Gar Lipow offers up his latest critique of carbon offsets, which this time is based on a fundamental misunderstanding of the underlying science of greenhouse gases. The story, for those following along at home, can be summarized thusly:

  • Gar feels that carbon offsets are, among other things, the “enemy of the human race.”
  • I feel that offsets are an interesting policy option with kinks to be worked out. The kinks are not nearly so fundamental or intractable as some would have you believe.

The following discussion gets a bit dense, but it’s also highly instructive, so I recommend soldiering through if this is a topic you’re interested in.

First, a bit more background. The carbon reductions represented by carbon offsets are always measured from some emissions baseline, which represents the “business as usual” case — the level of emissions that would have occurred in the absence of the offsets. Depending on the project type, determining the baseline can be more or less difficult. For all offsetting projects, it is critical that the offsets represent emissions reductions that would not have happened otherwise. This property is known as “additionality.” High-quality offsets are said to be additional.

In my previous post on this topic, I pointed to one type of offsetting project that is generally regarded as highly additional. Decomposition of garbage in landfills produces methane, a greenhouse gas 23 times as potent as carbon dioxide. It is possible to capture this methane and burn it, removing it from the atmosphere and generating carbon offsets in the process. The offsets are considered highly additional because the economics of landfill methane flaring make these projects unsupportable in the absence of offsets. This is known as the “revenue flow” additionality test. Because offsets represent the only meaningful revenue flow to methane flaring projects, we can be confident that the projects would not have happened in the absence of offsets.

Gar responded recently to my post with a description of one such flaring project in South Africa: the Bisasar Road Landfill. Gar’s conjecture in this case is that without the revenue stream from offsets, the landfill might have been shut down entirely. Gar feels that this is baseline from which we should measure the carbon reductions brought about by the offsets. That is, the baseline that Gar recommends is a hypothetical one in which the landfill doesn’t exist at all.

This demonstrates a basic misunderstanding. There’s a lot to wade through, but I’ll jump to the main paragraph:

If you are measuring additionality of the Bisasar energy project, it seems like the chance that it might have shut down without the subsidy from CDM is not such a reach after all. In fact, there is a good argument that shutdown should be the baseline scenario.

The basic misunderstanding is that closing down a landfill does not destroy the greenhouse gases associated with it. The garbage doesn’t disappear. Neither do the waste streams from the local population. Closing a landfill does not help reduce greenhouse gases any more than closing a gas station does.

Further, if you click through to the article Gar links to — an article highly critical of the Bisasar project — you’ll find this statement:

No one is against extracting the methane from the rotting garbage. But Durban officials say they won’t go to the trouble of doing so without the $15 million subsidy, because the electricity generated in the process costs so much more per kilowatt hour than Eskom charges for its coal-fired power.

This, in plain English, is why landfill methane flaring projects are additional. They don’t pay for themselves. In the absence of offsets, the methane is allowed to escape into the atmosphere, which is bad for the local population and bad for the environment.

It feels a bit odd to be arguing this point at all, because, as I said, landfill methane flaring projects are generally considered to be highly additional. It would be a surprise to discover that they are not, and presumably some primary research would be required to support such a conclusion.

The Bisasar landfill does raise numerous environmental justice issues regarding the siting of garbage dumps in Apartheid-era South Africa. But carbon offsets did not create these dumps, or these issues. Further, carbon offsets can plausibly have a role in addressing such issues by functioning as a subsidy for clean energy development in the developing world.

I will hopefully be posting more often at Grist on topics related to carbon and carbon regulation. Most likely, though, I will not be continuing this running debate about whether offsets are evil, mostly because it’s not terribly relevant. Carbon trading is coming to the U.S. in a big way. Between RGGI in the Northeast and the California Global Warming Solutions Act, a large portion of the American economy will soon be operating under a carbon trading regime. The Chicago Climate Exchange, despite being voluntary, is already the second-largest carbon market in the world. As early as 2009, Congress could enact federal carbon legislation that places the entire U.S. economy under a cap-and-trade system.

There are many nuances to carbon market design, many of which I’m still acquainting myself with. I look forward to exploring these topics here.