Environmental Groups Urge Waxman/Markey to Close the Floodgate on Carbon Offsets

A coalition of environmental and social justice organisations delivered a letter yesterday (23 April 2009) to the offices of Representatives Henry Waxman (D-CA) and Ed Markey (D-MA) warning that the inclusion of offsets in the “American Clean Energy and Security Act 2009” would create a giant loophole allowing US emissions to increase until 2026.

Last week, a report from International Rivers and Rainforest Action Network criticised the inclusion of offsets in the Waxman-Markey bill: “Unfortunately the ‘firm’ caps exist only on paper. In reality, the caps will be blown to pieces by allowing polluters to meet their emission reduction responsibilities through buying offset credits rather than reducing their emissions.”

The letter urges Waxman and Markey to:

1. Take the lead on strong action on climate change at home by opposing any international carbon offsets, including forest offsets, as part of any compliance regime on climate change; and

2. Ensure that the domestic offset market does not become part of a compliance system to regulate emissions.

The press release and the sign on statement are reproduced in full, below.

Coalition: Offsets in Climate Change Bill Undermine Clean Energy, Green Jobs
Environmental Groups Urge Waxman/Markey to Close the Floodgate on Carbon Offsets

PRESS RELEASE, 23 April 2009

350.org, 1 Sky, California Communities Against Toxics, Chesapeake Climate Action Network, Church World Service, Eco-Justice Collaborative, Energy Justice Network, Environmental Justice and Climate Change Initiative, Essential Action, Friends Committee on National Legislation, Friends of the Earth, Greenaction for Health and Environmental Justice, Greenpeace, Little Village Environmental Justice Organization, Indigenous Environmental Network, Institute for Energy & Environmental Research, International Rivers, Maryknoll Office for Global Concerns, Nuclear Energy Information Service, Nuclear Information and Resource Service, Public Citizen, Rainforest Action Network, Safe & Green Campaign, Shalom Center, Sustainable Energy & Economy Network, Unitarian Universalist Association of Congregations

A coalition of environmental and social justice groups delivered a sign-on statement today to the offices of Representatives Henry Waxman (D-CA) and Ed Markey (D-MA), which warns that a giant loophole in the climate and energy bill the lawmakers authored could actually result in an increase in U.S. greenhouse gas emissions until 2026. The offset provisions in the “American Clean Energy and Security Act 2009” allows U.S. polluters to exceed the federal emissions cap by up to 2 billion tons of carbon dioxide each year by buying offset credits. Two billion tons of carbon dioxide is about 30 percent of annual U.S. emissions; this amount would create the world’s largest single market for carbon offsets.

“While the U.S. needs to help developing countries invest in a clean energy future and adapt to climate change, the international carbon offsets market is not the appropriate vehicle for this,” said Daphne Wysham, a fellow at the Institute for Policy Studies in Washington, DC. “We urge Congress to renegotiate the bill by enacting strong domestic climate legislation that excludes offsets, thereby ensuring true emission reductions.”

“At a time when we need to both ensure our energy independence and solve the problem of climate change, this bill would increase the pollution burden on poor communities instead of bringing them green jobs,” said Jane Williams, director of California Communities Against Toxics.

The draft bill allows one billion offsets each year to come from developing countries and one billion from domestic sources. Almost all offsets from developing countries currently come from the Kyoto Protocol’s Clean Development Mechanism (CDM). The CDM and other carbon offsets have been strongly criticized by many analysts, including the U.S. Government Accountability Office, for generating large amounts of carbon credits which do not represent real reductions in emissions. Many projects, such as hundreds of large hydropower dams in China, would have been built regardless of receiving offset income.

“It is very likely that most CDM offsets are from business-as-usual projects. Because they do not represent emission reductions, most carbon offsets are junk ‘subprime carbon’ that allow big polluters to avoid cutting their emissions while tricking the public into believing that action is being taken,” according to Patrick McCully, executive director of International Rivers.

“All our hard work around recycling waste in Bali is threatened by offset credits,” says Yuyun Ismawati, a recent winner of the prestigious Goldman Environmental Prize. “The credits are backing a landfill gas system, and the local environment agency has told me that we need to shut down our recycling operation in order to send more waste to the landfill to generate CDM credits. This will not only throw people out of work and increase toxic emissions, it will greatly increase greenhouse gas releases to the atmosphere.”

Although offset credits are supposed to represent real emissions reductions, the rules and enforcement are so lax that they often do not. Offsets effectively raise the emissions cap, undermining the very purpose of a climate change law. The Waxman-Markey draft proposes to create a regulatory structure for U.S. offsets similar to one that has failed to stop cheating and harmful projects under the CDM. International emissions offsets are fraught with corruption.

By allowing 2 billion tons in carbon offsets, the bill would create the world’s largest single market for carbon offsets.

For more than four decades, the Institute for Policy Studies has transformed ideas into action for peace, justice, and the environment. It is a progressive multi-issue think tank.

International Rivers’ mission is to protect rivers and defend the rights of communities that depend on them.

California Communities Against Toxics is one of the oldest and most successful environmental justice networks in the country, and advocates for environmental justice, pollution prevention.

The Goldman Prize annually honors grassroots environmental heroes from the six inhabited continental regions: Africa, Asia, Europe, Islands and Island Nations, North America, and South and Central America. The Prize recognizes individuals for sustained and significant efforts to protect and enhance the natural environment, often at great personal risk. Each winner receives an award of $150,000, the largest award in the world for grassroots environmentalists.

Coalition Sign-on Statement

April 23, 2009

The Honorable Henry Waxman
Chair, Committee on Energy and Commerce

The Honorable Edward Markey
Chair, Subcommittee on Energy and Environment

Dear Chairmen Waxman and Markey,

We commend you on the effort you have undertaken in crafting your draft “American Clean Energy & Security Act of 2009.” While there is much to applaud in this bill, there are also areas for substantial improvement. While we will be communicating to you separately with respect to other issues, our organizations are concerned in particular about one key element that threatens to undermine its integrity and effectiveness in addressing climate change: the large carbon offsets provisions of the draft bill. As pointed out in recent testimony before your Energy and Environment Subcommittee by the Government Accountability Office,¹ quality assurance for carbon offsets is all but impossible to verify. To craft a bill that allows for 2 billion tons of offsets per year – roughly equivalent to 27% of 2007 U.S. greenhouse gas emissions – is to allow for continued and dangerous delay in real action by our country at a time when the world is looking to the U.S. for leadership on climate change.

Initial calculations suggest that allowing for 2 billion tons of offsets per year would mean that covered entities in the U.S. could use offsets to avoid curtailing their own significant greenhouse gas emissions until 2026.² Given current climate science³, such a delay in investing directly in new low-carbon energy infrastructure is unacceptable.

Increasing evidence is revealing the Clean Development Mechanism (CDM), the world’s biggest carbon offset market, is failing to deliver real climate or sustainable development benefits.⁴ Most fundamentally, the CDM has actually facilitated an increase in overall greenhouse gas emissions – undermining the most fundamental and critical goal of all – stemming the growth of greenhouse gas emissions in the Earth’s atmosphere.

The draft bill intends to reduce emissions from tropical deforestation via two contrasting approaches. The first, called Supplemental Emissions Reductions from Reduced Deforestation, is a fund-based approach with the aim of slowing tropical deforestation emissions by at least 720 million tons per year by 2020. The fund approach as written into the draft bill could enable effective policies, activities and measures to slow tropical deforestation, which unfortunately would be undone through the second approach based on bringing hundreds of millions of tons of international forestry offsets into the U.S. carbon market each year.

Forest offsets as proposed in the draft bill fail to acknowledge forest governance problems, as well as the customary land and forest rights of Indigenous peoples including the rights of free, prior and informed consent of Indigenous peoples in forest regions to participate, or choose not to participate, in the new carbon commodity market. Forest credits have a well-recognized potential to destabilize carbon markets by introducing large volumes of cheap offsets, huge variations in estimates of carbon stocks and fluxes over time, and uncertainties over how to monitor emissions and the impacts of policies upon rates of deforestation and emissions.

Domestically, environmental justice organizations and activists are equally concerned that all offsets – whether in criteria pollutants or in carbon – will add to the pollution burden of already overburdened communities of color while increasing incentives for corruption.

As the United States moves forward on domestic climate legislation, we urge you to ensure that your basic reduction targets for greenhouse gases and other agents, such as black soot⁵ are bold enough and achieved quickly enough to keep global temperature rise well below 2 degrees Celsius. We urge you to:

1. Take the lead on strong action on climate change at home by opposing any international carbon offsets, including forest offsets, as part of any compliance regime on climate change; and

2. Ensure that the domestic offset market does not become part of a compliance system to regulate emissions.

Signed,

Adam G. Gerhardstein, Unitarian Universalist Association of Congregations
Brent Blackwelder, Friends of the Earth
Bradley Angel, Greenaction for Health and Environmental Justice
Carroll Muffett, Greenpeace USA
Chad Simmons, Safe & Green Campaign
Daphne Wysham, Sustainable Energy & Economy Network
David A. Kraft, Nuclear Energy Information Service
Devin Helfrich, Friends Committee on National Legislation
Dr. Arjun Makhijani, Institute for Energy & Environmental Research
Gillian Caldwell, 1 Sky
Jane Williams, California Communities Against Toxics
Kimberly Wasserman, Little Village Environmental Justice Organization
Marie Dennis, Director, Maryknoll Office for Global Concerns
May Boeve, 350.org
Michael Brune, Rainforest Action Network
Michael Mariotte, Nuclear Information and Resource Service
Mike Ewall, Energy Justice Network
Mike Tidwell, Chesapeake Climate Action Network
Nia Robinson, Environmental Justice Climate Change Initiative
Neil Tangri, Global Anti-Incinerator Alliance
Pam and Lan Richart, Eco-Justice Collaborative
Patrick McCully, International Rivers
Rabbi Arthur Waskow, Shalom Center
Rajya Waghray, Church World Service
Robert Weissman, Essential Action
Tom Goldtooth, Indigenous Environmental Network
Tyson Slocum, Public Citizen

1. “Observations on the Potential Role of Carbon Offsets in Climate Change Legislation,” Statement of John Stephenson, Director, Natural Resources & Environment, before the Subcommittee on Energy and Environment, March 5, 2009.

2. Analysis of the offsets provision in the American Clean Energy and Security Act from International Rivers and Rainforest Action Network.

3. E.g., Hansen, J., Mki. Sato, P. Kharecha, D. Beerling, R. Berner, V. Masson-Delmotte, M. Pagani, M. Raymo, D.L. Royer, and J.C. Zachos, 2008: Target atmospheric CO2: Where should humanity aim? Open Atmos. Sci. J., 2, 217-231, doi:10.2174/1874282300802010217; and recent measures of glacial and polar ice melting rates, such as: “Satellites Show Arctic Literally on Thin Ice“, NASA, 6 April 2009.

4. Carbon Offsets: The U.S. Voluntary Market Is Growing, but Quality Assurance Poses Challenges for Market Participants, (Washington, D.C.: August 29, 2008), and International Climate Change Programs: Lessons Learned from the European Union’s Emissions Trading Scheme and the Kyoto Protocol’s Clean Development Mechanism, GAAO-09-151 (Washington, D.C.: Nov. 18, 2008).

5. Elisabeth Rosenthal, “Third-World Stove Soot Is Target in Climate Fight“, New York Times, 15 April 2009.