Carbon offsets draw heated debate

The auditor general's carbon offset report is yet another case in which the Liberal government made a bad situation and make it worse.

That delayed, then discredited, carbon offset report from Auditor General John Doyle is yet another case in which the Liberal government manages to take a bad situation and make it worse.

They’ve clearly got their noses knotted over Doyle’s in-your-face criticism of the management of carbon offsets and the acclaimed neutrality factor.

Back in the day when Gordon Campbell was premier and emissions reduction to combat global warming was a hot button issue, the provincial government announced in its 2007 Throne Speech that it would take an aggressive stand to reduce emissions of greenhouse gases. Bill 44, the Greenhouse Gas Reduction Targets Act called for a 33 per cent reduction of GHG emissions by 2020 and 80 per cent by 2050. Public sector agencies had to become carbon neutral by 2010.

In July 2011 the province announced it had achieved its goal.

Doyle’s report An Audit of Carbon Neutral Government stated it had not.

“British Columbia became the first carbon neutral government in North America in 2010 and is recognized as a world leader in climate actions – I stand by our achievements,” said Environment Minister Terry Lake.

“This claim of carbon neutrality is not accurate,” wrote Doyle.

According to Doyle’s report, the offsets purchased to meet the neutrality goal were not credible. Doyle looked at two projects which accounted for nearly 70 per cent of the purchased offsets, one being the Darkwoods Forest Carbon Project between Nelson, Salmo and Creston and the other being the Encana Underbalanced Drilling project neat Fort Nelson.

“Offsets can only be credible in British Columbia if, among other things, the revenue from their sale is the tipping point in moving forward on a project,” said Doyle. “It must be an incentive, not a subsidy, for the reduction of GHGs.”

He added that, within a complex system of dense terminology and calculations lies one simple question: Would the project have happened in the absence of carbon finance? “Regarding the projects examined, the answer is a straightforward “Yes”,” he wrote.

But, first, what are offsets?

The World Resources Institute defines a carbon offset as “a unit of carbon dioxide-equivalent (CO2e measured in tonnes) that is reduced, avoided, or sequestered to compensate for, or offset, emissions occurring elsewhere.”

If one party lowers its greenhouse gas emissions, the amount lowered becomes a CO2e credit that can be sold to another party to mitigate, compensate, or offset, their own emissions. But the carbon offset trade cannot be “business as usual”. The project can only go ahead with the carbon offset credits in play. This is the all-important ‘additionality’ factor. Carbon offset credits are in addition to all other normal business readied for the project and they must be validated by several independent agencies. This is what allows the climate to be the ultimate net beneficiary.

In B.C., offsets are marketed by the Crown corporation Pacific Carbon Trust created in 2008 to support the growth of offset trading. According to Doyle’s report, the acid test is ensuring that those entities buying and selling actually further their projects because of the offset trade, not in spite of it.

For provincial public sector agencies (schools, colleges, hospitals, etc.,) to become carbon neutral, it was calculated that their GHG emissions for 2010 were 814,149 tonnes. In total 128 public sector organizations provided $18.2 million to PCT to purchase offsets on their behalf. They paid PCT $25 per tonne of CO2e they generated and, in turn PCT used the funds to purchase offsets.

Darkwoods sold 450,000 offsets to PCT and Encana sold 84,641 offsets. But according to Doyle, “Neither project was able to demonstrate that the sale of offsets was needed for the project to be implemented.”