“Carbon offsets are bullshit”: Cory Doctorow

“The theory behind carbon offsets is that markets created the climate emergency, so markets will solve it. It’s a kind of high-stakes denialism, like a lifelong smoker switching to ‘light’ cigarettes after learning they have stage four lung-cancer.”

That’s Cory Doctorow, a science fiction author, tech activist, and journalist.

Doctorow describes the market doctrine that leads to carbon offsets: Firms should maximise shareholder value, regardless of the costs imposed on everyone else. Corporate crime thus becomes the result of “poor incentives”. Oil spills, pollution, and injured workers are the result of cheap insurance, or fines that are set too low.

Doctorow writes that,

Rather than criminalizing the conduct that leads to these outcomes – shutting down companies that engage in the conduct, holding managers and shareholders personally liable for it – market doctrine insists that we should “rebalance the incentives.”

Enter carbon offsets: rather than prohibiting the pollution that will render our planet permanently uninhabitable by our species, we make that pollution economically disfavorable, by offering bribes to companies that promise not to pollute.

So, a logging company can promise to do something called “sustainable forest management” instead of just clearcutting the forest.

The company can sell carbon credits, and as long as the profits from carbon are higher than the profits from clearcutting, “the incentives net out in favor of not committing genocide,” as Doctorow puts it.

Big Polluters can buy the carbon credits and pretend to be addressing the climate crisis, while continuing to pollute.

A market for lemons

In a 1970 paper, the economist George Akerlof looks at how the quality of goods traded in a market can degrade when there is information asymmetry between buyers and sellers. Akerlof uses the second hand car market to illustrate the problem. Over time the information asymmetry leads to a market for “lemons” – a lemon being US slang for a car that turns out to have serious defects.

This is exactly the situation with carbon offsets. The sellers know whether their carbon offsets are bogus, but the buyers don’t. Larry Lohmann wrote about “lemons for sale” in his 2001 Briefing Paper, “Democracy or Carbocracy? Intellectual Corruption and the Future of the Climate Debate”.

In a post titled, “Carbon offsets are bullshit”, Doctorow quotes another economic principle, Gresham’s Law of 1860, that states that “bad money drives out good”. Cheap, easy to generate carbon credits will drive out expensive but genuine carbon removals.

An example of “bullshit” carbon offsets, Doctorow writes, are The Nature Conservancy’s fake forest offsets, as reported by Bloomberg Green in December 2020:

Doctorow writes that,

Offsets are the worst. Corrupt “charities” like Nature Conservancy make vast fortunes ($932m in 2019) helping the world’s worst polluters greenwash their fortunes by offering offsets for set-asides on lands that would never be logged anyway.

Good credits?

As an example of “good credits”, Doctorow refers to Stripe’s support of Climeworks AG’s direct air capture carbon sequestration at US$775 per ton.

Direct air capture plants do genuinely remove carbon from the atmosphere and permanently store it. But direct air capture requires huge amounts of energy, particularly if it is employed on a large enough scale to significantly reduce the amount of CO₂ in the atmosphere. And there is no guarantee that scaling up the technology is feasible in the short time span remaining to address the climate crisis.

Direct air capture plants do not provide an excuse for business as usual. Despite the fact that they are currently operating at a tiny scale, these, and other, “negative emission technologies” are used to avoid politically difficult decisions to dramatically reduce emissions from burning fossil fuels today.

Similarly, carbon offsets are not a means of reducing emissions. The purpose of carbon offsets is to allow the fossil fuel economy to continue business as usual for as long as possible.

Offsets, Doctorow writes, cannot be “fixed”:

Everything we do to fix offsets just makes them worse: adding complexity to a loophole-riddled system creates more loopholes.

---