources Board on how to build a cap-and-trade market.

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Offsets’ Quality, Quantity Seen as Key to Cap & Trade

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