Just Say “No” to Offsets
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After months of tedious negotiations, Senators John Kerry and Joe Lieberman last week introduced a draft of their cap-and-trade bill, the American Power Act. The bill pampers the country’s worst industrial polluters while eliminating key components of the Clean Air Act.
The American Power Act stakes solving the climate crisis on the creation of a risky new carbon market that depends on carbon offsets to reduce global warming pollution. Carbon offsets are a way for corporations to “pass the buck” — allowing them to send money overseas for projects that promise to reduce emissions so they can continue to pollute in the United States. To have any benefit, carbon offset projects need to result in real reductions in climate-disrupting emissions. But we’ve seen that not all offset projects clearly lead to reductions. (Click here to learn more about carbon offsets.)
We’ve released a new tongue-in-cheek “guide” called Ten Ways to Game the Carbon Market that details ten different ways that fraud, corruption, and gaming abuses can occur in a carbon trading system like the one proposed in the Kerry-Lieberman draft bill.
Nine of the ten methods have already been successfully carried out. One scam is a variation on the classic Ponzi scheme that was perpetrated by emissions trader Anne Masters Sholtz with California’s pollution trading program in 2000.
The American Power Act allows for some two billion tons of offsets to enter the U.S. carbon market. Not only does this open the door to fraud, it also allows the buildup of subprime carbon in the trading system. Subprime carbon is composed of carbon offset futures that, compared with regular emissions allowances, have a relatively high risk of collapsing in financial value because of failed promises to reduce emissions.
As the Senate continues to debate financial regulation reform as well as climate change, Friends of the Earth will continue to sound the alarm about the corporate polluters and their Wall Street allies that have co-opted our democracy for their own profit.
Don’t let Wall Street wreak any more havoc. Say no to offsets by clicking here to learn more and sign our petition.
March on the Wall Street Lobbyists
Friends of the Earth U.S. joined dozens of labor and progressive organizations to protest corporate greed in our financial system and to call for strong financial reform.