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Offset Sellers Only Double-Dipping?

From Steven Malloy:

Congress began investigating the carbon offset industry this week. The inquiry could produce some "inconvenient truths" for Al Gore and the nascent offset industry.

Carbon offsets ostensibly allow buyers to expunge their consciences of the new eco-sin of using energy derived from fossil fuels. Worried about the 8 tons of carbon dioxide (CO2) emitted each year by your SUV? Similar to the indulgences offered by Pope Leo X in the 16th century, you can absolve yourself of sin by purchasing $96 worth of CO2 offsets – typically offered at $12 per ton of CO2 emitted – from offset brokers who, in turn, supposedly use your cash to pay someone else to produce electricity with low or no CO2 emissions....

A Capitol Hill staffer told me that the congressional inquiry would look into the possibility of “double-dipping” in the offset industry.

Only double-dipping?  Earlier, I argued that the purveyors of offsets may be triple dipping:

  1. Their energy projects produce electricity, which they sell to consumers.  Since the electricity is often expensive, they sell it as “CO2-free” electricity.  This is possible in some sates -- for example in Texas, where Whole Foods made headlines by buying only CO2-free power.  So the carbon offset is in the bundle that they sell to electricity customers.  That is sale number one. 
  2. The company most assuredly seeks out and gets government subsidies.  These subsidies are based on the power being “CO2-free”.  This is sale number two, in exchange for subsidies. 
  3. They still have to finance the initial construction of the plant, though.  Regular heartless investors require a, you know, return on capital.  So Terrapass finances their projects in part by selling these little certificates that you saw at the Oscars.  This is a way of financing their plants from people to whom they don’t have to pay dividends or interest —just the feel-good sense of abatement.  This is the third sale of the carbon credits.

Posted on July 20, 2007 at 09:50 AM | Permalink


You miss the entire structure of the industry. We sell one thing only, the verified carbon offsets, which we retire. This is independently verified in an annual audit.
We have no stake in the project and no government support.

Posted by: Tom Arnold | Jul 20, 2007 4:53:40 PM

Tom, it sounds like you're missing one point. It isn't what indulgences one can buy, it's what one can do in good conscience.

For example, it turns out the Gore wedding had sea bass raised in a "sustainable" farm so the press says it's all okay. By the same logic it would be perfectly acceptable for me to raise two pandas if I only ate one. In this matter the Gores not only contributed nothing to stopping widely acknowledged poaching, but encouraged it.

The publicity will encourage illicit traffic as trend followers buy the same dish. Sure, suppliers will tell them and the restaurant owners what they want to hear about how the fish were raised, but I need only point to the "authentic" grouper scandal here in Florida recently. (the State had to investigate/enforce labeling/advertising after the St. Pete Times ran DNA tests on local "grouper" dishes - this is especially big as it's the area signature dish) But I digress.

The whole thing reeks and the man on the street knows what clothes the Emperor isn't wearing. It's the arrogant attitude that we know what nature should be like. The world has been colder and hotter in the past and we frankly don't understand how. Yet because we're here at this point this is the way it should be and we're going to stop the cycle at this point? It's not even shown that we have more than a marginal impact.

But back to my point, it's not just hypocrisy but very insulting to see people do one thing while preaching others not to. That's the rub here, seeing people fly around the globe while their fleet of vehicles and mansions eat more in a week than I could in ten years. To add insult to injury I get to hear their sanctimonious crap about how I'm polluting more than they are. While they're at it I wouldn't mind hearing where I can get some "responsible" fur or ivory.

Posted by: Michael | Jul 21, 2007 7:13:53 AM


So they can't sell more formal offsets. Big deal. The companies still can get government money (a sale for being "green"), and buyers of the actual electricity can advertise they are buying green electricity.

This is a scam that is based on The Producers. The scam works because all the buyers have a negative return and don't expect to get something for their money.

To the extent that carbon gases are in fact a problem, then the offset industry is making things worse, not better, by duping people into thinking they aren't causing harm at the exact time that they are indeed causing harm.

Even if there wasn't double dipping or triple dipping, this would still be a scam. The only way this isn't a scam is if in fact the conversion to something green wouldn't have taken place. Having the person you are writing the check to swear on their honor that if not for the $10 check they wouldn't have built a $100,000,000 "green" electricity plant is simply laughable. At the margin this may it may in fact be the case that a company wouldn't have taken the plunge in the absence of a 0.001% increase (or whatever), but for the other 99.99+% of companies receiving such checks from credulous Hollywood jetsetters this is merely icing on a cake they would have happily eaten without frosting.

Posted by: happyjuggler0 | Jul 21, 2007 12:22:30 PM

Did someone say HYPOCRISY?


Posted by: Scott | Jul 22, 2007 7:57:45 PM

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