Carbon Offsets Take Center Stage in California's Cap & Trade Program
Writing from a redwood forest in Leggett on California's North Coast, the Times' reporter observes how forest carbon offsets are verified. Such offsets will play a key role in the nation's first broad application of the market-based strategy known as "cap & trade" to reduce greenhouse gas emissions, the cause of climate change.
"On Jan. 1, (California) will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit. Under the system, known as 'cap and trade,' the state will set an overall ceiling on those emissions and assign allowable emission amounts for individual polluters. A portion of these so-called allowances will be allocated to utilities, manufacturers and others; the remainder will be auctioned off.
To obtain the allowances needed to account for their emissions, companies can buy them at auction or on the carbon market. They can secure offset credits, as they are known, either by buying leftover allowances from emitters that have met their targets or by purchasing them from projects that remove carbon dioxide or other greenhouse gases from the atmosphere." The projects need not be based in California.
"At first, only four means of carbon reduction will be approved for offset credits:
- timber management
- destruction of coolant gases
- cuts in methane emissions from livestock waste
- tree planting projects in urban areas"
All eyes will be watching as the outcome of the program is uncertain. Will energy-intensive industries, eg. refineries and cement makers, leave the state due to the increased carbon costs? Will there be 'offset cheating'?
Offsets have already created a lucrative new industry to ensure the latter doesn't occur: carbon offset verification, which explains why Barringer was writing from Leggett.
"'The worst possible thing to happen is if it fails,' said Robert N. Stavins, a Harvard economist."
Thanks to Loren Spiekerman