Greg Easterbrook, whom I respect (even though I don’t always agree with him) has an interesting op-ed in today’s New York Times on carbon offsets.

He examines the issue and concludes that reducing greenhouse gases will be a boon for developing countries because it will be cheaper for us to pay them to reduce greenhouse gases than for us to.

Some environmentalists think it’s unfair that we can pay others for our environmental “sins,” but I think this is not a sensible way to view the problem. Greenhouse gases are global, not local, and wherever it’s cheapest to reduce them is best, since it’s the total in the atmosphere that matters. In addition, why would anyone be opposed to poor countries getting money from the rich countries, who are most responsible for global warming anyway?

But there is a deeper problem.

First, some perverse incentives can leak into such a system. If developing countries realize that they will get paid to reduce emissions then they have the incentive to build dirty plants, or (using Easterbrook’s example) leave their garbage dumps uncovered, so that then they can receive money to make them “greener.” I think this could be a serious problem and I’m surprised Easterbrook doesn’t realize it.

Also, carbon offsets don’t get at the heart of the issue, which is the incorrect price of carbon-based fuels and other greenhouse gases. Until we put a price on them that takes into account their effect on climate change, it will be cheaper to build coal plants than wind farms. This is why offsets are at best a very small part of any long-term solution.