Lake County Record-Bee

Cap and trade, offsets at a crossroads in climate policy

- By Kathleen McAfee Kathleen McAfee is a professor of internatio­nal relations at San Francisco State University, kmcafee@sfsu.edu.

Should oil refineries in California be allowed to emit extra greenhouse gases if they “offset” their effects by paying hog farmers in Iowa to reduce methane from animal waste? Or by paying landowners to promise to take better care of their trees? In other words, should offset trading based on projects like these remain part of our state’s climate policy?

This is a big question facing the California Air Resources Board at a hearing this week and over the coming year as they revise the rules of the state’s climate law, AB 32 / AB 398. Under that law’s capand-trade section, any California company that purchases approved offsets may emit more planet-heating gasses than would otherwise be allowed.

Offsets pay for climatefri­endly projects, mostly for improved forest management. Proponents contend that, over time, those projects will capture an amount of carbon or prevent the release of greenhouse gases equal to the extra amount a company may emit in one year. Offsets themselves do not result in any decrease in greenhouse gases; they simply make the extra emissions legal.

But California’s climate policy is already failing to reduce planet-warming emissions fast enough to meet the state’s 2030 target. This reality is recognized by a new state auditor’s report, the Legislativ­e Analyst’s Office and increasing­ly, our lawmakers.

Why are we falling short? Offsetting and cap and trade — allowance trading — are playing a much larger role than the law’s designers originally intended. Too many allowances — tradable permits to emit greenhouse gases — are sold or given away. A glut of unused allowances reduces demand for them and lessens the incentive for polluters to curb their emissions: why not buy cheap allowances and even-cheaper offsets instead?

Since offsets are making this problem worse, it is bewilderin­g that a new report by the

Air Resources Board’s Compliance Offsets Protocol Task Force recommends even more ways for companies to pay for “green” activities by somebody else instead of cleaning up their own emissions. The task force calls for more offsetting, with weaker rules, based on the theory that offsetting ought to contribute to emissions reductions or avoidance. Its report says that offsets are “providing jobs and lowering pollution loads for neighborin­g residents” — a dubious, undocument­ed claim.

Our largest greenhouse gas producers have been the main offsets users. Partly as a result, emissions from industrial facilities have increased since the program began. These major polluters are disproport­ionately located in low-income areas, damaging health and shortening lives.

The task force presents its proposals as a partial response to this environmen­tal injustice, one that will enable Native California­ns and other “disadvanta­ged” communitie­s to “participat­e”

in the offsets program. Yet the report fails to recognize that the majority of environmen­tal justice organizati­ons in California are opposed to offsets.

Astonishin­gly, the report asks the Air Resources Board to expand offsets without first evaluating the effects that it is having on frontline communitie­s. The ARB does not even know how much its rules for allowances, offsetting and vehicle-fuels are affecting emissions or yielding the benefits these policies are supposed to provide.

Most offsets exchange an immediate, certain climate bad (extra greenhouse gases) for a future, hoped-for climate good (such as storage of carbon in trees for the next 100 years or long-term continuati­on of activities to capture methane or bury carbon on farms). But there is substantia­l evidence that California’s forest-based and minemethan­e offsets are not storing nearly enough greenhouse gases to compensate for the extra emissions they allow.

The Air Resources Board appears determined to find “market

solutions” to climate change through allowance and offset trading. The board’s decision to assemble a panel that mainly comprises people with profession­al or financial interests in offsetting probably made its outcome predictabl­e, and is part of the reason why the environmen­tal-justice and NGO members appointed to the task force have resigned.

There are many reasons to promote forest conservati­on and climate-wise use of farmlands. There are reasons, too, to provide special support to indigenous, non-white and low-income communitie­s coping with climate change. If we are serious about environmen­tal justice and greenhouse gas reductions, we must address these goals directly — not treat them as hopefor side-effects of business decisions and the uncertaint­ies of the markets for offsets and allowances.

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