Investigation Uncovers Carbon Credits Smokescreen
LONDON - Companies and individuals rushing to go green have been spending millions on “carbon credit” projects that yield few if any environmental benefits.A Financial Times investigation has uncovered widespread failings in the new markets for greenhouse gases, suggesting some organisations are paying for emissions reductions that do not take place.
Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway. 
The growing political salience of environmental politics has sparked a “green gold rush”, which has seen a dramatic expansion in the number of businesses offering both companies and individuals the chance to go “carbon neutral”, offsetting their own energy use by buying carbon credits that cancel out their contribution to global warming.
The burgeoning regulated market for carbon credits is expected to more than double in size to about $68.2bn by 2010, with the unregulated voluntary sector rising to $4bn in the same period.
The FT investigation found:
■ Widespread instances of people and organisations buying worthless credits that do not yield any reductions in carbon emissions.
■ Industrial companies profiting from doing very little - or from gaining carbon credits on the basis of efficiency gains from which they have already benefited substantially.
■ Brokers providing services of questionable or no value.
■ A shortage of verification, making it difficult for buyers to assess the true value of carbon credits.
■ Companies and individuals being charged over the odds for the private purchase of European Union carbon permits that have plummeted in value because they do not result in emissions cuts.
Francis Sullivan, environment adviser at HSBC, the UK’s biggest bank that went carbon-neutral in 2005, said he found “serious credibility concerns” in the offsetting market after evaluating it for several months.
“The police, the fraud squad and trading standards need to be looking into this. Otherwise people will lose faith in it,” he said.
These concerns led the bank to ignore the market and fund its own carbon reduction projects directly.
Some companies are benefiting by asking “green” consumers to pay them for cleaning up their own pollution. For instance, DuPont, the chemicals company, invites consumers to pay $4 to eliminate a tonne of carbon dioxide from its plant in Kentucky that produces a potent greenhouse gas called HFC-23. But the equipment required to reduce such gases is relatively cheap. DuPont refused to comment and declined to specify its earnings from the project, saying it was at too early a stage to discuss.
The FT has also found examples of companies setting up as carbon offsetters without appearing to have a clear idea of how the markets operate. In response to FT inquiries about its sourcing of carbon credits, one company, carbonvoucher.com, said it had not taken payments for offsets.
Blue Source, a US offsetting company, invites consumers to offset carbon emissions by investing in enhanced oil recovery, which pumps carbon dioxide into depleted oil wells to bring up the remaining oil. However, Blue Source said that because of the high price of oil, this process was often profitable in itself, meaning operators were making extra revenues from selling “carbon credits” for burying the carbon.
There is nothing illegal in these practices. However, some companies that are offsetting their emissions have avoided such projects because customers may find them controversial.
BP said it would not buy credits resulting from improvements in industrial efficiency or from most renewable energy projects in developed countries.
Additional reporting by Rebecca Bream
Copyright The Financial Times Limited 2007
Just like starbucks cups “Made from 10% post consumer waste” What paper isn’t?
Doesn’t an oil company “recovering” oil for offsetting carbon emissions just a little hypocritical?
I’m SHOCKED!! Shocked I say. When the news about first John Edwards and then Al Gore’s enourmous, power gobbling houses came out any critics were accused of being right wing shills. Said Democratic politicians said they offset their habits with “carbon credits.” A result of the debate was that deep greens were purged from some of the larger liberal web boards for not playing nice.
Now we find that carbon credit trading schemes are truly being used to scam the public and allow excess consumption. This is no surprise since carbon credits cost $2.50 to $10 per ton and charcoal costs about $.50 per pound. How could that be?
Of course carbon credit proponents have complicted explanations involving leveraging wind and solar power production but increasing power production is not the same as decreasing pollution. To decrease pollution you have to actually close coal plants. We’re building MORE coal plants.
Until we get an honest carbon tax system that includes taxes on imports of goods and power made where there isn’t a carbon tax we will make little headway on Global Warming.
The pretense that we can eat ALL the carbon cookies and not lose weight..er… cook the atmosphere will always be more popular than diet and exercise…. excuse me, a carbon tax.
America needs to get itself out of the all you can eat greenhouse gas buffet and burn that establishment down. Carbon credits are like taking diet pills at the pig picking; just not effective.
Given the vagaries of “carbon offsets” and emissions “cap and trade” programs, which may or may not force the clean-up of old and inefficient technologies, can you say “CARBON TAX”?
CARBON TAX!
CARBON TAX!
CARBON TAX!
you know “cap and trade” schemes have got to be bad for ratepayers and the environment if they’re favored by big utilities like PG&E and Senator Feinstein.
It’s all a shell game. No pun intended.
Transit riders are paying more than their share to fight sprawl, end oil wars, reduce greenhouse gases. They are paying to keep 300,000 cars a day off the road. This should be paid out of general revenue.
http://www.freepublictransit.org
So just why is it the FT, and the head of HSBC, who are exposing the scams abusing the concept of carbon offsets ?
Has someboy castrated Greenpeace, Friends of the Earth, WWF, etc,
or did they never have any in the first place?
Patently the E.NGOs have stood by and said nothing while a potentially critically important tactic has been brought into widespread disrepute.
The reason I’ve campaigned against C Offsets since the mid-90s is not simply that funding extra renewable energy or extra energy efficiency does not save the burning of any fossil fuel.
They simply help to keep the fossil fuel affordable for people elsewhere to buy.
(This position will endure until we agree a binding global cap, and declining national allocations, for GHG emissions)
The core reason for opposing so-called carbon offsets is that the most direct system,
that of paying to have trees planted to bank the carbon,
sells the fraud of “Carbin Neutrality” when in fact this year’s carbon is not fully banked until 2067.
Moreover, given that having trees planted doesn’t cut my GHG output at all, next year I’ll need to have another batch of trees planted,
and so on.
The upshot is that my carbon debt would be cleared 60 years after my death.
Which is so far from being carbon neutral as promised as to be downright fraudulent.
We can of course plant sufficient trees this year to mop up this year’s emissions,
with the advantage that they will do so again next year,
but I’ve yet to hear of such a service being offered.
So just what exactly is the Live Earth concerts carbon neutrality worth ?
I think we should be told.
Regards,
Bill
Tim Flannery, and I believe other Global warming scientists, are saying that recovering prairie to forests will bring about more warming because forests are a darker color than prairie grass, thus a heat sink. What is needed he suggests is a long term plan to give wealth in the form of schools, hospitals, housing, etc to communities in and near tropical rainforests in exchange for protection and further development of those forests back into the large eco-system they once were as the most effective carbon sink modern society can produce.
Perhaps someone needs to start on that one now, since it seems there are a lot of people out there willing to give money in exchange for the carbon they are unable to eliminate from their lifestyle at this time.
We need to have at least a national plan to cut carbon emissions across the board–in every sector. Otherwise, our savings will likely be invested in more carbon increasing productions.
How unfortunate that pollution has been turned into the financial equivalent of pork bellies. Capping carbon and other pollutants could be really straightforward. With current rules, it merely allows the pollution to be churned around, with a few people getting rich in the process, and the public left with the mistaken impression that real reform is underway.
I wonder if opting for white cars and white buildings as opposed to dark colors would provide any benefit in deflecting heat, and compensate for a decrease in snow cap.
This is the way we’ll conquer climate change?