Carbon Credits: Green Or Not?
    By Jane Poynter | July 31st 2007 11:53 AM | 10 comments | Print | E-mail | Track Comments
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    Jane Poynter is one of eight people to live sealed inside the artificial world of Biosphere 2 for two years. The three-acre enclosed terrarium


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    There is so much green being bandied about that it’s practically impossible for us mere mortals to sort out the true green from the green wash. Some of the claims are indeed true, some are a pile of hocus pocus, and some are well, good in theory but too bloody bad because of unintended consequences. So in this, my new series about what’s green and what’s not, I am going to attempt to figure out just that. You and I can then vote green thumbs up, or alternatively, down. (See the thumb key at the end to see how to rate).

    In this my inaugural piece, I thought I’d go straight for the jugular, and tackle that most maligned of issues… carbon credits. Do they have an objectively positive effect on our atmosphere, or are they – as many claim – only a license to pollute?

    Firstly, let’s make sure we all get the basic concept, which, if you’re reading this you probably do. But just in case, here goes...

    Let’s say your next door neighbor starts grinding away on his electric guitar at three in the morning. He’s not only burning through your patience, but electricity, which usually comes from carbon dioxide-emitting power plants. Carbon dioxide (CO2) is, of course, one of the primary greenhouse gases making our global thermostat rise.

    Your neighbor can now keep you awake with a clear conscience – he can shell out to deal with his guitar’s pollution. Here he has two options: he pays to either 1) support companies/projects that remove existing CO2 from the air, or 2) buy into a project that theoretically prevents an equivalent amount of CO2 from going into the air. That’s a carbon credit, or offset, or reduction. His serenade may be contributing to your stress, but not global warming… in theory.

    The concept is grand. For under the cost of one grande cappuccino a week – about $100 a year – you can buy enough carbon credits to essentially add no CO2 to the world’s atmosphere. You’d be ‘carbon neutral.’ If every human was carbon neutral there’d be no more global warming.

    This same general principal holds true at the country level too. Under the United Nations’s (U.N.) Kyoto protocol, if country A isn’t going to make a deadline to reduce its carbon emissions to a given allotment, it can purchase credits from country B, or UN-accredited projects in the developing world.

    The concept sounds so brilliant, such a win-win, what’s all the fuss about?

    The first issue – and perhaps the most confused issue in the retail market in particular – is whether a carbon credit is truly ‘additional’. That’s U.N. jargon that basically means “would the carbon reduction have occurred anyway if the carbon market didn’t exist?” For example, let’s say our midnight guitarist bought carbon credits that paid farmers to plant a bunch of trees that store carbon in their trunks and soil. If the farmers were going to plant their trees anyway with or without your annoying neighbor’s money, then all the fellow has done is give a nice little bonus to the farmers. His cash has not added at all to the amount of carbon reductions. The poor bloke’s carbon credits are not additional and thus entirely bogus.

    However, if the farmers were scraping by and couldn’t afford to plant those trees until our budding musician came along and paid them, then the resulting carbon credits are additional (assuming they meet several other criteria, if you use the U.N. guidelines).

    Now we get to a second rather unfortunate issue, the permanence of the carbon credits/offsets/reductions. How does our musician know that the farmers will still have his trees in 10 years, 20 years, 40 years?

    A couple of years ago, the band Coldplay paid villagers in India to plant mango trees to sequester the carbon the band emitted during CD production. The villagers would soon have fruit, and the trees would soak up the CO2. When someone checked on the status of the trees only a couple of years later, many had shriveled and died from lack of care and watering. Ouch!

    This inability to guarantee permanence for some sequestration techniques is why advocates of carbon credits tend to prefer projects that stop CO2 and other greenhouse gases from going into the air in the first place. The CO2 prevented from going into the atmosphere by making an old, inefficient coal-fired plant more efficient will forever more not have gone into the air – if you see what I mean.

    At the country level, most carbon credits fall under fairly rigorous regulation by the U.N. – except for those in places like the U.S. that do not fall under the Kyoto Protocol and so currently have no laws governing them whatsoever. For us consumers valiantly trying to do the right thing and offset those emissions that we just can’t do anything about (I’m sorry, but I am not riding my bicycle to work in over 100 degree weather), the world of retail carbon credits is unregulated, and an utterly confusing mess.

    Currently there are over thirty online retailers, and they are definitely not made equal. Some are altogether iffy, making claims that frankly aren’t true. (Currently, carbon credits based on Renewable Energy Credits are questionable at best because of the inaccuracies of calculating carbon reductions with them. And don’t be fooled into thinking that they’re certified for said use, as some might like you to believe. A few months ago I called the certifier to confirm, who said it’s not so.)

    Last year, Clean Air Cool Planet wrote a good report that analyzed the sellers and the quality of their products – how they calculate the amount of carbon they claim to offset, whether they include additionality, and a bunch of other metrics.

    The report shows that none is perfect, but some do have solid products, that not only reduce CO2, but help people too. Through such groups as Native Energy and Climate Trust you can, for instance, pay a struggling American farmer to plant his fields with windmills. He can then sell clean electricity to the grid.

    Carbon credits represent a horribly complex market, and I’ve only touched on a couple of the challenges facing those trying to make it work. I believe that whether carbon credits are useful or not depends on the execution. One reason I give carbon credits a green thumbs up, even with all the caveats, problems, fraud and other nefarious activities charading as positive actions for our global atmosphere, is the power of historical data.

    In the latter half of the 20th century, acid rain was a hideous environmental problem, killing forests and poisoning lakes and streams. High levels of nitrogen oxides and sulfur dioxide (NOx and SO2), mostly emitted by power plants, react with gases in the air to create nitric and sulfuric acid. These compounds also cause asthma. Almost 16 million tons of SO2 wafted into the air in 1990 alone.

    That same year, Congress amended the Clean Air Act to include a mandatory cap and trade scheme for SO2 akin to carbon credits, with extraordinary results. By 1995, the emissions had dropped by more than 20%. By 2002 they were down below 50% of 1990 levels, and acid rain is pretty much a thing of the past (Environmental Defense Fund ).

    Would that the carbon market has such an effect on greenhouse gas emissions! In 2006, $34.5 billion-worth of carbon changed hands worldwide, according to Point Carbon. Has that resulted in an equivalent amount of CO2 reduction? That would be a resounding no. Has some of that money prevented CO2 from going into the air that otherwise would have polluted the skies? Yes. How much is impossible to say.

    In the final analysis my P.O.V. is that carbon credits are valuable for fighting greenhouse gas emissions, but that a lot of ground needs to be covered to increase their reliability and relevance. For instance, in the U.S. they need to be regulated, otherwise just about anyone can make any claims and it’s practically impossible to substantiate them. They should be mandatory for major polluters, otherwise they have no teeth.

    With the disclaimer to those of us buying retail credits of 'buyers beware', I currently give carbon credits one green thumb up.

    Please let me know what you think. Or contact me if there is something in particular you’d like me to look into to find out whether it is green, or not.




    Well there is still a lot of deforestation going on. We would not be cutting down the Amazon, if the local farmers and the local governments did not feel they needed the land for economic reasons ... But of course corruption exists wherever there is a global or government initiative. However I know many places that could do with money from whatever source to fund tree planting initiatives. The Cold Play example is an unfortunate reality where clearly an idea was 'sequestered' by someone, instead of the funds being used where the local people saw the benefit of their actions. Great to come up with a few thousand dollars for a tree planting initiative, and ask for an army of volunteers, but unless you sustain the momentum (funding) it can all come to nought. However significantly reducing emissions from road transport and air travel is the way to go. Tree planting and forestry management should be motivated more by local welfare and environment concerns. Of course those who know about funds and how to apply for funds will always get first shot at said funds - in any field.
    Jane Poynter

    I appreciate your comment. There are a bundle of studies that show that just about any well meaning project in a developing country comes to little if it is not initiated by, or at least have complete buy in from the people who are supposed to benefit from said project. And indeed corruption is a massive problem. I sailed up the Red Sea years ago and along the way was sold large bags of rice marked "US Food Aid."

    Thankfully, both of these points are now well understood by most of the large organizations, including the World Bank - or at least the people I've worked with there. And a lot of lessons are being learned about how to optimize this whole carbon credit market so purchases don't result in nothing but a load of dead trees.

    I am for forestry as part of this market, BTW. There are issues with permanence, which are being addressed through various ways of insurance and replacement strategies. But there has been such devestating amounts of deforestation that have had gigantic ramifications in people's lives, from landslides to dropping water tables and pestulence, that the benefits far outweigh the obvious issues with forestry being used as a carbon sequestration tool.

    It is clear that man has reshaped the surface of this planet, and continues ro do so at an accelerated rate. (Western) Europe is a classic example of how the will of governments in modern economies, can pool their resources to clean up the rivers & land, and the pollution legacy of 200 years of industrial revolution. Dubai is a classic example of man's ingenuity, from the nothing and the desert sand can rise an architectural landmark. However the boom in the building, construction & industry in China and India as elsewhere are driven by the quest for profit and quick returns, regardless of the damage to the local environment, let the next generation pay mentality. Whereas in point of fact Modern Economies are sophisticated enough not to be driven by private or financial interests. Investment in reclaiming land (or flood defences in Orleans)may not be attractive options for those interested in short term 'returns' - however flood defences (as in Holland) and reclaiming desert lands (Saharan fringes), make economic sense to forward looking governments. There are swathes of the Amazon being earmarked as natural reserves, but they are a small pacthwork in the vast area that is bein lost to deforestation. And it is being lost to deforestation for the benefit of a few, the 'perceived' benefits to many, and the total disregard for the minority with no political or economic voice. Sure Sting can sing but he cannot stop the bulldozers. However if the governments, the local state governments were paid NOT to cut forests down and were offered access to alternative means of creating jobs and economic progress, they would not cut the forests down. And if there are any Carbon credits going round I have hundreds of acres in the Andes of Colombia (Sierra Nevada) that have been stripped bare for firewood or cattle grazing which would benefit from tree planting initiatives. And we have the technology to supply water further into the desert to reclaim the desert (without over intensive use of nitrates) - even to supply the water needs of California. It is a matter of will of political will. Amazing that governments who can at will invade countries of their choosing are powerless when it comes to acting on taking care of the planet. As for bags of US Food Aid being 'sold' Well more shameful is that Africa cannot feed its people, yet it presumes to insist on being 'free' to sell its produce to the EU. I say feed the people first, and sell the surplus, not sell the produce to profit the few, and then ask for AID to feed the (many) hungry.
    Jane Poynter
    Yay verily!!!
    I wish I could say something positive about Kyoto, but as it is structured it appears to have accelerated globalization, and with it, emissions.

    Jane Poynter
    Hmm, interested to hear more about your thoughts on increased emissions because of Kyoto.

    It's only an opinion of mine, I can only cite circumstantial anecdotes, but I've come to a fairly strong suspicion in a round-about way ... no right-wing blogs, thank you, I don't even think they're onto this.

    What first hinted me onto this issue is the problem of back-dooring emissions. This concern has been discussed in the most-recent round of EU Carbon Trading discussions, where the ongoing trend of off-shoring production to China & Asia might be compounded by the additional incentive to cut carbon credit overheads. Perhaps partly a pro-labor concern, but the suggestion was clear that carbon credit overheads in Kyoto "industrialized" countries would give firms one more reason to shift production to Kyoto "developing" countries, apparently w/ the implicit point that there are insufficient lower-carbon energy sources for firms in Europe to exploit. Sensible environmentalists meet labor activists, but from what I read they appeared to commenting on an ongoing trend, not just a straw-man objection - and it was specifically cited as sending the emissions out the "back door."

    If that is true ... and I really can't attest to the severity of this trend but that it was brought to the attention of the negotiating parties, then if a domestic firm in fact evades carbon taxes/overheads by offshoring production, they are also functionally off-shoring (or back-dooring) their emissions.

    If all emission rates per unit of production were equal, no problem, after all under Kyoto the "developing" countries emissions per capita are lower. The problem arises when the emissions per unit of production are higher, and as it turns out China's emissions per unit of production are, on average, 40 percent higher than the global average. So when Western nations "back door" emissions to evade Kyoto carbon taxes, the emissions per unit of consumable products goes up. Ooops!?

    That and the shell-game scamming of Kyoto via certain Kyoto projects that garner China more salable carbon credits along with creating more ozone-destroying by-products ... and I've come to the conclusion that Clinton & Gore were correct in their assessment about Kyoto - that it lacked a phase-in schedule for the "developing" countries and also lacked proper accountability and performance metrics.

    I'd dare say Chinese soot emissions per capita are higher than any nation's as well, hence the Asian Brown Cloud, the 40% heating effect of soot over the Pacific, etc., the accelerated Arctic melt-off mostly due to dirty snow (a great deal of which originates in Asia, perhaps Siberia...).

    Hope that helps... You can read more about the soot discoveries & Kyoto scam in my blog....

    Best regards,




    Hi Jayne

    I'd also like to note ... I don't know if any of the participating Kyoto "developed" countries have shown a net reduction in CO2 emissions.

    Again, while my chaining of Kyoto problems is anecdotal, it doesn't look good. I'm concerned that cap & trade schemes may not work well in international forums.

    If a large part of global warming is in fact due to soot, then it might explain some of the inconsistencies in CO2-driven climate models. One of the counter-arguments about CO2's heating role is that CO2's additive effect lessons with increased concentrations of CO2. CO2 has an effect cap that is inversely logarithmic, where after a certain level of CO2 concentration, CO2 reaches an effect asymptote where CO2 blocks as much incoming soalr radiation as it traps.

    Prof. Lindzen of MIT has cited this modeling issue repeatedly, pointing at attempts to rectify climate models to match the observed warming trend. He has decried the "jiggering" of water vapor feedback loops and albedo / lambda black-body coefficients as flawed attempts to match the observed warming (to me that might be akin to rectifying the Ptolemaic system with epicycles).

    If soot is causing 12 percent of all warming (westerly soot traversing the Pacific), 25 percent of warming via the Arctic (w/ Greenland and tundra), and potentially another 10 - 15 percent elsewhere (tropical slash & burn, Asian Brown Cloud, Western industrialized sources), then we could be looking at a soot-borne heating effect that's potentially 45 - 50 percent of what was formerly only blamed on CO2. Note that the IPCC models listed aerosols as largely having an unknown effect, but BIASED toward cooling. This new finding of soots net heating effect might not turn climatology on its head, but it is a bit of a climatology upset, if you will. There has been some coverage of this in the British press in the past couple of years, but until Ramanathan & Scripps essentially validated these theories about soot net heating role, it was largely ignored. Apparently there are two camps in climatology, one looking only at CO2 and one looking at the net heating of dark, heat-absorpant aerosols as well as CO2.

    Other bloggers are covering this, BTW: A Change in the Wind: (Potential) Good News Friday: "If the World Pays Attention...", so I take heart I'm not some lone kook... ;-)

    Prof. V. Ramanathan's team's discovery - just 2 - 3 months young (announced in early August 2007) is now seeing broader coverage in the scientific press (see above URL).

    Best regards,



    Jane Poynter

    Thanks for that. I'll check into the soot heating effects as well as back dooring of emissions.

    The idea of carbon credits is great - whether they work or not is really based in their execution, as you point out.



    Thanks Jane.

    I'd like to see what you make of all this ... I wouldn't be so encouraged by the soot question were it not for both the Scripps Inst. research ( Ramanathan, et al ) & Hansen's own studies on the Arctic melt-off.

    I'm just an interested lay person, but factoring in an additional 10 percent for airborne soot doesn't seem out of the question to me. Perhaps it's playing a role in the Antarctic, I can only speculate, but then with climate science it's hard to avoid the conclusion that there's been a bit of speculation going on in many circles, esp. when the science misses a biggie like soot having a net heating effect.

    Most importantly the debate needs to be rationalized and plans made that are both feasible and have tangible results. If soot is as bad as I suspect it is, it may provide some answers to our problems. Soot mitigation will give the climate skeptics (industrialists and free market advocates) a face-saving position, some alarmists a relief-valve and climatologists a discrete component in their models that won't take 50 years to demonstrate.

    With soot better defined as a short-lived aerosol particulate, CO2's longer-term threat can be better delineated, assessed and managed.

    I don't believe clean coal has to be an oxymoron. Recent projects have shown that CO2 can be cracked via photovoltaics or cogeneration technologies, a key antecedent step in using FT Synthesis to recycle CO2 into usable fuel. There'll always be net CO2 output, but it appears it can be greatly curtailed. So long as coal is relatively cheap societies may well opt to absorb the additional costs of scrubbing its various emissions.

    Clean coal may in turn help save forests and glaciers, provided the use of coal can help ease increased price pressures on petrol reserves. If petrol prices can be moderated then the developing world might be able to find cook stoves and fertilizers affordable, easing pressure on the forests being used for fire wood and itinerant slash & burn agriculture (another large source of soot). With improved forest management, microclimate precipitation patterns might be restored to help rejuvenate all the various tropical glaciers that are suffering from decreased snows & reduced albedo. 

    It might also help deal with some other questions, like how to help industrialize Africa. Industrializing Africa with nuclear power is a no-sell option to the West at this point, but doing it with clean coal would probably prove cheaper in the long run and raise fewer global security concerns.