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[GreenYes] Re: Recycle Offset Credits - Benefits of a market


Title: [GreenYes] Re: Recycle Offset Credits - Benefits of a market

Hi all,

It is an interesting thread indeed. A few more points:

- On Doug's point below about creating a decentralized enforcement
mechanism: my impression is that offset credits have already created a
set of firms whose interest lies in maximizing the number of credits
available -- not really ensuring that they represent real changes in
emissions.

- There are a lot of different policy options to control GHG emissions;
many groups favor command-and-control (mandating certain technology);
others favor carbon taxes, others favor capping. Even within these
general rubrics, there are variations:

        one can cap emissions without allowing trading (require firms to keep
their emissions under a certain level);

        or have caps and allow trading but not allow offset credits; (this
allows firms to cut their emissions below their mandated level and sell
the "savings" in the form of credits to other firms);

        or allow cap-and-trade with offset credits (where firms can effectively
increase the pool of credits available by taking GHGs out of the
atmosphere).

It is this last option that I find the most problematic, because the
offset credits are used to punch a hole in the bottom of the bucket, so
to speak. As Doug illustrates in his last point, offset credits are
generally based on some kind of "business as usual" scenario -- if we
don't compost the kitchen waste, it will go to a landfill and create X
tons of methane. So we get credits for not having done something bad in
the first place. One problem here is that "business as usual" is highly
interpretive, and very subject to manipulation. The second problem is
that it essentially creates a floor below which total emissions can't be
forced (because any innovation to further lower emissions will be
eligible for credits, which will be sold to someone else who uses those
credits by emitting more). But now it's a very large business and
there's a lot of financial incentive to keep these programs going.

If, on the other hand, we made raw material extraction pay for its true
GHG emissions, that would significantly raise the price of raw
materials, thus making recycling an even more attractive option.

To get back to Curt's question, I think this shows the limits of
individual action. Even if everyone in the US were as dedicated and
conscientious as he is, we still couldn't make reasonable individual
choices to bring down our carbon footprint to anything like what is
needed to stabilize the climate. Consumer choice, while important, is
simply insufficient. We have a system -- a physical infrastructure, an
economy and a political system -- that is geared towards
unsustainability. We therefore need a collective response to change the
system, not only an individual one. Fortunately, we do have a tool that
is capable of creating profound, long-term technological and economic
system changes: the government. Unfortunately, the government is in the
hands of the wrong people. But I honestly don't think that we can hope
to address the climate problem without political action.

best,

Neil



Doug Koplow wrote:
> Interesting thread.  Couple of additional thoughts.  Caps and carbon
> taxes do two other things that I've not seen mentioned:

> -First, by creating an economic value on carbon emissions, they create
> classes of firms that benefit from those emissions being properly
> regulated.  This group of firms serves as a decentralized enforcement
> mechanism that can help improve compliance with a centrally-established
> cap.

> -Second, the price signal doesn't merely move emissions reductions to
> where they are cheapest, but also establishes a strong financial
> incentive for innovation in the way we do things that emit carbon.  Over
> the longer-term, it is this incentive to innovate that offers hope that
> whatever cap is set now can be reduced over time, and/or the cost to
> comply with any specific cap will decline.

> -Neil's point about serious concerns on the tightness of the carbon
> system is also true and very important.  Where trading involves
> countries that lack even basic government control systems, the risks of
> corruption and gaming are quite high.  Even in developed countries, the
> initial rules for allocating carbon permits matter immensely.  An
> assessment done by Friends of the Earth of existing proposals estimates
> that recently proposed climate legislation would have
> generated windfalls to selected industries in the hundreds of billions
> of dollars (permit auctions would solve this).  Finally, credit systems
> have a tough time hitting all sectors of the economy equally.  They can
> pick up large industries and power plants, but don't do well on smaller
> industries or mobile sources such as the transport sector.  Carbon taxes
> have a strong advantage here.  Carbon taxes also offer a great benefit
> in being able to reduce more distortionary taxes concurrently, such as
> those on labor.

> -Also on Neil's point, controlling methane releases from US landfills is
> an allowable source of carbon offset on the Chicago Exchange (and also
> constitute eligible green power sources under many RPS rules).  In
> reality, of course, landfills are a potent GHG emitter, and should be
> forced to purchase permits for all emissions.  This would send the
> desired price signal to (a) properly control emissions at landfills
> without government subsidy; and (b) manage wastes in more
> carbon-efficient ways (better recycling perhaps?).  Instead, allowing
> credits for the portion of methane they capture rather than let escape
> reduces the cost of landfilling relative to recycling, and, according to
> Peter Anderson, misses a large portion of the lifecycle methane
> emissions from the landfill.
> -Doug Koplow

> _______________________________
> Doug Koplow
> Earth Track, Inc.
> 2067 Massachusetts Avenue - 4th Floor
> Cambridge, MA  02140
> www.earthtrack.net
> Tel:  617/661-4700
> Fax: 617/354-0463
>
>            CONFIDENTIAL
> This message, and all attachments thereto, is for the designated recipient
> only and may contain privileged, proprietary, or otherwise private
> information.  If you have received it in error, please notify the sender
> immediately and delete the original.  Any other use of the email by you
> is prohibited.
>
>  >>> <daklute@no.address> 6/30/2008 4:56 PM >>>
>
> Neil,
>
> Thanks for this:
>
> Sorry to reply in two emails -- I hit send prematurely. My point is
> basically this: carbon credits do nothing to reduce emissions per se,
> nor are they designed to. They turn GHG reductions into a form of
> currency, which can then be moved around. The idea behind carbon
> credits is that whatever emissions reductions are going to be made can
> be made more CHEAPLY by bringing a market function into play. But it's
> the cap, or other emissions control measures, that actually reduce
> emissions.
>
> as your initial post seemed pretty non-responsive.
>
> Yes, credits need caps to be effective. I would agree that
> cap-and-trade systems are an insufficient response to the climate
> challenge.
>
> But, your attempt to somehow seperate the credits from the cap makes
> me wondering just what it is your critiquing.
>
> On 6/30/08, Curt McNamara <mcnam025@no.address> wrote:
>  > To go back to my argument: How does Curt McNamara, Inc. (or Neil
>  > Tangri, Inc.) balance our emissions without credits?
>  >
>  > Yes they are imperfect. Yes folks will take advantage of them. Yes I
>  > can imagine a world where there is something better.
>  >
>  > What we teach our students: there is no perfect company, no perfect
>  > product. In many ways working for the worst company is the best idea
>  > because your efforts will have the largest results. "We got here with
>  > a million little bad decisions, we will get out with a million little
>  > better decisions."
>  >
>  > As a consumer I can shop around to find credits with the best
>  > backstory. Every year I can upgrade / change to whoever is doing the
>  > best job. Today the best companies are third party certified.  They
>  > are not perfect, yet they are improving and I don't have a better
>  > answer.
>  >
>  > Curt
>  >
>  >
>  > On Jun 30, 2008, at 2:56 PM, Neil Tangri wrote:
>  >
>  >> Hi folks,
>  >>
>  >> Thanks for your thoughts. It's good to have a measured conversation
>  >> about this.
>  >>
>  >> On the issue of "increasing":  If the company didn't have access to
>  >> carbon credits, it would have to reduce its actual emissions
>  >> further. In effect, the company is increasing its emissions over its
>  >> cap and then paying for the difference with carbon credits. Carbon
>  >> credit fans like to argue that it makes no difference: sticking to a
>  >> cap with or without credits emits the same GHGs. But that is only
>  >> true if the carbon credit system is airtight (forgive the pun).
>  >> Experience demonstrates that there are lots of projects generating
>  >> credits that shouldn't, or in fact have negative consequences for
>  >> the climate (not to mention other environmental issues).
>  >>
>  >> all the best,
>  >>
>  >> Neil
>  >>
>  >>
>  >>
>  >> daklute@no.address wrote:
>  >>> I disagree also.
>  >>> Neil's statement: when you accept carbon credit financing, you are
>  >>> essentially selling your saved emissions to someone else who is
>  >>> going to
>  >>> increase their emissions by the same amount.
>  >>> I work with companies that have developed and live by carbon caps.
>  >>> They use credits to remain at or under their caps, NOT to "increase"
>  >>> their emissions.
>  >>> We know what the carrying-capacity for carbon is projected at.
>  >>> Decrying off-set credits as a "pyramid scheme" when they are an
>  >>> intregal part of the efforts to reduce the overall carbon output
>  >>> seems
>  >>> short-sighted - at best.
>  >>> On 6/30/08, Curt McNamara <mcnam025@no.address> wrote:
>  >>>> I disagree with your assessment. In my case (and my students)
>  >>>> there is
>  >>>> nothing practical to do to get us to one earth. The only piece
>  >>>> left is
>  >>>> to buy offsets as far as I can tell. Would be glad to hear of other
>  >>>> approaches!
>  >>>>
>  >>>> Lifestyle summary:
>  >>>> Eat low on pyramid (vegan or close), local food. Shared housing. All
>  >>>> practical energy improvements in housing. Pay for green energy
>  >>>> (wind).
>  >>>> Bike everywhere. Car miles ~2K/year. Limited air travel (teaching).
>  >>>> Can get to ~1.75 earths.
>  >>>>
>  >>>> http://www.myfootprint.org/en/
>  >>>>
>  >>>> Curt
>  >>>>
>  >>>> On Jun 30, 2008, at 1:06 PM, Neil Tangri wrote:
>  >>>>
>  >>>>> Hi all,
>  >>>>>
>  >>>>> Your points about a pyramid scheme and various other flaws in the
>  >>>>> carbon
>  >>>>> credit process are important. But there is an even deeper flaw in
>  >>>>> the
>  >>>>> whole scheme: when you accept carbon credit financing, you are
>  >>>>> essentially selling your saved emissions to someone else who is
>  >>>>> going to
>  >>>>> increase their emissions by the same amount. So it is a trade
>  >>>>> off: you
>  >>>>> can avoid emissions (for example, by recycling), or you can get
>  >>>>> paid
>  >>>>> for
>  >>>>> those emissions, and have no net gain to the climate.
>  >>>>>
>  >>>>> cheers,
>  >>>>>
>  >>>>> Neil
>  >>>>>
>  >>>>>
>  >>>>>
>  >>>>> retroworks wrote:
>  >>>>>> I met Paul Roszel in Chicago at the WR3A sponosored Recycling
>  >>>>>> Today
>  >>>>>> electronics conference (great turnout by the way).  In my opinion
>  >>>>>> there may be no better advocate and expert on recycling in North
>  >>>>>> America than Paul.  What he wants to do with the credits is to
>  >>>>>> reposition recycling in the environmental discourse.
>  >>>>>>
>  >>>>>> I spoke frankly with him about the 'greenwashing' potential of
>  >>>>>> all of
>  >>>>>> these credits (as Mary Lou Van Deventer aptly describes some of
>  >>>>>> these
>  >>>>>> 'campaigns').  I have suspicions that the carbon offset credits
>  >>>>>> could
>  >>>>>> be a 'pyramid scheme'... imagine the same gas guzzler being sold
>  >>>>>> from
>  >>>>>> company to company, traded every week, each company using it,
>  >>>>>> registering their footprint while they have it, and then selling
>  >>>>>> it
>  >>>>>> to
>  >>>>>> the next company, and claiming a greenhouse gas reduction.
>  >>>>>> That's an
>  >>>>>> oversimplified exaggeration, but when 99% of companies are not yet
>  >>>>>> registered, it does seem to me that any company rich enough to
>  >>>>>> upgrade
>  >>>>>> their trucks will look greener than any company buying the used
>  >>>>>> truck...
>  >>>>>>
>  >>>>>> Anyway, in regards to Recycling Offset Credits, I would trust
>  >>>>>> RecycleNet to be very open to setting rules on the system which
>  >>>>>> did
>  >>>>>> not encourage abuse or greenwashing.   Paul was able to
>  >>>>>> intelligently
>  >>>>>> discuss the potential 'poster child fatigue" of environmental
>  >>>>>> campaigns.  He is capable of discussing even the diminishing
>  >>>>>> returns
>  >>>>>> of 'zero waste' (where I have sacreligiously suggested that the
>  >>>>>> very
>  >>>>>> last item recycled, like a can from an island or from the bottom
>  >>>>>> of
>  >>>>>> the ocean, will be inefficient and do environmental harm).
>  >>>>>> RecycleNet's goal is to keep RECYCLING as a relevant activity as
>  >>>>>> 'green' activities (so labelled - did you know there is a green
>  >>>>>> credit
>  >>>>>> card?) gobble up more space on the daily news.
>  >>>>>>
>  >>>>>> I would encourage RecycleNet to continue with this, because the
>  >>>>>> current media appetite for consumable environmental headlines is a
>  >>>>>> given and if he doesn't put Recycling Credits out there, some
>  >>>>>> other
>  >>>>>> even less worthy environmental 'issue' could take our place.
>  >>>>>> As the
>  >>>>>> Grateful Dead sang, "might as well be me".
>  >>>>>>
>  >>>>>> On Jun 19, 3:08 pm, Mary Lou Van Deventer <marylou...@no.address>
>  >>>>>> wrote:
>  >>>>>>> At Urban Ore, one of our managers is investigating this carbon-
>  >>>>>>> offset
>  >>>>>>> idea for our company.  Our attorney just asked me if the
>  >>>>>>> manager is
>  >>>>>>> head of the Greenwashing Department.  We're kind of ambivalent
>  >>>>>>> about it.
>  >>>>>>>
>  >>>>>>> Mary Lou Van Deventer
>  >>>>>>> Urban Ore
>  >>>>>>> 900 Murray St.
>  >>>>>>> Berkeley, CA 94710
>  >>>>>>> marylou...@no.address
>  >>>>>>>
>  >>>>>>> On Jun 19, 2008, at 12:00 PM, Jewell, Rebecca wrote:
>  >>>>>>>
>  >>>>>>>
>  >>>>>>>
>  >>>>>>>>
> http://www.foxbusiness.com/story/markets/industries/technology/recycl
>  >>>>>>>> ...
>  >>>>>>>> SALT LAKE CITY, UTAH, Jun 19, 2008 (MARKET WIRE via COMTEX) ----
>  >>>>>>>> Paul
>  >>>>>>>> Roszel, Chairman of RecycleNet Corporation (OTCBB: GARM)is
>  >>>>>>>> pleased
>  >>>>>>>> to introduce the Recycling Offset Credit (ROCs) program. This
>  >>>>>>>> program provides a certified measurement system to recognize and
>  >>>>>>>> reward companies for their recycling efforts. RecycleNet will
>  >>>>>>>> issue/
>  >>>>>>>> award Recycling Offset Credits (ROCs) for each ton of material
>  >>>>>>>> recycled by participants.
>  >>>>>>>> As a result of the increased awareness of climate change and
>  >>>>>>>> global
>  >>>>>>>> warming, more and more people have become concerned about
>  >>>>>>>> greenhouse
>  >>>>>>>> gas emissions and are developing strategies to reduce their
>  >>>>>>>> carbon
>  >>>>>>>> footprint. Many companies, individuals and institutions have
>  >>>>>>>> implemented carbon neutral goals.
>  >>>>>>>> The Recycling Offset Credits (ROCs) program is an effort to
>  >>>>>>>> provide
>  >>>>>>>> a universally recognized standard to measure and certify
>  >>>>>>>> recycling
>  >>>>>>>> efforts and to demonstrate the economic impact of the recycling
>  >>>>>>>> industry. Recycling Offset Credits (ROCs) may be used to
>  >>>>>>>> calculate
>  >>>>>>>> an equivalent offset of your carbon footprint.
>  >>>>>>>> RecycleNet Corporation invites any company, institution or
>  >>>>>>>> organization to participate in the voluntary ROCs program by
>  >>>>>>>> reporting materials recycled. There is no fee to participate and
>  >>>>>>>> the
>  >>>>>>>> program is open and applicable to anyone in all stages of the
>  >>>>>>>> recycling/reverse distribution supply chain.
>  >>>>>>>> For more information and to participate in the Recycling Offset
>  >>>>>>>> Credits program please visitwww.recycle.net/offsetcredits.
>  >>>>>>>> About RecycleNet
>  >>>>>>>> RecycleNet operates The Online Secondary Commodities Exchange.
>  >>>>>>>> Founded in 1995, RecycleNet created a powerful platform to
>  >>>>>>>> facilitate the international trade of secondary commodities.
>  >>>>>>>> RecycleNet Corporation enables trade on a local, national and
>  >>>>>>>> international basis with customized sites locating markets
>  >>>>>>>> around
>  >>>>>>>> the world in many different commodities. On any given day, there
>  >>>>>>>> are
>  >>>>>>>> in excess of $200 million in new items listed within our
>  >>>>>>>> exchanges.
>  >>>>>>>> Rebecca Jewell
>  >>>>>>>> Recycling Programs Manager
>  >>>>>>>> Davis Street Station for Material Recycling & Transfer
>  >>>>>>>> A Waste Management company
>  >>>>>>>> 510-563-4214
>  >>>>>>>> Fun Fact: Waste Management recycled more than 5 million tons of
>  >>>>>>>> commodities last year; preventing the release of more than 3.4
>  >>>>>>>> million metric tons of greenhouse gas emissions.
>  >>>>>>
>  >>>>>
>  >>>>>
>  >>>>
>  >>> >>
>  >>
>  >>
>  >
>  >
>
> >



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