Planet Panel

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Tuesday, October 27, 2009

Excerpts from comments by The Post's panel of experts on climate change.

Q In order to meet proposed curbs on greenhouse gases, policymakers are considering letting industries offset their emissions through everything from conserving tropical forests to capturing methane and no-till farming. To what extent are these measures equivalent to cutting emissions outright?

Robert J. Shapiro, chairman of the U.S. Climate Task Force

In a perfect world, one greenhouse gas emitter paying someone else to reduce their emissions would be equivalent to the first emitter taking comparable steps. In the world that people actually inhabit, such offsets under a cap-and-trade system open many doors to fraud and abuse . . . .

How precisely could anyone verify that funds from an American utility or energy producer would actually be used to conserve tropical forests, and in ways that wouldn't have happened anyway? How do we assure ourselves that third-world governments will actually use support from BP or American Power to build more climate-friendly facilities in the Mideast or Asia? The answer is, we cannot do so -- and, given that, there would be little to stop the fraud and abuse.

By contrast, a carbon-based tax approach is much simpler and transparent, and consequently much easier to monitor and enforce. Under such a system, domestic offsets could be permitted -- but only if they actually involve the point of these systems: actual reductions in emissions, and not nebulous actions that might somehow indirectly ameliorate climate change.

David Hone, climate change adviser for the Shell Group and vice chairman of the International Emissions Trading Association

Offsets are an integral part of a broad, market-driven approach to reducing emissions. Whereas a carbon tax will always remain a domestic fiscal policy instrument with no real reach beyond national borders, a cap-and-trade system is very different.

It offers a broader range of projects for reducing emissions, which typically reduces the overall cost of the system to the economy as a whole. It projects the carbon price from the cap-and-trade system into other parts of the economy where it is not present or into other economies that have no cap-and-trade system -- normally, developing economies. This encourages more-widespread reduction of emissions.

The second point above is particularly important. Early exposure to carbon markets through offsets linked to the European cap-and-trade system is already helping developing economies manage emissions and preparing them for the day when their own domestic policy action comes into place. The international trading of offsets is now underway as a result of this and is a principal component part of the nascent global carbon market.

As long as offsets result in real offshore reductions, which can be measured and verified, they offer both economic and political benefits and should therefore be encouraged.

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