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May 26, 2008

UN carbon offset program wastes billions

Think Oil for Food was bad? Try Money for Nothing.

Energy companies are scamming the United Nations' carbon offset program out of billions of dollars, the Guardian reports.

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I have the gravest reservations about every one of these "carbon offsets" programs.

>I have the gravest reservations about every one of these "carbon offsets" programs.

I'd have to agree. It's wide open to scamming, and could undermine the credibility of cap & trade systems.

You can measure in a concrete way the emissions from a smokestack, or from burning X gallons of gas or Y tons of coal. But how much does a forest absorb, or a windmill not emit? Too much room for creative numbers, or credit for doing nothing you wouldn't have done anyways.

From the description in the article, it sounds like a pretty goofy program: Paying people to stop using so much carbon, then arguing about whether or not they would have stopped using carbon anyway.

A better approach would be to tax people who are using carbon. Then, if they stop, the environment wins, regardless of why they stopped.

It's not just "wide open to scamming", it is a scam. Notice that no-one ever specifies the offset time-frame. Notice that there are absolutely no agreed standard as to what constitutes an offset, or how you should measure it. Notice that there is no future value discounting. Notice that the entire shebang is completely unregulated. It's a fucking scam, plan and simple. All that's needed to make it perfect is the ability to buy and sell future options on offsets, if such a thing doesn't exist already. Then companies will be able to sell offsets today, cover them by buying a long-dated option at a hefty discount, and bank the difference. Rinse and repeat as needed - before you know it, the offset you're buying to cover the carbon you're emitting today will actually be predicated on the adoption of fusion power sometime in the 25th century, assuming linear growth between now and then and that the only alternative is burning coal.

I have a theory about carbon offsets - they're going to be the basis of a new set of financial derivatives used to keep the Ponzi scheme we call "the economy" running for a few more years.

I'm also suddenly reminded of the time Homer paid Bart to quit smoking...

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