Congress, carbon and the Chicago Climate Exchange -- this time it's our money
Stephanie Hayes Richards, an independent consultant, and Kenneth Richards, an associate professor in Energy and Environmental Law and Policy at the Indiana University School of Public and Environmental Affairs, are the authors of this column, which was originally published in the Times of Northwest Indiana.
The U.S. House of Representatives' intention to become "carbon neutral" under its Green the Capitol Initiative represents an admirable endeavor. But if House leaders intend this to be more than a religious exercise, they need to think carefully about their plan to partner with the Chicago Climate Exchange -- and to remember that, when spending the public's money, being transparent is as important as being green.
More importantly, if Speaker Nancy Pelosi and Majority Leader Steny Hoyer pay attention to the issues that arise with the initiative, they just might learn something about the challenges involved in designing a national climate change program.
The Green the Capitol Initiative is intended to transform the House into a model for sustainable behavior. Plans call for House management to work with its energy service provider to ensure that 100 percent of the House's electricity comes from renewable energy sources and to convert the Capitol Power Plant from coal to natural gas. These two changes alone would reduce the House complex's annual CO2 emissions by more than 60,000 tons from its current level of 91,000 tons.
But the fly in the ointment is that remaining tonnage of CO2. The House decided to deal with those emissions by purchasing carbon offsets on the Chicago Climate Exchange (CCX). The carbon offset concept has been kicking around for many years. It means that a firm, organization, or even a concerned individual who emits carbon can pay someone else to reduce emissions or capture carbon.
Some observers have likened voluntary carbon offsets to the Roman Catholic Church's 16th century practice of selling indulgences -- if you can afford the price, your environmental "sins" are canceled. But the analogy may be inapt. An offset is not just asking for forgiveness, assuaging an organization's guilt for carbon emissions. It is supposed to make environmental restitution, resulting in genuine environmental improvements.
That's why Congress should be all the more careful that its offsets are real, because they are being paid for with our money.
In some ways the Chicago Climate Exchange is the natural place for Congress to turn for offsets. The carbon registry and trading system asks members to make voluntary but legally binding commitments to reduce their net emissions. CCX also provides a trading market through which members who are unable to meet their emissions reduction targets can buy credits from those who exceeded their targets. It is a great concept.
But there are two serious problems. The first is that the trading system is not transparent to the public. In a July 2006 New York Times Magazine article, Jeff Goodell tells the story of a happy Omaha farmer who started receiving payments through CCX in 2005 for his no-till farming practices, which have lower carbon emissions than traditional practices. The problem is that the farmer had been doing no-till farming for 14 years. Clearly this was just post hoc credit claiming. Similar stories have been told about coal mine methane projects, plant closings, and some renewable energy projects.
When questioned about issues such as baseline carbon dioxide emissions and carbon calculations, CCX officials have been elusive or dismissive. Requests for copies of the offset evaluation manual have gone unanswered. And while the CCX does employ a "third party verifier," a kind of carbon accountant, the rules by which projects are evaluated are not made public.
Perhaps this is why numerous key players in the environmental movement have been skeptical of the organization's real impact on CO2 emissions. Nonprofits like the Natural Resources Defense Council and the Nature Conservancy and companies like BP have maintained their distance from CCX.
While the amount of money the House will spend each year on carbon offsets is relatively small -- in November, it purchased 30,000 tons of carbon offsets for about $90,000 -- the truly serious problem is that by participating in the CCX program, Congress may learn a false lesson: that effective offset systems are easy. They are not. Moreover, Congress's involvement in CCX is a tacit endorsement of a system that has not invited broad scrutiny.
If Congress is going to work with CCX, it should at least nudge the trading organization to open its processes and practices to public view. That would be the next natural step for a maturing organization. After all, one of the primary motivations for involvement in CCX is the public relations benefits.
What could be better than inviting the public, or its representatives, to examine how the system works rather than taking it on faith?
Representatives Pelosi and Hoyer and their colleagues should also make sure they learn the real lesson: that designing an effective offset system is complex -- whether for a voluntary program or as a component of a national climate change policy. It takes careful planning, attention to detail, and should only be attempted in broad daylight.
