The non-partisan Congressional Budget Office (CBO) issued a report on August 3, 2009, that provides an analysis of the costs of carbon offsets in the climate change legislation that has passed the House of Representatives and currently awaits Senate action.Under the House legislation, CBO reports that annual savings could reach 70% per year from 2012 through 2050. However, CBO reports that it is unclear whether all the mechanisms implemented will actually cut pollution. Among the concerns expressed by CBO is the difficulty in estimating the amount of carbon that is offset from planting a tree or buying a track of forest land in a developing country.
Timothy Gardner, in his story for Reuters on the report, writes that offsets allow polluters to “invest” in projects that reduce greenhouse gases instead of facing regulation. In theory polluters would invest in the offsets when it is more economically wise than cutting their own pollution. Offsets can include agricultural practices like no-till farming, planting trees, or capturing and burning or using methane gases released by farm animals.
The bill passed by the House of Representatives aims to cut greenhouse gas emissions by 83% (based on 2005 levels) by 2050. The Senate is set to take up climate change legislation in October. While CBO notes that the cost in the US for the program with offsets is estimated to be $101 billion in 2030, that number is 60% less than the costs would be without the offset mechanisms. In 2030 a plan that allows offsets would be $40 per metric ton of carbon dioxide, while one that did not would costs $138 per metric ton.
To read Gardner’s article on the Reuter’s website click here.
To visit the webpage for the Congressional Budget Office click here. To access the CBO report click here.
Posted: 08/06/09
