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Buying a stairway to heaven?

Filed under: — david @ 29 May 2006

Just in the last year or so, a new type of scheme for reducing personal carbon emissions has appeared, the remarkably painless purchasing of “carbon offsets”. claims to neutralize a person’s CO2 footprint on the Earth for the low, low price of $99 per year, plus if you act now they will throw in an extra 5 tons for free! And you get a pen! Prices listed here range from $5-30 per ton of CO2 from a variety of similar organizations around the world. The average U.S. citizen is responsible for about 20 tons of CO2 release per year.

Compliance with Kyoto, a mere 5% reduction in carbon emissions, was forecast by Nordhaus [2001] to cost a few percent of GDP globally. The cost to stop emission completely and immediately may not even be calculable. promises zero net emissions, for a fraction of 1% of the average U.S. income. Can this possibly be real, or are we talking indulgences and snake oil?

The idea behind carbon offsets is built upon the foundation of carbon emissions trading established by the Kyoto Protocol, a scheme called cap and trade. Carbon emissions for industries are capped at some level by regulatory permits to emit CO2. If a company is able to cut its emissions below that level, it can sell its emission permits to another company. The cuts in emissions are thereby steered, by the invisible hand of the market, to the cheapest and most efficient means. Cap-and-trade has worked well for reduction of sulfur emissions in the U.S., that are responsible for acid rain. CO2 emission is intrinsically even better suited for cap-and-trade, because it is a truly global pollutant, so it matters not where the CO2 is emitted.

The carbon emissions market requires a certification process to verify any reduction in carbon emissions. and the other similar operations take donations from people like me and use the money to pay for renewable energy sources like solar cells or wind farms, that would not have been built otherwise. For these efforts, they receive credits for reduction in carbon emissions that are certified as valid, and therefore eligible for trade in the emissions market. Instead of trading that emission credit, “retires” it, so that it isn’t used to balance higher carbon emission from another source. The certification process from the emissions market has an unintended benefit of providing an independent way to verify the carbon impact from sending money to organizations like It’s a nifty idea.

The only piece of this picture that I don’t personally believe is carbon credits for land-use changes, reforestation. This was a U.S. idea in the Kyoto negotiations, back in the day when we were still pissing in the tent from the inside. It is true that forests hold more carbon per square meter than bare land does. However, estimating the exact amount of carbon in a forest is not so easy, because most of the carbon is in the soil, where its concentration is variable and laborious to measure. Could a forest that was cut and burned last year be claimed to be a carbon sink this year, as the forest grows back? What if the forest is cut again next year, will the carbon credits issued this year be chased down and revoked? To its credit, is quite up front about these sorts of concerns, and gives donors the option to invest their money in ways that are more transparent.

What I don’t understand is why entrepreneurs don’t invest in carbon reduction certificates, like does, but rather than retire the certificates, sell them in the carbon emissions market. The going rate for emissions permits in the market is on the order of $20-30 per ton, while claims to reduce carbon emissions for about $5 per ton. Seems like one could make a killing. I guess that’s the whole point of emissions trading. But the discrepancy in prices makes me a bit suspicious.

What about the discrepancy between the huge projected costs for nation-scale carbon cuts versus these cheap fixes for the emissions of an individual? I believe what we are looking at is a situation known as “low-hanging fruit”. If everyone in the U.S. decided to become carbon neutral, the price for doing it would rise, because the easy fixes would be used up. So the CO2 emission reductions achievable by purchasing of carbon offsets, at the low, low price of $99 per year, are almost by definition small relative to the overall scale of the problem. It would take more than $99 per American to prevent global warming; for that we will have to actually reduce our CO2 emissions. Carbon offsets cannot do it alone.

Carbon offsets are beneficial in the meantime, however, because they do cut carbon emissions, and the money stimulates development of alternative energy technologies. The bottom line is, despite my deep initial skepticism, I now see how carbon offsets could actually work as advertised, enabling an individual to live a carbon-neutral life, even in the United States. This is a terrific idea. Sign me up!

Nordhaus, W.D., Climate change – Global warming economics, Science, 294 (5545), 1283-1284, 2001.

157 Responses to “Buying a stairway to heaven?”

  1. 1
    Hank Roberts says:

    I think looking up your local sustainable farm and buying from them might be a more direct way of turning money into topsoil.

    But you won’t get a free plastic disposable pen.

  2. 2
    Almuth Ernsting says:

    I completely agree with David that carbon credits for renewable energy are a good idea, but the ‘plant a tree and feel good about flying’ idea (popular in the UK) is dodgy.

    The carbon sink ideas seems to have been introduced to allow nations to emit more CO2, and some of the schemes funded by the Clean Development Mechanism sound pretty bad (such as growing eucalyptus plantations on former rainforest land).

    However, I think that rainforest protection and the restoration of degraded ecosystems (eg the re-flooding of Borneo’s drained peat swamps, which could reduce massive CO2 emissions from carbon fires) should benefit from carbon credits. After all, rainforest destruction is a very large source of greenhouse gas emissions, and most rainforests are in developing countries which desperately need the funds to stop their destruction. I am thinking of proposals which the Coalition of Rainforest Nations putto the UN Conference in Montreal last year. If successful, this could even draw many developing nations into a binding agreement. Meantime, there are some very good projects and organisations already which individuals and companies could fund via carbon credits, since money is desperately needed now.

  3. 3
    Edward Greisch says:

    Are those the same people who think thety can compress the CO2 and sequester it forever at high pressure underground [until it leaks] and still gain energy by burning coal? They don’t have any plan to get energy that will work with the society and infrastructure we now have. Solar and wind energy are neither free nor 100% safe and they don’t happen when and where needed. The only realistic thing that can be done NOW is to convert all coal-fired powerplants to nuclear. That conversion hasn’t happened because most people are paranoid about all things nuclear. The reason is that most people, including Science graduates, have never heard of background radiation, and they don’t know that burning coal puts hundreds of thousands of tons of uranium into the air. I would attach the papers if this email device had an attacher. Look at these URLs to get part of what I would like to send:
    Note that it is not possible for a reactor which has 2% enriched uranium to explode like a bomb. A bomb requires at least 90+% enriched uranium or pure [99+%] plutonium. See the December 2005 issue of Scientific American for a reactor that consumes its own waste to generate additional power. Storage problem solved.

    [Response:It’s true that nuclear has seen a resurgence of interest for the reasons you mention. To be fair to the issue, I must point out that Chernobyl had the capacity to make a large swath of the Ukrainian breadbasket, and the city of Kiev, uninhabitale essentially forever, if the core meltdown had reached the water table. Reactors don’t explode like nuclear bombs, but breeder reactors make it a lot easier for people to make bombs. David]

  4. 4
    andrew jones says:

    Thought u guys might find this interesting. the world economic forum has a prediction market for severe weather this year. currently it’s predicting over 119 events this year.


  5. 5
    teacher ocean says:

    There are huge deserts in almost every continent of the world where solar energy is abundant and can be stored. I don’t think we are making efficient use of them. sounds interesting.. Kind of like the least we could do.. I buy it.

  6. 6
    Leonard Evens says:

    I agree that making a $99 contribution towards dealing with global warming, which is basically what this is, makes a certain amount of sense, but as the article points out only for a relatively small number of people. After all, someone has to switch to non carbon sources of energy. We can’t all continue to use fossil fuels to the degree we have been and pay someone else to do otherwise. Who are the others?

    With respect to comments 1 and 2, I think it is a big mistake to focus on one or two possible solutions. It seems clear we are going to have to do a lot of things, including some that may have some serious problems associated with them. With respect to nuclear power, I think those who tout it as “the solution” are fantasizing. The potential dangers and complexity of nuclear power mean that the amount of power we can expect from it is limited. Properly regulated nuclear power will be only be part of the solution, and it may be a relatively small part. On the other hand, those who think we can do it all with solar, wind, and other renewable sources are also dreaming. Like it or not, increased use of nuclear power and carbon sequestering, with their attendant poblems, are also going to be needed.

  7. 7
    Brian Jackson says:

    This is a timely post for me, since I taking a long-haul flight to a conference this summer, and was considering buying carbon offsets. I was initially rather skeptical about the concept myself, so it’s good to get an expert opinion. I trust climate scientists will also be sure to be “carbon neutral” when travelling to all of their conferences? ;-)

    [Response:There’s a lot of CO2 in beer, I don’t know where that comes from…. David]

    Perhaps in the near future scientific conferences will be conducted over the web anyway, thus removing such dilemmas…

  8. 8
    Tom Arnold says:

    For a very thorough overview of this issue and the current state of the market, I would counsel your readers to an excellend overview artticle at

    Definition Clarification

    Verification: the process of reviewing documents, contracts, materials to ensure that a provider has met its obligations to its customers. (CarbonFund does not have this)
    Certification adherence to a standard for retail carbon offsets (no such standard yet exists).

    As for your question about pricing — the reason arbitratge doesn’t happen between the markets is that Brussels uses CDM as an escape valve on a mainly allowance-based market. Credits retired by voluntary groups in the US have no hope of being included in that market.

    Finally, while carbon offsets represent an opportunity to discretely reduce your carbon impact, they also represent a great way to talk about climate change, your perspective and potential solutions.

    TerraPass does not include land-use changes in its portfolio and is independently verified program.

    Disclosure: I run TerraPass.

  9. 9
    Jim Torson says:

    In response to comment 1, see:

    Nuclear energy can’t solve global warming
    Other remedies 7 times more beneficial


  10. 10
    Christian Poecher says:

    There is another company, that does a similar job for years now. It’s , formerly known as Future Forests. Although I bought one or two trees from them, I opt for own investments by now. Even if you cannot invest enough money to buy your own renewable energy facility, you can buy shares or borrow money to a company, that invests in renewables. You even get money back, eventually.

  11. 11
    Dan Hughes says:

    A free book about nuclear power is available online here:

  12. 12
    Tinna says:

    I think this is a great idea, it may not solve all the worlds problems but it is definitely a step in the right direction. What I don’t understand is why would they want to send everyone a pen? I can’t imagine the pen luring in indecisive donors, so it is just another piece of junk that piles up in ones home. One pen may not seem like anything much, but I think it encompasses our weakness which is driving us to doom; the affection for cool/cute objects we can hold and admire, however useless they may be.

    It makes me upset that as we are striving to reduce energy consumption, we are wasting it on manufacturing junk.

    [Response: Ah, but think of all the carbon sequestered in nonbiodegradable plastic pens in all the landfills around the world! Quite seriously, this does make me wonder a bit about the possibility of carbon sequestration through formation of nondegradable organic compounds like certain plastics. I wonder if that might be easier to do than artifically making limestone out of silicates. –raypierre]

  13. 13
    Ken Johnson says:

    I think there is some confusion here because of ambiguous use of the term “carbon offset”. Just as a grocery store gives you the option of buying an organic avocado or a convention avocado, the so-called “carbon offsets” sold by effectively give you the choice of buying “organic” renewable energy or conventional fossil-fuel energy. You can exercise your purchasing power to increase the demand for renewable energy, but the conventional energy you would have otherwise purchased is not taken off the market â�� it is still available for sale (and may be marginally cheaper because of your decreased demand for conventional energy). By contrast, if you purchase emission credits in a cap-and-trade system, and retire those credits, then you have effectively reduced the cap, and total emissions should (in principle) be reduced by the amount of your credit irrespective of how expensive energy becomes.

    Of course, emission credits are not typically retired. They only have economic value because they give the purchaser the right to generate more emissions. Similarly, the Kyoto Protocol�s �carbon offsets� simply provide a mechanism for paying someone else to do your emission reduction for you. In this context emission trading and carbon offsets have nothing do to with reducing emissions � they merely function to reduce costs.

    The theory of cap-and-trade is that it doesn�t matter how you achieve emission reductions, as long as the total reduction is sufficient to achieve the environmental objective. But if GHG emissions are not actually capped at a sustainable level (which they never are), trading and offsets motivate industry to focus primarily on the quickest and cheapest emission reduction strategies (e.g., �plant trees�) and to indefinitely postpone long-term investment in more fundamental energy technologies that will be required to establish a sustainable global economy.

  14. 14
    Dan Hughes says:

    WIll you kindly supply a source for the, ‘ … about 24 tons of CO2 … ‘, and give the units. That is, is it about 24,000 kg or about 48,000 pounds. Thanks

    [Response:I think I saw that number on the site. You can good info from International Energy Outlook 2003. Energy Information Administration, U.S. Department of Energy. I got from there a number closer to 20 tonnes (metric) of CO2 per person. Note that carbon fluxes are often presented as gigatons of carbon, whereas here we’re talking tons of CO2. This is why chemists prefer moles to mass units. David]

  15. 15
    Pekka Kostamo says:

    The European carbon exchange can be found at

    The page gives access to Excel tabulations on price history of this commodity. The scheme was started only a year ago, and it appears that some improvement may be needed. Under the current system the prices are overly sensitive to quite independent short term variables like availability of hydropower, or power consumption changes due to temperature anomalies. A good example is the market crash at the end of April, when it became known that such random phenomena had produced some unexpected (but probably short-lived) declines in carbon dioxide emissions.

    Some power companies made handsome profits selling their emission allowances in time, which profits they dutifully distributed to their shareholders. A year with lesser rains and they must buy back the same, and obviously recover the extra production cost from their customers.

  16. 16
    Brian Gordon says:

    Was it Einstein who said we cannot solve a problem with the same level of thinking that caused it? Not to be too Luddite-ish, but all solutions based primarily on using technology and continuing economic growth – even if they save us temporarily – will cause greater disaster in the future. This applies to nuclear and carbon sequestration – they will simply create more, and more dangerous problems sooner or later…but certainly sooner than we expect. :-) (The idea of 6.5B+ people – and growing – even striving for the developed world’s lifestyle, never mind achieving it, surely is obviously unsustainable.)

    Ultimately, we must learn to find conservation and long-term thinking appealing, rather than irritating (and the population must decrease). Until that happens (or until climate change eliminates civilization and most of everything we know and love), I think carbon offsets are a great step in the right direction. Nothing wrong with grabbing the “low-hanging fruit.” I believe one can purchse tiny chunks of the rainforests through various organizations, which helps save the rainsforest, reduce carbon emissions, preserve indigenous lifestyles (and lives), saves habitat, etc., etc.

    That said, if I can buy an annual carbon offset today for $99, as more people sign up, will that price necessarily increase? It could also come down as the price of alternative technologies comes down.

  17. 17
    Martin says:

    The only solution is to reduce the energy consumption and to switch to renewable energy, like windpower. In Germany the renewable energies produce almost 11% of the electricity consumption. The gouvernment plans to produce about 30% in the year 2020. Thats the only way which is possible to go. Nuclear power is dangerous (Three Miles Island, Chernobyl) an Uranium will run out in 60 years.

  18. 18
    jim edwards says:

    This idea could, perhaps, be good if a relative few people buy the credits and retire them. It’s a wealth transfer to those companies that reduced emissions either because they invested in cleaner technologies – or because they shut down their manufacturing facilities and laid off workers. Some of these companies selling excess credits could just be poorly run companies that no longer have a market for their products. If a hypothetical billionaire or large NGO invests a huge amount of money in buying and retiring credits, though, that would be a disaster for those countries that have signed on to participate in carbon trading.

    Small changes in supply can have a large effect on price. [See, e.g. the electricity crisis in California, a la Gray Davis and Enron…] Marginally increased credit prices will, of course, greatly incentivize the application of more efficient technologies in industrial and other settings. At some point, however, there are no cost-effective solutions to increase efficiency – at least with contemporary technology. A sudden, unforeseen, retirement of too many credits is essentially equivalent to an oil embargo – with one critical exception – the government of the country affected can and will do something about it [If they want to stay in power…].

    If France, say, finds itself without enough credits to go around it will have two choices: allow ~10% or more of its businesses to shut down and move to countries outside Kyoto [Like China and India, as the President keeps reminding us.], or else withdraw from the system of Carbon Credit trading altogether. They’re not going to allow the French people to go without Food, Medical care, Clothing, etc. that their G-8 economy provides. We can’t suddenly ‘wish’ enough clean, efficient technology into existence to match artificially reduced Carbon caps. Business will invest in technology as their earnings allow and the observable trend in Carbon prices dictates. It is likely that any large effort to “Buy and Retire” would kill Kyoto.

  19. 19
    Jamie Cate says:

    The May 2006 issue of Wired Magazine had a “CO2 footprint” calculator with a sidebar on carbon offsets. According to them, one could feel good about paying $1 for every 256 lbs of CO2 emitted per year. Honestly, this strikes me as absurd. What is the half-life of CO2 in the atmosphere? Shouldn’t we amortize the cost of our present emissions over their lifetime? What would the cost really be if we took this approach?

    Just for the record, what are the best estimates of the half-life of the excess CO2 being added to the atmosphere from human sources?

    [Response:Long. I wrote a post about this question here. The money is not to pay for the damage from climate change, but to pay for a decrease in CO2 emissions to offset what you have just released. I thought the Wired calculations seemed optimistic too, but they topped out at $200 per year, not that different from David. ]

  20. 20
    Johnno says:

    I would contrast the difficult and uncertain future of a tree seedling with the certain fate of jet fuel in an engine or a ton of coal on its way to a boiler. Therefore I think the emphasis must be on debits not credits. When every country has a properly managed cap-and-trade scheme it should make CO2 intensive goods cost relatively more. It should raise the ticket price of air travel more than rail for example and make windpower more competitive with coal fired electricity. This is a pure disincentive effect uncompromised by the prospect of a questionable offset. People should plant their own trees or conserve in other ways, not buy these credits.

  21. 21
    Dan Hughes says:

    This source:

    gives in the table:

    Table H.1cco2 World Per Capita Carbon Dioxide Emissions from the Consumption and Flaring of Fossil Fuels, 1980-2003 (Metric Tons of Carbon Dioxide)
    Table Posted: July 11, 2005
    Next Update: June 2006

    the value of 19.95 metric tonnes of carbon dioxide per capita for the United States for the year 2003. The value has hovered around 20 metric tonnes since about 1980. I would be surprised if it has gone up by 20 percent in 2 years.

    Does the value 24 tons, assuming that is 24 metric tonnes, include sources other than consumption and flaring of fossil fuels? Thanks

    [Response:20 is probably right. I thought I saw 24 someplace, but looking closer, I’m finding 20 also. Forgive me. David]

  22. 22
    Karen Street says:

    I find myself puzzled by the comments that we should exclude certain solutions because we can solve the climate change problems without them. I heard John Holdren say at the China US Climate Change Forum ( that temperatures have gone up 0.8 C, we are committed to 0.6 C more, we may reach 2 C by 2050 and 3 C or more by 2100. At 1.5 C, the polar bear and coral reefs are committed to extinction, at 2 C we may experience catastrophic sea level rise of 3 – 4 m/century, and at 2.5 C, agricultural productivity will decline pretty much everywhere on Earth.

    This will be webcast soon, hopefully this week.

    I hope that we try every solution. Even biofuels which are likely to have land use and water implications past a certain point.

  23. 23
    Jamie Cate says:

    Re David’s comment on 19. OK, now the idea of a “carbon offset” is more clear to me. And thanks for the link to CO2 half-lives. However, it is hard to imagine that the cost of carbon offsets would be less than the cost of the fossil fuels used as inputs to a typical American lifestyle. I would estimate that a more reasonable offset would cost in the thousands of dollars, not hundreds.

  24. 24
    Eric Carlson says:

    [Disclosure: I am the Executive Director of]

    Kudos to David Archer for focusing on the ease and affordability of carbon offsets. Too often the stories are about SUV guilt when the real story of carbon neutral living is empowerment. Without any government regulation or subsidies any individual or business can reduce their climate impact to zero. believes we can also change the world.

    In a country of 300 million people, imagine if just 2 million offset their carbon footprints with wind energy. They would facilitate so much wind power we believe the price of new wind would drop below that of new coal. This would change energy investment in the US and the world. Utilities would buy renewables for economic reasons and the person who never offset his carbon footprint would get more wind energy every day as the utility mix increased.

    Is this possible? Absolutely. Wind makes up just .5% of US electricity so any doubling or quadrupling has enormous price implications.

    Also, we are quite contrarian here but we don’t see the need for CO2 offset prices to increase. If efficiency were the only solution you’d eventually run out of low-cost efficiency reductions. But with renewable energy, as we increase supply price drops. We believe and hope $5.50 per ton ($4.30/ton to offset 23 tons) will be a highwater mark.

    Regarding reforestation, we understand some people have problems with each type of offset: wind vs. birds, efficiency vs. additionality, and trees live and then die. While a well-managed forest pumps more CO2 into the soil and sequesters it, our stance is to give people the choice (hey, it’s your carbon) of projects they wish to support: wind, efficiency or reforestation.

    Our apologies for the cheesy pen.

    [Response:Not at all. It was the only humor I was able to work into this post. That and the line about the tent, I guess. David]

  25. 25
    Janice Kent-Mackenzie says:

    I like the idea that individuals – even if governments won’t – could obtain carbon offset certificates by subscribing to fund’s whereby they can put money to their preference for offsetting carbon emmission, ie PURCHASE or OTHERWISE PROTECT IMPORTANT NATURAL CARBON SINKS (ie rainforests in the Amazon & Borneo) PLANTING TREES FOR RE-FORESTATION (doesn’t the latest research show that establishing trees actually emit more carbon than they lock up?) or RESEARCH/BUILD ALTERNATE ENERGY SYSTEMS (wind farms, solar energy technology, tidal power etc) or RESEARCH/DEVELOPMENT OF SAFER NUCLEAR OPTIONS.

    May I forcast that the contributions of millions of people all around the world joined together would make a VERY substantial difference to our otherwise poor prognosis for the future. However as the original posting pointed out…this new ‘industry’ would need to be strictly regulated & supervised to prevent scams. May I suggest that they all be authenticated and chartered by a world body of some sort, ie the UN.

  26. 26
    Matt says:

    Europe as an emissions allocation market, a fairly volatile one lately. In a future world of litigation, Europe, by reducing per capita emissions is in a much better positon to recover damages via trade taxes or seizure of property.

    In other words, say, the state of Florida sued China to recover damages due to global warming, then China’s response would be, “What has the USA done to curb emissions?” A perfect line of defense.

    Our ability to use the threat of litigation depends upon the accuracy of climate models, as well as the perceived value of a cooler planet. Hence, the CEI, “Co2 is life” campaign is an effort to persuade future jurors. CEI, however, is stuck in one sense, they already acknowedge that human’s are partly to blame, and they feel property damage litigation is the better approach to environmental problems in general.

    If a natural wildlife federation bought access rights to, say, arctic polar bears or arctic fisheries, then, because of polar amplification, this wildlife federation could find easier cause for a lawsuit. Polar amplification enhances the probability of a damage award, and once the first victory comes, each new victory can squeek out another piece of the general liability.

    A few victories and carbon markets will be active indeed.

  27. 27
    Vincent Belovich says:

    I’m sorry I don’t remember the source, but I read a while back that Habitat for Humanity can now build what are called “near-zero-energy” homes–at least in the sunbelt. If they can do it, I would think that other home builders that have more than just volunteer labor could also do it. Luckily, there are some architectural firms that now design homes and small buildings toward that goal.

    I would like to suggest that probably the best way to reduce CO2 is to design systems that demand less energy to begin with. Conservation is more than just turning off light bulbs in uninhabited rooms. It’s a whole new way of thinking and designing.

    When a home or building is designed to minimize energy needed, it’s a lot more cost-effective to meet that demand with renewable energy. Maybe we should push for our local building codes to require super efficient designs and photovotaics on new homes built in the sunbelt? Windmills for those homes in tornado alley?

    As an added benefit, the less energy we need for new homes and buidings, the less demand there will be for nuclear power, so we may be able to shelve that debate for a long time.

  28. 28
    Shine says:

    I didn’t read all the comments so I didn’t see if anyone mentioned.. but I know of at least one farmer here in New Zealand who got rid of most of his stock and now gets his livelihood from selling “blocks” of carbon offset from his farmland (which , from memory, is somewhere in the Marlborough Sounds area)…
    It certainly does seem like an airy fairy kinda way to make a buck but he’s doing it and doing better than when he had stock on his land by all accounts!

  29. 29
    Eachran says:

    CO2 is merely one “externality” whose social cost is not built in to the price of goods and services : there are others. Some are dealt with by forbidding their use (cigarettes in public places or CFCs, for example, which are considered to have an infinitely high cost ) and others by limiting their presence in everyday articles ( limits on pollutants of all sorts to what are believed to be tolerable levels imposing some costs on producers).

    There is no suggestion to do the impossible and forbid the emission of CO2, but to impose a “carbon levy” to “cap and trade” and internationally to “cap and converge” to give developing countries similar rights to our own in the use of natural resources – those proposals which involve market based solutions seem a fair way of going about things. There has been a suggestion from Janet Kent-Mackenzie at post 25 that the U N might be used to police the market. Well, the UN doesn’t have a very good record in these sorts of things and it would take too long to put it right. An alternative proposal would be to use the existing WTO which has an experienced secretariat in dealing with international markets, and currently a good and intelligent bureaucrat running the show. If WTO resources are considered insufficient then there are plenty of people at the World Bank (currently in the throws of self-examination) or the IMF who might like to do an important job for humankind.

    My guess is that policing the CO2 market will be only the start of international action on a number of related issues like, pollutants in general, river system management and water resources and the exploitation and use of so-called strategic metals and minerals.

  30. 30
    Catherine Jansen says:

    As I see it, there are the following options for those of us who are concerned about climate change.

    1. Take personal action to reduce emissions, including energy conservation and possibly carbon offsets.

    2. Take political action, such as writing letters to politicians or becoming involved in a local climate project. This might include donating to an environmental group that will take political action for us.

    3. Raise other people’s awareness of the problem of climate change to try to reach that “critical mass”. This could also include donating to a group (not many that I can find) that produces information or commercials about climate change.

    Personally, we’ve taken steps towards efficiency and conservation in our own home, and written those nagging letters to our federal and provincial politicians. Those things are free, of course. But when it comes to shelling out money, I’m reluctant to – say – trade in our Ford Focus for a Toyota Prius, because of the huge cost involved. Considering the price difference between the two, a fraction of the money would do far more good being donated to a carbon offset fund or a worthy climate change group. (Not that I’m criticizing the Prius.)

    Wish I could find a worthy recipient for advertising dollars, since I think public awareness is the biggest hurdle.

    Carbon offsets seem like a cost-effective way to do something positive. Thanks for your great article.

  31. 31
    Mark Shapiro says:

    What an absolutely fascinating, rich, and necessary discussion. The caveats about verification, certification, effectiveness, and permanence of offsets mentioned in the comments give pause, but I salute the pioneers who are creating them as well as those who use them and critique them.

    I have long been a fan of efficiency and renewable energy sources, and as several commenters have pointed out, they are complimentary. The net-zero energy houses that Vincent mentioned in #27 are an excellent example, and I look forward to hearing the webcast of the China US Climate Change Forum from comment #22. Efficiency and renewable technologies are improving so quickly that when you see skeptics claim that they “can’t possibly” solve the problem, it’s hard to know exactly how out of date they are.

    Simple conservation also has a role. In fact, it is the truly painless option. No matter how effiicient your light bulb is, or what percentage of its power comes from wind, when you turn it off the money you save is like tax free income.

    William Nordhaus, the economist you cite, recommends a uniform carbon tax (UCT) as the best way to encourage all solutions, such as efficiency, renewables, and conservation.

    As for nuclear, Tim in # 9 (linking to the Hertsgaard article) shows that it’s much more expensive than efficiency and wind. Perhaps more important, it is the one energy source that requires huge government bureaucracy, regulation, and subsidies. Efficiency and renewables are much more consistent with freedom and individual rights and responsibilities.

  32. 32
    Adam says:

    I thought RealClimate “doesn’t do policy” ;)
    These are the sort of discussions I was envisaging on “RealSolutions” as someone else termed the mythical website (not necessarily saying “we should do this” but “how well does this approach work?” and “what is the current state of this technology?” etc.

    Anyway, and more seriously, from #2:

    “but the ‘plant a tree and feel good about flying’ idea (popular in the UK) is dodgy”

    My understanding is that trees take some years to soak up the CO2 so you can only really off-set against future emmissions. The extra CO2 you’ve currently emmitted is still around (in terms of quantity not actual CO2, obviously) waiting to be absorbed over the years that that tree grows. And that’s ignoring the situation (as mentioned elsewhere above) that the trees may not last that lonng and may get burnt, etc. re-releasing the CO2.

    That’s not to say that planting trees shouldn’t be done. If they become a sink, then they could be an added bonus on top of not emmitting in the first place.

  33. 33
    Hank Roberts says:

    > 12 comment by Raypierre about nondegradable organic plastics as a sink:

    Nature is too clever for us there.

    One example, hearsay (no cite, not published) — when I was an undergrad, a friend was working in a faculty member’s lab where they were testing soils, hoping to select a microorganism capable of consuming DDT and producing nontoxic breakdown products. They eventually did find one — which they ended up destroying quite carefully. The one they’d selected for turned out to have a similar appetite for other common plastics including PVC (polyvinyl chloride, the common wire insulation used in our electrical distribution system, phone system, etc. — it degraded PVC into other toxics that were more mobile, not to mention the short circuits caused as the insulation broke down).

    Mother nature wants her toys back.

  34. 34
    Ken Johnson says:

    I think Carbonfund’s so-called “carbon offsets” can be more accurately characterized as “charitable donations”. While such donations are laudable, charity and voluntary action are not going to achieve the reduction in GHG levels required for climate stabilization (e.g., 80% reduction from 1990 levels by 2050, as defined by Governor Schwarzenegger’s Climate Action initiative). There’s no evidence that Kyoto-type cap-and-trade systems can, either, unless environmental objectives take precedence over cost considerations and GHG emissions are actually capped at a sustainable level – which they never are. Climate sustainability might be attainable at acceptable cost, but trying to use cap and trade to implement a cost-constrained policy doesn’t work because you can’t predict in advance what minimum cap level will satisfy the cost constraint.

    Climate policy is fundamentally a constrained optimization problem. You can construct policy to minimize costs subject to a fixed emission constraint (if environmental goals take precedence over cost acceptability), or to minimize emissions subject to a fixed cost constraint (if cost control takes precedence – which it always does). Cap and trade represents an emissions-constrained policy, whereas emission taxes are cost-constrained; but there is also a more significant difference between emission caps and taxes: Cap and trade is typically constructed to be revenue-neutral within the regulated industry (i.e., emission allowances are freely distributed, for example, in proportion to energy output), whereas taxes are not. Consequently, tax-based initiatives in the U.S. are typically “dead on arrival”. However, the difference is not fundamental: Emission allowances can be auctioned (and the proceeds used as tax revenue). Conversely, emission tax revenue can be refunded (e.g., in proportion to energy output so that the tax/refund ratio is proportional to emission intensity). The Swedish acid rain program, for example, uses a refunded tax to regulate stationary-source NOx emissions. (Swedish power plants typically exhibit much better NOx emission performance than that of the U.S. and other countries.)

    I think scientists (climate scientists, in particular) could help bring a level of analytic discipline and intellectual acuity to the subject of climate policy that is currently lacking, and I would welcome more discussion of this topic on RealClimate. Here is one puzzle that RealClimate readers might ponder: Governor Schwarzenegger’s Climate Action Team recently issued a report asserting that “the Governor’s targets are achievable” and detailing specific strategies for achieving the targets ( Look through the report and see what evidence there is that the recommended strategies will achieve the 2050 target, which is the only target that is based on the climate science. (For what it’s worth, my own views are posted in the Climate Action Team’s public comments area.)

  35. 35
    Eli Rabett says:

    It does appear that nuclear power generation decreases CO2 emissions by about a third. You can clearly see this by comparing emissions from France to that from Germany and the UK. There is a short table at with a link back to a longer table at the UN Statistics division.

  36. 36
    Hank Roberts says:

    Industry plans for large new ethanol plants — fueled by burning coal, fueled the old dirty way.

    US Congress plans to remove the burden of clean air regulation from companies planning new ethanol production — so it can be made fast using cheapest and dirtiest fuel source.

  37. 37
    teacher ocean says:

    Re: Hank Roberts

    That’s a scary story!! I didn’t think things like that happened in real life :) But a very nice analogy to fiddling around with Earth’s climate. We don’t quite understand what we are dealing with when pumping CO2 into the atmosphere, and we should stop messing with a system we may not be able to control. To the skeptics: I don’t mean we should stop doing climate research or let nature take its course; I mean we should minimize emitting and find cleaner alternative enrgy resources. Fast. And actually do more research and understand the system better.

  38. 38
    Roger Pielke, Jr. says:

    David- Kudos for raising this intresting policy subject;-)

    From my perspective, it seems that carbon offsets are not quite accurately described here. The idea behind carbon offsets is both “cap and trade” but also a second approach based on the same logic behind the CDM of the Kyoto Protocol. As I understand them, carbon offsets do not reduce carbon emissions directly, but in principle, from what they would have been absent the offset investment.

    The idea behind the “cap and trade” logic — as described by — seems to be that where there exists a market for carbon, they will purchase (or otherwise earn) rights to emit, but not sell those rights, taking them off the market, and thus reducing supply of emissions rights, thereby in theory increasing the price (which in turn will reduce demand). Whether or not this actually has a discernible effect on real world emissions depends upon whether the buyer of carbon emissions rights can actual act as a “market mover.” If is the equivalent of Warren Buffet in the carbon market, then they may be onto something. On the other hand, if they are small relative to the market, they might be more like you and me joining together to take Google shares out of the market in hope of driving up the price. Whether or not such a strategy represents anything more than a well-intentioned idea, seems open to vaild debate.

    The second approach is focused on offsetting possible future emissions. For instance, to take a simple hypothetical example, carbon offset money might be used to built a wind power plant rather than a coal power plant, thereby “offsetting” the future emissions from the coal plant. This does not reduce actual emissions but reduces the possible increase in future emissions.

    My sense is that carbon offsets seem like a pretty indirect and inefficient way of achieving emissions reductions. After all, where carbon markets exists one could simply eliminate the middle man and buy emissions rights directly and paricipate in the market. I wonder how it is that the organizations you linked to can gain rights to carbon emissions at far less than the market price in actual markets. Something doesn;t add up. I suppose the idea is that if enough people participate then carbon markets will move financial markets, etc.

    The above is just speculation, I’d be interested to learn if there are any rigorous studies of the efficacy of carbon offsets as a policy instrument as compared with more direct means of reducing emissions.

  39. 39
    Damien says:

    “Uranium will run out in 80 years”.

    Current reserves of U-235 may run out then. U-238 is 0.7% of natural uranium; the remaining U-238 can be used in breeder reactors, and that 80 years turns into 8000 years. And that’s the high-quality ores we know about. There’s more in seawater, and the U in the crust (accessible through mining, or in the long run through waiting for erosion and getting it from seawater) is enough for at least millions of years, possibly a billion.

  40. 40
    Ken Johnson says:

    Re #39
    … and then we would have a cheap, inexhaustible and essentially limitless supply of weapons-grade plutonium. Is that the “stairway to heaven” – or to hell?

  41. 41
    Damien says:

    Not necessarily that cheap. Current reactor design makes Pu-240 mixed in with the Pu-239, ruining it for weapons and even harder to separate than the uranium isotopes. Some advanced designs strive for a closed-cycle: uranium in, fission fragments out, no free plutonium. OTOH pebble beds might make Pu-239 easier to get, by encouraging constant recycling and potential extraction of low-240 Pu-239.

    *shrug* It’s a concern, but it hardly seems like a killer. Inspections continue to be a useful tool. And if there are tons of uranium out there, which there are, it won’t be that hard for a high-tech country to get U-235 if they want it. Or get thorium and make U-233 which should also be good for bombs.

    As far as existential risks go I’m more concerned about diseases, natural or man-made.

  42. 42
    John says:

    So with nature responsible for the vast majority of CO2 emmissions who is going to pay for that? I am willing to accept $1 instead of the $99 for those willing to cover the cost that Earth releases.

  43. 43
    teacher ocean says:

    The whole point is that we evolved on an Earth which has balancing mechanisms to deal with the CO2 the Earth releases. Now we are messing around with the balance by releasing more CO2 in a much shorter time frame than the balances can handle.

  44. 44

    It is important to recognize several issues when talking greenhouse gas emissions offsets. First amongst them is “additionality.” An offset (i.e., emission reduction project) requires that you set a business as usual baseline of emissions and then estimate emission reductions relative to that baseline. These reductions are then considered additional. Setting that baseline is far from an objective process, however. Groups like Carbon Fund, TerraPass, AtmosClear, and many many others that sell offsets in the retail voluntary market use various formulas for determining additionality and then verifying the reductions achieved (other 3rd parties often do this verification such as Environmental Resources Trust).

    So, if you buy offsets from someone, a smart shopper needs to be very clear on what she is buying. They are not all created equal. (Although the people working in this area, are for the most part, sincere in their goals.)

    The concept of an offset assumes that the person selling the emission reduction would not have implemented the project anyway (because of regulation or other factors). So the voluntary emission offsets markets exists because we don’t have regulation (e.g., such as a cap and trade program). Once we do have such a program here in the United States, we will all be able to buy GHG allowances and have them retired just like under the SO2 trading program run by the U.S. EPA now. Voluntary efforts will not solve this problem. They will not even come close. So by all means, do your research, buy verified offsets of high quality and additionality, but don’t let it reduce by one bit your sense of obligation to press for collective action on the part of governments.

    PS: CO2 from beer is biogenic. It is produced by yeast feeding on sugars in the grain. It is not a net source of GHG emissions to the atmosphere.

    [Response:In good beer, no doubt. I’ll bet we in the U.S. drink Frankenbeer with fossil CO2. David]

  45. 45
    John says:

    Dear teacher ocean,

    At just 2.5% of total CO2 release that humans are responsible for I find it hard that the Earth can’t cope with the increases. According to IPCC figures humans account for about 5.2GT (gigaton) of CO2 and nature accounts for about 210GT. If humans realsed double the amount of CO2 (to 10GT) this would only be an increase of 2.3%. An average volcano relases more then this during an eruption yet Earth can deal with that. Finally, absoprtion rates in the atmosphere reach saturation points and are logarithmic where additional CO2 releases account for less solar energy capture.

    [Response: This contains a number of misconceptions. The volcanis source is trivial compared to human emissions (as discussed and in even more detail ). The 2.5% number is just irrelevant – the actual number is 30% of CO2 – as discussed and finally, logarithmic effects of increasing CO2 are very well known and incorporated into all future projections. – gavin ]

  46. 46
    teacher ocean says:

    I hope the climate scientists on board will answer you with more details, but it isn’t so much about amount, as it is about the rate of release. Oceans respond slowly to perturbations in atmospheric CO2 concentration. David Archer says about 10-25% of our CO2 emissions will remain in the atmosphere for 100s of thougsands of years in his first post to realclimate and in the other current thread called “Positive feedbacks from the carbon cycle.”

    So just 2.5% of release of CO2 in the atmosphere in how much time? A day, a week, a year? Volcanoes release a lot but humans release every day, all the time. So you need to look at the rate of release not just percents.

    Oceans regulate atmopheric CO2 by dissolving carbonates in deep sea sediments. That takes time. Oceans circulate slower than the atmosphere, that takes time. And another question is do the oceans have enough carbonate to compensate for the large quantities of CO2 we are releasing? If they run out of carbonate sediments, the oceans will begin to exhale CO2 as well.

  47. 47
    Damien says:

    “At just 2.5% of total CO2 release that humans are responsible ”

    Cite, please.
    gives human output as 150x that of volcanoes.
    which for comparison also has our sulfur dioxide dwarfing that from volcanoes, despite our trying to cut back on sulfur emissions, while burning more and more fossil fuels.

  48. 48
    Hank Roberts says:

    At the level of dissolved CO2 where the oceans become acidic enough to dissolve carbonates, that will kill the marine organisms that make their shells out of calcium carbonate, and everything above them on the food chain.

  49. 49
    John L. McCormick says:


    John, there is much you can learn from the many posts and comments on RealClimate. PLEASE, take the time to educate yourself a bit and come back when you have. That’s my 2 cents.

  50. 50
    Hank Roberts says:

    Oh, and I missed the obvious.

    #44, John, you say: “CO2 (to 10GT) this would only be an increase of 2.3%. An average volcano relases more then this during an eruption ”

    Whose word did you rely on, that led you to believe this? What’s the source of the information you believe about this?

    It’s important to track down what people believe are the true facts — where they came from, who originated the information.

    I found that statement only two places, with a quick search:

    Neither of them is a reliable source in my opinion. Your source may be reliable — who is it?