A recent article by CNN describes U.S. climate “czar” John Kerry’s latest plan to use carbon credits to raise enough money to help developing nations recover from alleged climate change impacts, as well as fund the development of renewable energy projects in “vulnerable” nations. His plan is wrong on multiple levels. Even if carbon emissions were a problem, as CNN points out, carbon credit programs are at best examples of “greenwashing,” that don’t actually reduce emissions. What’s worse, they also act as a regressive tax on those who can least afford it.
In the article, “Kerry announces – and is immediately criticized for – a new plan to raise money for climate action,” CNN reports that Kerry, appointed by President Joe Biden as the first United States special presidential envoy for climate, is pushing carbon credit schemes at the COP27 climate conference in Egypt this week. A team of 5 CNN writers contributed to the article. They write that Kerry announced a “new, controversial” plan for helping to fund renewables projects in developing countries, which is to institute a carbon credit program for companies to trade in.
The plan has not been received particularly well. Critics say the idea will not actually lead to reduced emissions. CNN writes, “the plan has already attracted criticism because of the way it will be financed – with money raised in sales of carbon credits, which allow companies to pay for someone else to cut their planet-warming emissions, instead of cutting their own.”
CNN goes on to explain that carbon offsets and credit programs are forms of shifting the responsibility that could, as United Nations Secretary-General Antonio Guterres put it, “undermine genuine emission reduction efforts.”
CNN and Guterres are right to raise this issue, because companies and governments have historically cynically taken advantage of similar schemes. For example, as discussed in the Climate Realism post “Delta Airlines Makes False, Greenwashing Claim about Becoming ‘Carbon Neutral’, Delta attempted to “greenwash” their aviation emissions. Delta promised to offset emissions from jet exhaust and other operational emissions “through carbon offset project investments that maintain, protect and expand forests.”
The problem is that jet emissions are produced now, and Delta’s carbon offsets were little more than IOUs that promised to plant trees that may sequester some CO2 sometime in the future. To those truly worried about current emissions, the offset “solution” doesn’t functionally stop contributions to current warming.
At a larger scale, and specifically for carbon credits, the “Joint Implementation” scheme of the Kyoto Protocol, a carbon trade program implemented by the United Nations, was quickly revealed to be detrimental to actual emission reductions. Under the scheme countries generated “Emission Reduction Units” (ERUs) from projects that purported to limit greenhouse gas emissions or even removed carbon dioxide from the atmosphere, selling the ERUs to other countries.
The Stockholm Environmental Institute found that certain countries, especially Ukraine and Russia, were generating false ERUs by ramping up emissions-causing activities, then “reducing” them back to original levels, and selling the ERUs to Europe’s carbon market. The report also “found that about 80 percent of ERUs issued came from project types of low or questionable environmental integrity.”
Carbon pricing schemes, including carbon offsets, credits, and cap-and-trade, are not new ideas, nor have they worked as intended where they have been implemented. They also tend to have the effect of increasing energy costs, which is often an anticipated result. Tim Benson, policy analyst at The Heartland Institute, broke down some of the effects of these kinds of programs after they were implemented in the United States, including in California, and northeastern states that make up the Regional Greenhouse Gas Initiative (RGGI).
“According to the U.S. Energy Information Administration, retail electricity prices in the 11 RGGI states and California are currently 40 percent higher than the U.S. average,“ writes Benson.
He also points out that RGGI states also saw a 12 percent drop in the production of goods, a 34 percent drop in energy-intensive goods manufacturing, and a 64 percent increase in electricity costs after implementing cap-and-trade.
Plans like the one proposed by Kerry have proven ineffective at reducing greenhouse gas emissions. In multiple instances, they have proven to be nothing more than a fraud. In all instances, however, they have resulted in higher energy prices, placing undue burden on lower income countries and citizens. CNN focused on the former point, that carbon emissions are not effectively reduced by these schemes, but ignored the latter, neglecting to explain that they also raise the cost of energy for the public.