Picture a savvy land developer who has just purchased 1,000 acres of forestland on a city’s outskirts. He plans to cut most of the trees down to build hundreds of new houses, but he wants to be able to market his “green” credentials. So he lights on a plan. In his last development, he left five trees standing on each lot. Now he’ll leave 10.
Since twice the trees will remain, twice the carbon will be stored. The developer hires a company with expertise in carbon marketing. The contractor quantifies the “additional” carbon stored. An independent auditor verifies the project. And presto! The developer is selling carbon credits to help others “offset” their greenhouse gas emissions.
Then the developer goes before the local municipal council and gets a zoning variance allowing him to build houses twice as large as before. Despite the fact that twice the trees must fall to build bigger houses, the developer still gets to sell his carbon credits.
Come on, you say, that can’t happen. But it can. In fact, very similar things are happening right now, and they’re costing our cash-strapped schools and hospitals millions of dollars so that the provincial government can make the dubious claim of being “carbon neutral.”
Thanks to the recent release of information that the Crown corporation, Pacific Carbon Trust (PCT), fought to withhold, we now know just how much private corporations received in public dollars to allegedly retire public sector greenhouse gas emissions.
By far, the most money paid by schools, hospitals and the like was for carbon credits purchased by the PCT from one of BC’s biggest logging companies. For “conserving” tracts of trees, PCT paid TimberWest a tidy $5.6 million. The 2010 project has striking parallels to the scenario just described.
It rests on the claim that TimberWest “conserved” forests that it otherwise would have logged. For this, the company sold 560,925 carbon credits to PCT.
Because PCT holds a monopoly (the BC government’s “carbon neutral” commitment requires that all public agencies must offset their greenhouse gas emissions by buying credits, and must purchase them only from PCT) public agencies were forced to pay PCT $25 for each of the TimberWest credits.
The trouble is that on the open market that year, the average carbon credits sold for just $6. Thanks to PCT’s mark-up on TimberWest’s credits, our schools, hospitals and the like paid $14 million, or more than four times the going rate.
Worse, in addition to lost services for school kids and hospital patients, that $14 million bought little if any climatic benefit. Here’s why.
Just as it’s a mistake to focus on the “additional” trees protected in that hypothetical housing development mentioned above while turning a blind eye to the size of the houses built, so it’s a mistake to focus narrowly on the trees that TimberWest allegedly saved while ignoring the company’s overall logging plans.
You see, TimberWest told its own shareholders that it had little interest in logging the trees it later “conserved.” It also told those same shareholders that it planned to accelerate its logging elsewhere. More troubling, PCT knew such facts prior to cutting TimberWest its cheque.
Other corporations to benefit from PCT’s largesse were Encana Corporation (more than $1.6 million), Spectra ($555,965), International Forest Products ($613,890), and Blue Source, a self-proclaimed “leading marketer” of carbon offsets who brokered a $1.6 million sale for energy companies Canadian Natural Resources and Apache Canada.
For this, our schools and hospitals shelled out another $6.84 million.
This policy is not in the public interest. Worse, it’s open to abuse. Why, for example, did PCT pay Encana nearly $3 more for its credits than for anyone else’s? Just asking, because PCT’s explanation that some projects have more “value” than others raises more questions than it answers.
The tragedy is that such news may make people throw their hands up in despair, which is precisely what we don’t need in the face of overwhelming evidence that our climate is changing.
A fairer, more transparent way to deal with climate change would simply be to apply BC’s landmark carbon tax to public and private sectors alike, ensure that all emissions are taxed (including the currently exempt production emissions from natural gas companies like Encana), and then offer our schools, hospitals and the like full rebates as long as the rebates were spent on actual energy savings. This would do two things simultaneously, lower greenhouse gas emissions and lower public sector operating costs.
Now that’s something that could be justified. The same cannot be said for the fiasco that the PCT and the murky world of carbon offset trading in BC has become.
Ben Parfitt is a resource policy analyst with the Canadian Centre for Policy Alternatives' BC Office.