The new series of articles by Carbon Brief regarding carbon offsets is an impressive amount of work. My "only" quibble is that they never discuss WHY carbon offsets are legitimately so hard to get right. As Einstein said, "If I had an hour to solve a problem, I'd spend 55 minutes understanding the problem." We would be well served to follow that advice -- but we don't.
Here are 3 primary issues that I see:
- 1Offsets are an intangible commodity that cannot be empirically observed or measured. There is no way to ever be certain whether any given ton of avoided or removed emissions is a legitimate offset; all one can be is more or less confident. Why is this so critical? Imagine designing a pregnancy test kit without knowing whether any given woman was actually pregnant?
- 2Given #1, evaluating carbon offsets is an example of statistical hypothesis testing. In hypothesis testing, the number of “false positives” (tons that should have been excluded but were not), and “false negatives” (tons that should have been included but were not) are by definition inversely related and must be consciously balanced. This comes down to the relative priority of cost-containment (which favors minimizing false negatives) vs. environmental integrity (which favors minimizing false positives).
- 3In the face of #2, it is inevitable that carbon offset market rules will be gamed in order to reduce business risks and enhance profits. Why? Because creating and maintaining legitimate carbon offset projects is hard, usually entails considerable costs, and creates business risk. What if no one wants to buy the offsets you’ve spent a lot of money bringing to market? The most obvious way to manage such risk is get projects approved as offsets that don’t fully deliver with respect to additionality, permanence, and/or leakage. The more “business as usual, temporary, or leaky” a reduction or removal, the lower the business risk of bringing that ton to market as an offset, and in many cases the greater the potential for profits. Gaming is inevitable, and if you don't want gamed tons to overwhelm legitimate tons you have to address and counter potential gaming in the ways the rules are written.t
These three points are key to understanding the legitimate challenges posed by carbon offsets. Yet discussion of any of these points is rare. When is the last time you heard of offsets discussed in the context of false positives, false negatives, and hypothesis testing?
If you are interested in such a discussion, we did just that in this 2006 paper, A Statistically Driven Approach to Offset-Based GHG Additionality Determinations: What Can We Learn?
The link takes you to our climate change resource tool, the Climate Web, where we have the article and other resources connected to these issues. Learn more about the Climate Web at our companion website.
