National Press Club

Economist, Environmentalist Extol Pollution Offsets

July 1, 2009 | By Mark Schoeff Jr. | mschoeff@workforce.com

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An economist and an activist called pollution “offsets” an effective and efficient way to cut greenhouse gases and praised a climate change bill approved last week by the House that includes them in a cap-and-trade system at a June 30 Newsmaker.

A company, organization, government or individual that is producing pollution can buy carbon-offset credits that finance projects elsewhere that bolster the environment.

Robert H. Frank, a professor of economics and management at Cornell University, dismissed criticism that offsets are “indulgences” that enable polluters to continue harmful practices. He said that they produce a net gain for the earth because reducing pollution in one place
is as good as reducing it in another.

“All we care about is the total amount of carbon in the atmosphere,” said Frank, author of "The Economic Naturalist’s Field Guide: Common Sense Principles for Troubled Times."
“Our main interest is getting carbon out of the air as cheaply as possible.”

Frank made his case using an example close to home. He said that his neighbors in the Ithaca, N.Y., area who bought Toyota Prius electric-gas hybrid automobiles but only drive them a couple thousand miles a year would help the environment more by owning a Honda Civic and purchasing $5,000 in carbon offsets.

“Efficiency has to be the first goal,” Frank said.

Offsets are a better way to strengthen air quality than a carbon tax, according to Eric Carlson, president of Carbonfund.org, a Silver Spring climate organization. Carlson said
a tax doesn’t reduce greenhouse gas emissions.

“The environment gets its piece upfront,” under cap-and-trade, Carlson said. “The market has to figure out how to get from here to there under the cap.”

Carbonfund.org has sold 2 million tons of carbon offsets. Carlson said he has not seen any fraud in the market. He said the key to making the system work is to set standards--as the United Nations, government agencies and California have done--and to use third-party verification and auditing.

He touted the House bill, which passed 219-212. It would reduce greenhouse emissions by 17 percent by 2020 and 80 percent by 2050 compared to 2005 levels in part by using cap-and-trade.

Supporters called the measure the most important piece of environmental and energy legislation in history. Critics portray it as a national energy tax bill that will raise prices and destroy jobs.

Carlson said the bill’s pollution benchmarks are “extremely doable. There is no reason to think that carbon offsets aren’t or can’t be real.”