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