Thursday, March 15, 2007

Carbon Offsets: sin or salvation?

Neither of course, but wait for it, I will get there.

Tom Papworth has been writing about carbon offsets, and issue of cap-and-trade versus carbon taxes.

As I have said here before, there is nothing wrong with the principle of offsetting carbon emissions, it is just as good or bad to cause a net emission of a tonne of carbon one way as another. It is quite absurd to suggest that emitting a tonne of carbon here is so irredeemably sinful, that it can't be redeemed by saving a tonne of carbon somewhere else. It is not like offsetting infidelity.

The practise of course is much murkier. The world can't be divided into segments such that each of use is solely responsible for one of them. Tom quotes the economist blog suggesting that "rebound effects" will undo some of the good of offsets spent on wind power. I think this objection is overstated - I would agree with comment 2 on that blog - and, perhaps more to the point, I don't imagine offsetting to be a very precise science in the first place.

Because as I have argued, carbon emissions are bad but not sinful, it follows that offsetting is good but not obligatory - it is superogatory to use the technical term. It is much like making a charitable donation. And of course this means it should compete for attention with other charities, and probably fail. But it does mean that we should be glad that our donation is doing some good, and not worry whether a "rebound effect" is trimming a few percent off. Of course if the rebound effect were big enough to cost most of the benefit, that would be much like the hypothetical charity that spend most of its income on administration - we would look for another charity.

Of course to be brutally frank, I don't think global warming is going to be solved by having a few motivated people make effectively charitable contributions towards offset schemes. I bring the subject up on a political blog because I think that some political action is merited.

Green taxes of course are one such measure, but I don't think they can be made high enough to do the whole job for a couple of reasons:
  • demand for energy is not particularly elastic so the levels of tax would have to be very high to have big effects
  • hardship would result for many people on low incomes - it is important that these people are helped, through for example, being the focus of the tax cuts paid for by the green taxes; but I admit this help won't be perfect
  • there is the problem of competitiveness if domestic production is taxed and imports aren't; applying special taxes to imports to compensate for some (perceived) domestic disadvantage is the sort of thing that upsets trade wonks terribly. But it would need to be done if the effect of the policy isn't simply to be the offshoring of production and therefore of carbon emissions.
So, actually, Tom, as well as green taxes, a bit of "pork" poured into green energy is just what I would like to see. The technology works, and if it can be made cost competitive the market will do the rest. And, once the technology is competitive, or nearly so, international agreements on reducing carbon emissions will be much easier to reach.

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