A carbon protection racket
The Waxman-Markey bill's 'international offsets' amount to paying polluting countries not to pollute.
If your neighbors were making a terrible racket, would you offer to pay them to stop?Skip to next paragraph
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Of course not.
Sure, they'll stop today. But they'll soon be clamoring for more payments.
One of the major features of the Waxman-Markey cap-and-trade bill – the ambitious climate change legislation recently passed by the House – offers just such payments. It pays polluting countries not to pollute. And, as with the noisy neighbor, this will just encourage a continuing racket.
Here's the story: India has offered to cap its greenhouse-gas emissions – but only at a level 10 times higher than its own emission rate. China will not accept a cap at all, and at the Major Economies Forum on July 9, China and India even blocked setting a target for world emissions in 2050. This trend confirms that other developing countries will also stick with their anti-cap positions, leaving half the world's emissions unchecked and growing far faster than emissions from the industrialized nations.
The Waxman-Markey bill was supposed to remedy this problem by providing US leadership, which poor nations would follow by accepting caps. But this hope ignored the inequities of caps and ignored the bill's offer of an estimated $13 billion a year – growing to $83 billion annually in 2050 – to buy "international offset credits" from developing countries.
Such offset purchases encourage poor countries not to accept caps. Global cooperation requires a reversal in US climate policy toward developing countries. We must reward cooperation rather than the lack of it.
Buying offset credits pays emitters in developing countries to emit "less than they would have emitted." But implementing a cap cuts back on what "they would have emitted," and reduces their profits from selling offsets.
The House bill did not create this offset problem. The European Union's cap-and-trade scheme has long allowed European companies to buy UN-certified offset credits instead of cutting their own emissions. As Stanford researchers Michael W. Wara and David G. Victor found over a year ago, Europe's offset purchases have not drawn developing countries into "substantial limits on emissions," but have, "by contrast, rewarded them for avoiding exactly those commitments." As a result of this perverse incentive, Europe's cap-and-trade market is considering rules to ban the purchase of UN offset credits from major developing countries.