Climate's Sub-Prime Mortgages

Tue, 2008-05-20 10:18Ross Gelbspan
Ross Gelbspan's picture

Climate's Sub-Prime Mortgages

Carbon offsets — and emissions-trading schemes, their industrial-scale siblings — are the environmental version of subprime mortgages.

They both started from some admirable premises. Developing countries like China and India need to be recruited into the fight against greenhouse gases. And markets are a better mechanism for change than command and control. But when those big ideas collide with the real world, the result is hand-waving at best, outright scams at worst. Moreover, they give the illusion that something constructive is being done.

Comments

Your link bases its statement on a calculation by one Roger Pielke. Unfortunately, he is simply not a trustworthy source on climate information. See (among others) http://scienceblogs.com/deltoid/2008/05/pielke_train_wreck_continues.php for a pointer to the discussion of his utter incompetence.

Your concerns about offsets might be totally justified, but a calculation by Pielke simply doesn't provide us with any meaningful evidence either way.

Ross,
I agree that at worst carbon offsets are little more than a con, an 'indulgence' to make us feel better while the dirty habits continue unabated. CDMs as part of the Kyoto Protocol, if done well, can be a valid way to reduce emissions growth overall.

But despite any operational difficulties to date, emissions trading is absolutely not the equivalent of 'subprime' anything. A well designed ETS has the fundamentally sound premise of a known and constantly decreasing emissions cap. By limiting overall emissions, the trade in emissions permits serves to put a price on carbon, which at least should lead to a stimulation of alternatives and other non- or low-carbon technologies and system changes. In theory the price is the same as that of an emissions tax; ie, the marginal cost of abatement. The crucial difference is that an ETS sets a limit on emissions, not trying to trigger one through setting a tax rate. And carbon offsets will have a minor role, if any at all, to play in an ETS; the coming Australian one will not initially include them I believe.

ETS may not be perfect, and it can certainly be done wrong, but unless we think it likely to tear up the entire capitalist system, it's by far the best we've got. I would have thought the sulphur abatement ETS experience in the US at least demonstrated its potential.

Having typed all that I now see this is actually just quoting the article. So... do you agree with it or not??
And that article is hopelessly confusing CDM, carbon offsets (NOT the same thing!), and an ETS. (CFC production is a complex issue and the article looks to have it quite wrong.)

And ahh yes, Pielke. Such a bastion of rational and informed opinion on climate science or climate mitigation policy.

S0 Pielke is an authority now?

This is absolutely the sort of sloppy commentary I enjoy coming to this site to see called out - people with an agenda pumping up an 'authority' who happens to agree with them. As such, very disappointing to see it here.

Emissiosn trading can, does, and did work. Just look at acid rain. Offsets aren't even necessarily international, though if you have a better idea for getting China and India to do anything pipe up. Last time I checked, China was pretty content to keep building brown coal power plants.