Competing policy ideas: 'Everything is up for discussion' says B.C.'s Environment Minister.

As BC Liberals revisit their approach to a carbon neutral public sector, some advice they’ll likely get.
By Tom Barrett
December 7, 2011
Tyee Solutions Society

The B.C. government is reviewing its controversial carbon neutral government strategy and Environment Minister Terry Lake says “everything is up for discussion.”

He’ll get lots of advice. Critics have complained that the strategy uses tax dollars to pay profitable corporations to cut their greenhouse gas emissions and they’ve questioned whether public money was needed to make those cuts. Some, like Independent MLA Bob Simpson, have called the strategy a “sham” and want the carbon neutral legislation repealed.

It’s uncertain how far the government is prepared to go to answer these charges. Nor do critics and stakeholders agree on what Lake should do instead. The consultations will largely take place in private, but here’s a peek at some of the proposals — both solicited and unsolicited — Lake is likely to hear:

Scrap it

The most radical solution, this is also the least likely to be followed by the government. It’s the answer put forward by those who believe that the problems with carbon neutral government are more than growing pains.

The idea that the B.C. government is carbon neutral — a net-zero emitter of greenhouse gases (GHGs) — is largely based on the purchase of carbon offsets. If you believe, like Simon Fraser University economist Mark Jaccard, that carbon offsets are an illusion, it’s hard to imagine what else can be done with the program except ditch it.

The program works this way: for every tonne of greenhouse gases a government organization emits, it must pay $25. That money goes to a Crown corporation called the Pacific Carbon Trust (PCT), which uses it to buy offsets from B.C. companies and organizations. Offsets represent emissions that these companies and organizations would have produced, but have decided instead to eliminate.

The total emissions reductions are supposed to match, tonne for tonne, the emissions put out by the public sector, which allows the government to declare itself carbon neutral.

The principle behind the scheme is that the private sector emissions cuts would not have happened if the government had not bought the offsets. But Jaccard argues that there’s no way to be sure that’s true.

He said programs like this tend to attract what are known as “free riders,” participants who would have reduced their emissions even if they hadn’t been paid. And, if the cuts would have happened without the government’s help, then you can’t claim they offset the government’s own emissions.

(The government and its supporters argue that the PCT’s offsets are genuine because they are examined closely by independent consultants who reject any free riders.)

BC Conservative Party Leader John Cummins has promised to kill the province’s “carbon bureaucracy,” including the carbon tax and the PCT. On the other side of the political spectrum, Independent MLA Simpson, one of the carbon neutral strategy’s most persistent critics, has introduced a private member’s bill called the Carbon Neutral Government Repeal Act. If passed — and private member’s bills rarely become law — public sector organizations would still have to track and report their GHG emissions, but they would not have to buy offsets from the PCT.

Don’t subsidize, tax

This option could be done with or without scrapping public sector offset payments. In this scenario, rather than paying corporations to reduce their emissions, government would make those emissions more expensive.

Currently, the carbon tax covers emissions caused by burning fossil fuels. That’s about three-quarters of the province’s total emissions. The other quarter comes from a number of sources, including landfills, gas pipelines and industrial processes like cement making.

Lake said the government is looking at putting a price on these emissions, but critics complain that the government is moving too slowly.

Ian Bruce, a climate specialist with the David Suzuki Foundation, said industrial emissions should be regulated or taxed.

“Instead of being part of the (PCT) offset portfolio, they should be required like other sectors in British Columbia to be contributing to reducing their own greenhouse gas emissions through regulations or through the carbon tax,” Bruce said. “That would help shift responsibility back to industrial polluters to reduce their own pollution. And in the long run it would make B.C.’s industry leaders in energy efficiency.”

Simpson points to offsets purchased from Encana as an example of what happens under the current policy. The PCT pays Encana an undisclosed amount to reduce emissions at a northeastern B.C. drill site. The PCT says that’s a reduction of just under 85,000 tonnes a year. But Encana is also going ahead with the Cabin Gas Plant near Fort Nelson, which will put out 2.2 million additional tonnes of GHGs a year.

That’s 25 times the emissions reduction the PCT paid for through offsets. In fact, it’s three times the total annual emissions offset by the entire B.C. public sector.

“That’s bad public policy,” Simpson said.

Keep it and fix it

Not everyone wants to scrap the program. Matt Horne, of the Pembina Institute, argues that B.C.’s carbon neutral government initiative is a “relatively unique” policy. “To expect to have gotten it exactly right on the first pass through probably isn’t realistic.”

He said he’s concerned about calls to drop the strategy because it has put a price on emissions in the public sector and has caused those working in government to think about their carbon footprint.

“It’s not universal, but there’s certainly lots of people thinking, ‘We’re paying $25 a tonne — how can we not pay that,’ ” Horne said. “That’s something that other types of green government programs haven’t accomplished.”

Horne is one of several people following this file who think offsets could be retained, but with a change in emphasis.

Give more weight to reducing

The B.C. carbon neutral strategy was policy in a hurry. Public sector organizations were given less than three years to cut their emissions before having to buy offsets. A government eager to develop a B.C. offset industry ended up giving much more weight in its strategy to offsets than to emissions-reducing capital projects.

A program of government grants eliminated 35,600 tonnes of annual GHGs, about four per cent of the total government output. But that grant program has been cancelled, and public organizations argue that they don’t have the capital funds to make further cuts.

Other jurisdictions have given themselves more time to reach the carbon neutral goal. And they’ve put emissions cuts before offsets. The U.K. Climate Change Department’s Guidance on Carbon Neutrality, the UN and ICLEI – Local Governments for Sustainability all stress reducing emissions before buying offsets.

A report from the Columbia Institute, a Vancouver civic governance think-tank and community group, shows how this approach to carbon neutral government has played out in the Australian state of New South Wales (NSW).

“Rather than setting a short timeline that would almost inevitably lead to high offset purchases, the NSW government in 2008 set a target of public sector carbon neutrality by 2020, giving public sector bodies time to implement real emissions reductions in their own operations,” says the report, titled Catch $25. “Under the NSW framework, offset purchases will not even be considered until 2014 (Year 6 of the plan), and only then after ‘all other means of reducing emissions have been put in place.’ If offsets do become part of the NSW plan, they would not be required until 2020, Year 12 of the program.”

Charley Beresford, executive director of the Columbia Institute and a co-author of the report, said in an interview that making real reductions before buying offsets should be the “primary principle” of a carbon neutral strategy.

James Tansey, a University of British Columbia business professor and president of Offsetters, counters that if the government had delayed offsetting it wouldn’t have gotten the attention of decision-makers in the public sector.

Hadi Dowlatabadi, a physicist with UBC’s Institute for Resources, Environment and Sustainability, said that buying offsets doesn’t preclude cutting emissions.

“If I can offset my emissions at a lower cost than the offset price, of course I’ll be doing that,” he said. And if it costs more than $25 a tonne to offset your emissions, then buying offsets from the Pacific Carbon Trust saves you money, he said.

What’s important is whether the public sector is being given the right kind of financial help to cut its emissions, he said. Which leads us to the next suggested solution:

Bring back the grants

From 2008 to 2010, the Public Sector Energy Conservation Agreement (PSECA) gave out $75 million to help the public sector cut carbon. But that money has dried up. Almost everybody involved would like to see it come back.

“If there’s a cost-effective project in a school we should make sure the funds are there to make sure that project’s happening,” said the Pembina Institute’s Horne.

This is one solution that seems likely to be adopted by the government. Environment Minister Lake said in an interview that “We recognize that people have concerns with private money going to offset private companies. Ideally, what we would do is have a fund that public sector organizations could access to help them reduce their greenhouse gas emissions.”

He mentioned PSECA as an example of such a fund.

In answer to the inevitable question of where the money would come from for such a fund, MLA Simpson makes this suggestion: take it from the surplus of the PCT.

Which is a step toward the next proposed solution:

Keep offset money in the public sector

This is a popular suggestion with public sector organizations and is endorsed by the BC New Democratic Party. The idea is that the money now going into offsets could be pooled into a fund that would pay for public sector emissions cuts.

“Those moneys should be remitted back to districts or to a common pot, as it were, to distribute to those districts that could make best use of the money,” B.C. School Trustees Association president Michael McEvoy said in an interview.

The money, he said, “needs to remain in the public system. That’s pretty simple. I don’t think it takes a gathering of stakeholders to figure that out. Our view would be the minister and the government should just move to resolve the problem.”

Lake seems less enthusiastic about this proposal, however.

“The problem is, if you take that money and don’t reduce greenhouse gas emissions elsewhere, you can’t call yourself carbon neutral,” he said.

The money currently being paid in offsets won’t fund enough capital projects to eliminate all of the public sector’s emissions, Lake said, although he added that he isn’t ruling the proposal out.

Simpson replies that the cuts would at least be real — no questions about whether offsets are genuine — and they would save taxpayers money.

Simpson is among those who have put forward another proposal that’s popular in the public sector, but unlikely to thrill Lake.

Give the whole public sector the deal local governments get

Municipalities get their carbon tax payments back if they agree to go carbon neutral. But they have a lot more leeway in how they achieve neutrality. They don’t have to go through the PCT. Instead they can buy cheaper offsets on the open market, participate in approved GHG reduction projects or start their own projects.

“There’s plenty of solutions available,” said the David Suzuki Foundation’s Bruce.

The last proposal on our list deals with the situation mentioned at the beginning of this series on carbon neutral government.

Deal with indirect emissions

UBC wants to build 8,000 new units of student housing. This would lower overall GHG emissions in the Lower Mainland by 7,700 tonnes a year; not only would the students be living in housing that would be more energy efficient than their current off-campus dwellings, but their commuting would be drastically cut.

But, because of a wrinkle in the way the B.C. government counts emissions, UBC would have to buy an extra $145,000 a year in offsets for cutting these GHGs.

In a study for the Pacific Institute for Climate Solutions, PhD student Kim Lau and Dowlatabadi argue that public sector organizations should assess and report indirect emissions such as those associated with commuting. However, they say, organizations shouldn’t have to buy offsets for such indirect emissions. Instead, they should be encouraged to reduce them and be allowed to claim the reductions as offsets — either to sell to the PCT or to balance their own emissions.

Dowlatabadi said the government is genuinely interested in this recommendation.

“I applaud what the Climate Action Secretariat have been doing,” he said. “They’ve been pioneers and they should be applauded for what they’ve been going. Nothing is perfect the first time out.

“What we should be doing is getting feedback on how to improve it, rather than to bash it so that it goes away altogether.”

It’s unclear when the government’s review of the carbon neutral strategy will be concluded. Lake said he’s not going to put a timeline on it, other than to say that “Hopefully, into the new year we’ll have a lot of these things wrapped up.”

Like much of the B.C. Climate Action Plan, it’s difficult to say exactly where carbon neutral government is headed or when it’s likely to get there. But given the strategy’s symbolic importance, a public debate around these proposed solutions can only be good for overall climate policy.

Tom Barrett is a widely published freelance journalist and Tyee contributing editor. This is the latest in the in-depth Tyee Solutions Society series ”B.C.’s Quest for Carbon Neutrality: Reports from Canada’s Climate Policy Frontier.” Funding for this series was provided by the Bullitt Foundation and Hospital Employees’ Union. All funders sign releases guaranteeing TSS full editorial autonomy. Likewise, funders do not formally endorse any of the particular findings of TSS’ work.

Solar panels on roof of Admiral Seymour School in Vancouver. Photo by Rob from Your BC: The Tyee's Photo Pool.

Whatever its flaws, BC’s quest for carbon neutrality is getting some things done in the public sector.
By Tom Barrett
December 1, 2011
TheTyee.ca

[Editor's note: This is the latest in an in-depth Tyee Solutions Society series, "BC's Quest for Carbon Neutrality: Reports from Canada's Climate Policy Frontier." Find the series so far here.]

Even its staunchest supporters admit that B.C.’s strategy to make government carbon neutral has some flaws. But the scheme has also brought benefits. By forcing public sector organizations to measure their carbon, and putting a price on those releases, the program has sparked greenhouse gas reductions throughout government.

The public sector’s interest in cutting emissions is reflected in the numbers. From 2008 to 2010, the government’s Public Sector Energy Conservation Agreement, or PSECA, gave out $75 million for capital projects that would reduce public organizations’ carbon footprints.

The program received a total of 852 applications, only 250 of which were approved and completed. While some of those applications were rejected because they didn’t meet program criteria, the level of interest was obviously high.

Even without the subsidies, public sector organizations have been working on cutting their GHGs, in part because they don’t want to pay to offset their emissions. To that extent, the carbon neutral government program has worked.

School District 27, in the Cariboo-Chilcotin, received a total of $750,000 in PSECA money. With two PSECA-funded projects and a host of other initiatives, the district figures it has eliminated almost 1,000 tonnes from its carbon footprint — a cut of 16 per cent, said district secretary-treasurer Bonnie Roller.

She said at least three-quarters of the cuts were prompted by the carbon neutral government strategy.

Emissions-reducing projects completed or planned in School District 27 include:

• A geothermal heat pump system at Mile 108 Elementary School;

• A high efficiency boiler at Williams Lake Secondary;

• Four solar hot water systems at different schools;

• A “solar wall” to preheat ventilation air at Williams Lake Senior Secondary; and

• Biomass boiler systems at two rural schools that burn wood pellets, which are considered to be carbon neutral fuel.

“In addition, the biomass fuel will come from local sources further reducing the transportation carbon production and aiding the local forestry industry,” Roller wrote in the district’s environmental report.

Leaders

School districts are going to cut their emissions to some extent even without a carbon neutral government strategy, Roller said in an interview. “Being in the education system, we very much want to be leaders.”

The energy projects teach students the importance of reducing emissions and how it can be done, she said. Science students, for example, will get an up-close opportunity to learn how solar hot water systems work.

Roller credits the district’s former manager of facilities, Doug Gorcak, who developed an early expertise in energy-saving systems. When the PSECA money was offered, S.D. 27 was poised to “get our foot in the door,” she said.

Gorcak has moved to Penticton, but the Cariboo-Chilcotin district is committed to continuing what he started, Roller said.

She said the energy efficiency projects have probably saved the district more than $200,000 over the last five years. Unfortunately, she adds, that money has been swallowed up by higher fuel costs for school buses.

Which brings up the downside of carbon neutral government from the school districts’ point of view.

District 27 has written to Victoria, asking that the carbon neutral government strategy be reformed. Under the strategy, when public sector organizations are unable to reduce their actual emissions further, and need to bring their carbon balance down to zero through the purchase of offsets, they must pay $25 per tonne of emissions to the Pacific Carbon Trust. The Crown agency uses the money to pay private sector companies to reduce their emissions. District 27 thinks that money should stay in the district, to fund more energy-saving projects.

For 2010, the first year of carbon neutral government, S.D. 27 sent $85,000 to the Pacific Carbon Trust. That’s a tiny portion of the district’s total operating budget — about 0.2 per cent. But Roller said it’s still a significant sum when dollars are too short to start with.

“When we budget, we budget out every penny,” she said. “Over the last two years our unrestricted surplus has been right around the $150,000 mark. Which isn’t very much when you’re considering a $54 million budget.”

Bigger budget, same gripe

The University of B.C. bought a lot more offsets than the Cariboo-Chilcotin school district — more than $1.5 million worth in all. But in relation to the university’s total operating budget, the amount is about the same, 0.2 per cent. And it’s money UBC as well would like to see come back.

“We would love to take those offset dollars and invest them in our own projects for sure,” said Nancy Knight, UBC’s associate vice president, planning.

UBC began reducing its carbon footprint in the 1990s, long before the provincial government declared war on climate change. It’s already met the Kyoto target of a six per cent reduction in emissions from its 1990 level.

And it has pledged to further reduce its emissions by 33 per cent below 2007 levels by 2015. That’s five years ahead of the provincial government’s target.

The university has won awards for its commitment to sustainability. Its ECOTrek energy retrofit project — a six-year initiative launched in 2001 — saves $4 million a year in energy costs and is described by UBC as the largest project of its kind in Canada.

More feasible

The university is currently working on three more “really big projects,” Knight said:

• An $85 million project to convert steam heating facilities to hot water is expected to reduce greenhouse gas emissions at the Point Grey campus by 20 per cent. “You don’t really need steam for heat,” Knight said. “Hot water is a much better source now.”

• A $27 million biomass project, to be completed next year, is expected to cut the university’s natural gas consumption by 12 per cent.

• A “continuous optimization” project, in partnership with BC Hydro, will regularly monitor and reduce energy use in 72 academic buildings. “Buildings are like vehicles,” said Knight. “They go out of tune.” This program aims to keep the buildings in tune, resulting in an expected 10 per cent reduction in GHG levels.

While UBC’s longstanding commitment to sustainability suggests that at least some of these improvements would have happened without the carbon neutral government strategy, Knight said the price the scheme puts on carbon makes them more feasible.

The steam-to-hot-water conversion project “would have been a tougher project to make the business case for without the carbon tax and the offset requirements,” Knight said. “I wouldn’t say that without those we wouldn’t have done it. But I think they made it a heck of a lot easier for our board of governors to see it was the right thing to do.”

UBC generally supports the carbon neutral government strategy, she said.

“I think there’s wrinkles in the policy and the programs, as there always are when you introduce new things. We look forward to continuing to work on those with government.”

So putting a price on carbon emissions can have positive effects. But when public sector organizations pay the price, does it make sense — in terms of either policy or politics — to give their money to the private sector?

In the next piece in this series, running Monday, we’ll look at how and why this happens, and what it means.

Tom Barrett is a widely published freelance journalist and Tyee contributing editor. This is the latest in the in-depth Tyee Solutions Society series “B.C.’s Quest for Carbon Neutrality: Reports from Canada’s Climate Policy Frontier.” Funding for this series was provided by the Bullitt Foundation and Hospital Employees’ Union. All funders sign releases guaranteeing TSS full editorial autonomy. Likewise, funders do not formally endorse any of the particular findings of TSS’ work.

COUNTING CARBON

$18.2 million: Total amount the B.C. public sector paid the Pacific Carbon Trust to offset 2010 emissions.

729,782: Number of tonnes of carbon offset.

1: Percentage of total B.C. emissions those offsets represent.

$75 million: Amount the Public Sector Energy Conservation Agreement gave to public sector organizations for emissions-cutting capital investments.

35,600: Number of tonnes of carbon the government estimates those improvements will prevent from being emitted annually.

$12.6 million: Energy costs the government estimates those grants will save annually.

Source: LiveSmart BC Carbon Neutral Report

Counting trees as carbon reducers is controversial. Photo courtesy of aloalo from Your BC: The Tyee's Photo Pool.

Not everyone’s buying the math the government uses to make its claim.
By Tom Barrett
November 30, 2011
Tyee Solutions Society

[Editor's note: This is the fifth article in an in-depth Tyee Solutions Society series, "BC's Quest for Carbon Neutrality: Reports from Canada's Climate Policy Frontier." Find the series so far here.]

The University of British Columbia (UBC) prides itself on reducing its carbon footprint. Long before Gordon Campbell got climate change religion, UBC was looking for ways to reduce its greenhouse gas (GHG) emissions.

Now the university would like to build more student housing on its Point Grey campus. This would be good for the environment; students who currently commute long distances would instead be able to walk to class. GHG emissions would drop.

But if UBC builds the student housing, the provincial government will force it to pay a penalty. And the penalty would be levied under a highly touted carbon-neutral government strategy that is supposed to be fighting climate change.

Turns out there’s more to being carbon neutral than meets the eye.

The B.C. government declared itself carbon neutral on June 30 — “a first for North America,” as the press release proclaimed. The declaration marked “an achievement that places British Columbia on the leading edge of climate action and growth in the clean-energy and clean-technology sectors.”

Questions have been raised, however, about whether B.C.’s public sector is in fact carbon-neutral and what, exactly, that term means.

The term carbon-neutral suggests that an organization is not adding carbon dioxide or other climate-altering gases to the atmosphere. In practice it usually means that the organization has made an effort to reduce its emissions and has bought carbon offsets — credits supposed to represent reductions elsewhere in the economy — to neutralize the organization’s remaining emissions.

Critics, however, question how much of the B.C. government’s emissions are actually being offset.

“The government is not carbon-neutral and will not achieve true carbon neutrality anytime soon,” Independent MLA Bob Simpson said in the legislature in October.

To declare itself carbon-neutral, he said, the government exempted a number of operations, including BC Ferries. (A government spokesperson said Victoria exempted the Crown-owned corporation because it “has no operational control over BC Ferries.”)

Less is more

There are other kinds of emissions that aren’t counted, as well, which brings us back to UBC.

A study by Kim Lau, a UBC PhD student, and Hadi Dowlatabadi, a physicist with UBC’s Institute for Resources, Environment and Sustainability, discovered that the government’s carbon-neutral accounting scheme covers only 53 per cent of the total direct and indirect emissions associated with UBC’s Vancouver campus. And, while the UBC emissions covered by the strategy dropped by about one per cent between 2007 and 2009, emissions that aren’t covered actually increased by 2.4 per cent.

Lau and Dowlatabadi reviewed the carbon-neutral government initiative in a paper for the Pacific Institute for Climate Solutions. They calculated that, if UBC builds the 8,000 new units of student housing it wants, the reduced commuting would cut overall GHG emissions in the Lower Mainland by 7,700 tonnes per year. That’s because, as Dowlatabadi said in an interview, “Commuting to and from UBC is huge compared to what energy consumption is actually going on inside UBC.”

But the carbon-neutral strategy gives organizations no credit for reducing emissions from commuting. Instead, because increasing the amount of student housing on campus would increase UBC’s direct emissions, the university would have to spend an extra $145,000 per year on offsets.

That’s despite the fact that the students’ housing emissions would simply be moved from one place in the Lower Mainland to another. And the new UBC housing would be more energy efficient than students’ current homes.

Not all government organizations will have as low a proportion of uncovered emissions as UBC, Dowlatabadi said. A hospital, for example, would have less commuting associated with it.

Still, the study shows that many things government does that affect climate aren’t being counted, he said.

Dowlatabadi said that it’s understandable that the original carbon neutral strategy did not include most indirect emissions because they are more complicated to measure. But it would be wise for the government to review its rules and correct the unintended anomalies, he said.

The government has a “really genuine” interest in fixing this problem, he said. “The challenges in implementing a new paradigm always lead to good steps and bad steps. We’re dealing with new concepts. We need to think carefully about them. We need to roll them out, learn, then roll them out again with modification and improvement.”

Living in a hypothetical future

Even if the government fixes this unintended consequence, it will have to deal with a wave of other controversies attached to the program.

A fundamental question is whether offsets even work.

A carbon offset represents a reduction in greenhouse gases by a company or organization. When you buy an offset to cancel out your emissions, you pay so much a tonne to the organization that’s reducing its emissions. Carbon neutrality means that you have purchased enough offsets to compensate for all your emissions.

But Mark Jaccard, a Simon Fraser University resource economist and a special advisor to the government’s Climate Action Team, calls carbon-neutral government “a delusion.”

Offset buyers would be truly carbon-neutral if the offsets represented gases that were sucked out of the atmosphere and stored away permanently, like nuclear waste, Jaccard said.

“Not making it into trees, that’s no good,” he said. “It’s got to be in the earth’s crust or in big steel boxes or something that are millions of years stored away.”

That’s pretty expensive, though, so most offsets don’t work that way. Instead, organizations like the B.C. government’s Pacific Carbon Trust buy carbon credits from emitters who intend to emit less in the future. Say the owner of a warehouse would like to supplement his natural gas heating system with solar power. But he says he can’t afford the capital cost of putting in solar panels. The PCT steps in and subsidizes the conversion.

When the PCT decides how much to give the warehouse owner, it calculates the level of emissions the building would emit in the future if it continued to use natural gas for all its energy. Then it calculates the emissions with solar panels in place. It then pays the building owner so much per tonne for the difference: the “reduced” emissions.

But basing offsets on a hypothetical future is uncertain. Skeptical economists have a saying that the “offset market is based on the lack of delivery of an invisible substance to no one.”

“We can’t run history twice,” said Jaccard, so we don’t know for sure whether the emissions we’re paying to eliminate would ever have been created at all. Someone selling offsets might say they wouldn’t have cut their emissions without the payment, but we’ll never know for sure.

“You cannot assess an offset on an individual basis,” Jaccard said. “It’s what’s called the asymmetric information problem.”

Free riders

For example, if someone offers you money to buy a Prius, you might claim that if they hadn’t come along with that incentive you would have bought a gas-guzzling land yacht instead. But maybe you would have bought a Prius anyway. You’re the only one who really knows.

“In all cases, some critical information will only be known by the person who’s going to get the money,” Jaccard said.

He said large statistical studies suggest that a huge proportion of offset money goes to people who would have cut their emissions anyway — what economists call “free riders.” This is a major problem with all subsidy programs: governments often spend a lot of money rewarding people for what they would have done anyway.

Studies of climate-related subsidy programs have found that 50 per cent, 80 per cent, sometimes as high as 99 per cent of the participants in such programs are free riders, Jaccard said.

In 2008, Michael W. Wara and David G. Victor, of Stanford University, looked at the world’s largest offset market, the Kyoto Protocol Clean Development Mechanism (CDM). After studying greenhouse gas reduction projects in China, Wara and Victor found “an urgent need for reform.”

Well-designed offsets markets can play a small role in getting developing countries engaged in reducing emissions, the authors concluded. “However, in practice, much of the current CDM market does not reflect actual reductions in emissions, and that trend is poised to get worse.”

Added Wara and Victor: “Our paper focuses on international offsets, but we caution that these problems are unlikely to be substantially different for a domestic offsets program….”

Their conclusions were reinforced by a recently leaked diplomatic cable that, according to Nature magazine, “reveals that most of the CDM projects in India should not have been certified because they did not reduce emissions beyond those that would have been achieved without foreign investment.”

Similarly, a study of a project in Costa Rica that paid landowners to conserve forests found that the payments made a difference in less than one per cent of the forest lots that participated in the program.

Some offsets are ‘excellent’

Other experts, though, argue that offsets can work. There are plenty of offsets out there that are “rubbish,” said UBC’s Dowlatabadi. But some, he insists, are “excellent.”

Dowlatabadi said ground source heat pumps, which use one-third the energy of conventional home heating and cooling equipment, would make a good offset. Because those systems cost more — an investment that takes longer to recover — developers don’t install them, he said.

If you can pay a developer enough to make installing ground source heat pumps worth his while, “Then what is wrong with that?” Dowlatabadi asked.

He stresses that he thinks the B.C. government is doing its best to make carbon-neutral government work. But he’s not wild about some of the offsets that the PCT has sponsored.

In particular, he’s skeptical about offsets that subsidize switching from fossil fuels to electricity. If BC Hydro drops its plans for clean energy self-sufficiency, Dowlatabadi said, some of the electricity that powers projects funded with offset money could end up coming from coal- or gas-fired plants in Alberta.

If that happens, the project “becomes a (carbon) liability, not an offset.”

Then there are forestry offsets. Trees absorb carbon dioxide, so paying someone to not chop them down can qualify as an offset. Sixty per cent of the PCT’s offsets in 2010 came from two forest projects: the Darkwoods project in the Nelson-Creston area and an improved forest management project on private land owned by TimberWest on Vancouver Island.

Both projects have been criticized in the media, notably by resource policy analyst Ben Parfitt and MLA Bob Simpson. Dowlatabadi has his own criticisms. The UBC academic co-founded Offsetters Clean Technology Inc., a company that invests in offset projects. He’s no longer with the organization, but during his time with Offsetters, Dowlatabadi said, “We never accepted forestry offsets.” He still wouldn’t do them, he added.

The impact of climate change on forests is not known, Dowlatabadi said. A lot of the trees that the PCT assumes will act as carbon sinks may in fact die and return their carbon to the atmosphere because of a hotter climate, he said.

“I can pretty well guarantee you that we’ll have much higher mortality rates,” Dowlatabadi said.

A hotter climate could also mean more forest fires, he said. If the trees burn, they give up carbon instead of absorbing it.

Said Dowlatabadi: “I think it’s premature to invest in carbon offsets using forestry.”

There are some PCT offset projects that Dowlatabadi does like.

He calls a project at Interfor’s Adams Lake sawmill that saw a switch from liquefied natural gas to wood waste “a good idea.” Interfor uses wood left over from its milling operations to dry lumber and heat buildings at the mill.

He also likes the idea of installing insulating curtains at a number of Lower Mainland greenhouses. The curtains reduce heat loss and lower the greenhouses’ natural gas bills.

Scrutiny

The Pacific Carbon Trust defends its portfolio of offsets by stressing the close scrutiny it gives to each project. The Crown corporation says it has developed rigorous protocols to make sure that its offsets represent real reductions.

Every project is reviewed by independent third parties drawn from a list of companies approved by the PCT. The companies must be accredited by the International Accreditation Forum. Each project is reviewed twice. There is a “validation” review that occurs before the project is approved and a “verification” review that happens once the project is operating.

“The independent opinion and professional expertise of the validator and verifier is central to the project development process,” a PCT spokeswoman said in an email. (No one from the PCT was available to participate in a live interview.) “The validator and verifier are required to have specific expertise related to the project type and investigate all aspects of the project, including ‘additionality’ (the requirement that the project would not have happened without the sale of offsets).”

“The validation and verification audits provide the same level of assurance that is provided in a financial audit of a publicly traded corporation.”

To qualify a project as an offset, the company or organization must “demonstrate financial, technological or other obstacles that are partially or fully overcome by revenues from offset sales.”

As for Dowlatabadi’s cautions about the effects of a change in Hydro policy on offsets, the spokeswoman replied in an email that if Hydro changes its policy, the PCT will make the necessary adjustments to its offset procedures.

Accounting for fire and bugs

Forest offsets also have their defenders. James Tansey, a UBC business professor and the president of Offsetters, agrees that there was a time when the company avoided forest offsets. But British Columbia has developed rigorous standards that overcome Dowlatabadi’s objections, he said.

There is no doubt forests absorb carbon, Tansey said. The only question is whether offsets conform to the highest standards.

“I am now confident that we have an approach to forest carbon offsets development that’s the strongest in the world,” he said.

David Rokoss, director of business development for ERA Inc., which helped develop the Darkwoods offset project, said in an interview that B.C.’s forest offset projects have stringent safeguards built into them.

“There’s so many assurance mechanisms built in that the likelihood of having a catastrophic reversal that is unaccounted for is practically zero…. The system has backup mechanism after backup mechanism after backup mechanism,” he said.

Rokoss said a certain amount of carbon credit is deducted from the total absorbed by a forest project to cover things like fires, infestations and flood. On top of that, each forest project has a “buffer” — “10, 20, 30 per cent or more of the total volume of carbon that’s for sale” — to cover the possibility of fire.

In other words, he said, a project that preserves forests and removes 100,000 tonnes of carbon a year could be paid for only 70,000 tonnes of offset credits.

“You can have hundreds, thousands of trees actually fall over, be damaged or release carbon over time,” Rokoss said. “That is all accounted for.”

Critics remain skeptical about the rigour of the PCT’s approval process. But beyond the question of whether offsets are reducing emissions as much as advocates claim, the pursuit of a carbon-neutral government has produced other benefits: putting a price on public sector emissions has led to real reductions.

In our next instalment tomorrow, we’ll look at some carbon-neutral government success stories.

Tom Barrett is a widely published freelance journalist and Tyee contributing editor.

This is the latest in the in-depth Tyee Solutions Society series “B.C.’s Quest for Carbon Neutrality: Reports from Canada’s Climate Policy Frontier.” Funding for this series was provided by the Bullitt Foundation and Hospital Employees’ Union. All funders sign releases guaranteeing TSS full editorial autonomy. Likewise, funders do not formally endorse any of the particular findings of TSS’ work.

THE POWER OF ZERO

The goal of a carbon-neutral B.C. government was first proclaimed in 2007, as part of then-premier Gordon Campbell’s sweeping array of climate change initiatives.

By going carbon neutral, the government vowed, it would accomplish a number of goals. It would lower emissions, publicize the importance of fighting climate change, set an example for the rest of the province, foster the development of green technology and a low-carbon economy, and cash in on an expected boom in carbon trading and carbon offsets.

B.C.’s public sector — schools, colleges, universities, hospitals and Crown corporations as well as core government — were ordered to measure their carbon emissions and reduce them where they could.

As of 2010, public sector organizations must buy carbon offsets to cover their emissions. They must buy these offsets, which cost $25/tonne of emissions, from a Crown corporation called the Pacific Carbon Trust (PCT).

The offsets represent emissions reductions elsewhere in the B.C. economy that, in theory, wouldn’t have happened without the sale of the offset. Thanks to these private sector

Despite the controversies that surround the program, carbon-neutral government is really a bit of a sideshow when it comes to climate policy. Total public sector emissions represent about one per cent of the total GHGs emitted by the province. Public sector organizations spend less than one per cent of their operating budgets on offsets.

But the symbolism of the strategy was always more important to government than the actual emissions or dollars involved. “Our government believes it is important to model and to lead and to show British Columbians that this is an important, critical issue,” John Yap, former minister of state for climate action, said in the legislature in October.

But many who follow climate policy note that symbolism cuts both ways. While a successful carbon-neutral government could become a positive icon, if that policy fails, or becomes associated with unpopular messages — that tax dollars are being taken from classrooms and operating theatres and given to profitable corporations or wasted on offsets that don’t reduce real emissions — the failure could set back the whole fight against climate change. — T.B.

A SYMBOLIC GAMBLE

Despite the controversies that surround the program, carbon-neutral government is really a bit of a sideshow when it comes to climate policy. Total public sector emissions represent about one per cent of the total GHGs emitted by the province. Public sector organizations spend less than one per cent of their operating budgets on offsets.

But the symbolism of the strategy was always more important to government than the actual emissions or dollars involved. “Our government believes it is important to model and to lead and to show British Columbians that this is an important, critical issue,” John Yap, former minister of state for climate action, said in the legislature in October.

But many who follow climate policy note that symbolism cuts both ways. While a successful carbon-neutral government could become a positive icon, if that policy fails, or becomes associated with unpopular messages — that tax dollars are being taken from classrooms and operating theatres and given to profitable corporations or wasted on offsets that don’t reduce real emissions — the failure could set back the whole fight against climate change. — T.B.