Comments on: Accounting for Offsets

By: markm

markm — Fri, 27 Apr 2007 16:44:01 +0000

It is of course possible to honestly sell one thing in two or more slices. Example, land sold without mineral rights – although I think that’s been a bad policy in the long run, since it causes a conflict when the mineral rights owners want to tear up the surface, owned by someone else, in pursuit of what they own.

A better analogy: Say I run a “soup kitchen” serving meals to the poor, which at a normal restaurant profit margin would cost $3 each. However, my customers can only pay $1 each. (I charge them something so they appreciate that the meals are of value and don’t waste them.) The local welfare department chips in another $1. For the rest, I depend on private donations. Rather than just begging for money, I’m offering $100 certificates that say, “I helped feed 100 poor people”, so rich liberals can put them on the wall and impress each other. (For conservatives, maybe I’d offer to keep their donations secret from everyone but the IRS.

So I’m quite honestly selling the same meal three times, for 1/3 of the market value each time. No problem there – as long as I’m honest.

The problem is, it’s very difficult to ensure I stay honest…

By: eddie

eddie — Fri, 27 Apr 2007 16:07:58 +0000

Since you're just pointing to your previous posts without amplifying or amending your argument, I'll just point to my comments in those posts which explain why your argument is wrong in many substantial and fundamental ways.

I will add that the Times article points to "many" of the offsets and/or offset resellers being bad, but doesn't say that all of them are bad, and doesn't mention Terrapass as being one of the bad ones. But you say "companies like Terrapass are probably selling their CO2 offsets at least three times" without a shred of evidence that Terrapass is doing any such thing and in spite of direct citations to Terrapass' policy and practice documents showing that in fact they do no such thing.

There are some crappy parks out there. Would it be reasonable for me to post something on my blog saying "A lot of parks like the ones run by those Lake Havasu guys are probably so crappy they don't even have jetski rentals." ?

Could it be that, like any other product or service you might want to purchase, there are good providers and bad providers of carbon offsets and that a little bit of research can help you distinguish between the two?

By: Jim Collins

Jim Collins — Thu, 26 Apr 2007 20:43:40 +0000

I may have said this before but Charles Ponzi would be proud of the Carbon Offset scam.

By: dearieme

dearieme — Thu, 26 Apr 2007 19:32:00 +0000

Whoever first dubbed these scams “indulgences” deserves a pat on the back.

By: MGW

MGW — Thu, 26 Apr 2007 17:04:44 +0000

I think the low price offered is really just evidence of what you previously stated, that these companies are selling the same thing multiple times. Realistically, they are already selling their electricity as CO2-free and in theory, the rates they charge should be enough to cover the depreciation on their power generating assets. Therefore, I think the whole TerraPass idea is simply to sell it again for whatever price the market will tolerate. After all, $399 is a lot more tolerable than $700k.

I think a good business opportunity here (and it may be what these companies are already doing) would be to partner with lumber companies, power companies, and any other industry that does anything you could claim is reducing CO2 and then purchase their "offsets" from them for a very low price (the lumber company would be planting trees and the power company would be trying to be more efficient regardless of what you do) and then resell them to suckers.

By: Phil R

Phil R — Thu, 26 Apr 2007 17:00:05 +0000

It was already pointed out to you earlier that the reason for the absurdly low figure of $100 billion is that you’re extrapolating based on current prices which reflect the “low-hanging fruit” of CO2 mitigation possibilities. If you were to actually go out and try to buy that many, you’d of course find the cost much higher than $100 billion. The supply curve isn’t flat.