What is a “carbon neutral life?” What are “carbon offsets?”

On March 21, 2007, Sen. James Inhofe, R-Okla., challenged Gore to take a "Personal Energy Ethics Pledge" to consume no more energy than the average American household. Gore, who has been criticized for his electricity usage reportedly 20 times higher than the average American household at his Tennessee mansion, refused to take the pledge.

"There are hundreds of thousands of people who adore you and would follow your example by reducing their energy usage if you did," Inhofe said. "Don't give us the run-around on carbon offsets or the gimmicks the wealthy do," Senator Inhofe told Gore.

"Are you willing to make a commitment here today by taking this pledge to consume no more energy for use in your residence than the average American household by one year from today?"

Gore declined to take the pledge. Defending his actions by saying, “We live a carbon neutral life…”

What is a “carbon neutral life?” What are Carbon offsets? What are the gimmicks Inhofe is talking about?

Here CARE offers some insights from one of our energy counsel member’s staff. What do you think?

Typically, green represents the deadly sin of envy, but with the media’s help it now also stands for hypocrisy.

In this case, the hypocrisy is promotion of buying carbon offsets – giving a donation to an energy-saving project as penance for guzzling gas or jetting off to an exotic location. With Al Gore, Hollywood and other celebrities leading the way, the media have joined the excitement, encouraging individuals and companies to offset carbon dioxide emissions.

Gore and others call it becoming “carbon neutral” and it is all the rage these days – just look who’s doing it: the Oscars, Dave Matthews, George Clooney. In fact, “carbon neutral” was the Oxford American Dictionary’s word of the year in 2006.

To be carbon neutral, it’s as easy as buying a “carbon offset” or so proponents say. Then you can help save the planet from global warming and still fly to Cancun for that vacation. Online booking sites like Travelocity and Expedia even partner with companies that sell carbon offsets to consumers.

The companies then use the money for “carbon-reducing projects, such as renewable energy like wind and solar,” said CarbonFund.org’s Eric Carlson.

But carbon offsetting might as well be a joke to economists and environmentalists. “Subsidizing ‘good’ energy in order to justify ‘bad’ energy is like eating salad in order to justify eating dessert. It is an exercise in self-deception,” wrote economist and author Arnold Kling on March 6.

Jolly Green Hypocrite
Just a day after Gore’s documentary, “An Inconvenient Truth,” won an Academy Award at the “green” Oscars, the Tennessee Center for Policy Research cried foul over the former vice president’s green sermons.

An article in The Tennessean defended Gore from the charges, claiming “green power” is used in the Tennessee mansion, and quoted spokeswoman Kalee Krider who said, “They, of course, also do the carbon emissions offset.”

But it turns out Gore purchases offsets through Generation Investment Management, a company he founded and chairs.

While Gore argues that his offsets and energy choices allow him to continue gallivanting around the world to spread the message of conservation, a BBC News article from February 20 said emissions offsets may actually be harmful. BBC quoted Jutta Kill of the Forests and the European Union Resource Network (FERN), who said carbon offsetting does not reduce emissions and the public is being seriously misled.

Kill and several other environmentalists explained in the story that offset payments often go to tree planting and other projects, but “they are not actually neutralising their impact on the global environment.” The system is harmful, they said, because people believe action is being taken to reduce greenhouse gas emissions when they buy offsets.

Planting trees to make up for carbon emissions was also criticized by columnist Lorrie Goldstein of the Toronto Sun. “[T]o absorb most of the carbon dioxide caused by one passenger taking one domestic round-trip flight across Canada in 2007, requires planting 15 trees today that won't complete the job until 2047-2057, assuming none is destroyed by fire, disease or insects. If they are, they'll release their carbon back into the atmosphere.”

In a May 2006 Wired magazine article, in which Gore said he atoned for 1 million miles in global air travel for 2005, he also admitted average Americans are unlikely to practice carbon offsetting, which is “essentially a voluntary taxation system.”

But what if now-voluntary offsetting becomes mandatory?

Cap’n Who?
Carbon offsets are a choice for individuals and business who want to spend the money, but a legislative proposal called “cap-and-trade” would forcibly limit emissions by industry or the entire economy and act as a tax, according to some experts.

Al Gore has called global emissions trading, also called cap-and-trade, a “responsible approach to solving the climate crisis,” according to Newsweek.

Cap-and-trade is a two-part system. The “cap” is a government-imposed limitation on carbon emissions, either for industry or the entire economy. The “trade” is a government-created market to buy and sell pollution or greenhouse gas credits. Companies that remain under the limit can then sell credits so someone else can emit more gases than the cap allows. Essentially, high-emissions companies try to “offset” their own emissions by paying the lower-emitting companies.

But according to an editorial in the March 3-4 weekend edition of the Wall Street Journal, it is not a market approach: “There’s no market here unless the government creates one.”

Kling, an economist and author who frequently writes for TCSDaily.com, called cap-and-trade “an entitlement policy, in which corporations would be given licenses to pollute, which they would then trade in a market.” He then declared such entitlements a “tax and subsidy scheme” because companies that go over the government limit will essentially be taxed by having to purchase credits from another company.

Winners and Losers
Cap-and-trade systems are promoted with the idea that the planet wins because emissions will be reduced and global warming will be mitigated, but that may not be the case.

One legislator who has proposed cap-and-trade legislation is Sen. John McCain (R-Ariz.). When CNN’s Miles O’Brien asked McCain about his support for a cap-and-trade system, McCain called it “a free market-based proposal that’s working in Europe [to reduce greenhouse gas emissions],” during the January 24 “American Morning.”

“In truth, Europe's CO2 emissions are rising twice as fast as those of the U.S. since Kyoto, three times as fast since 2000,” wrote Christopher C. Horner, senior fellow at the Competitive Enterprise Institute, in the February 2 Washington Times.

Horner, the author of The Politically Incorrect Guide to Global Warming and Environmentalism, also wrote in his book that the only countries in Europe that have significantly reduced emissions, with one exception, “did it the old-fashioned way: economic collapse.”

“Current emissions-trading schemes have proved to be little more than a shell game, allowing polluters in the developed world to shift the burden of making cuts onto factories in the developing world,” reported Newsweek International on March 12.

Decreasing emissions is no guarantee. But under cap-and-trade, rent-seeking companies work with the government to construct the market and invest in projects that will emit less carbon dioxide. They stand to profit while ordinary citizens and the poor lose as higher costs are passed on to them.

“Cap-and-trade proposals would be the largest single tax increase in the history of America,” Sen. James Inhofe (R-Okla.) said on February 14. “While certain large companies may benefit from these schemes, the American people would be greatly harmed, particularly the middle class, the working poor and low-income families.”

Horner agreed. “Carbon dioxide taxes and rationing schemes are regressive: they disproportionately affect poor people and seniors,” he wrote in his book.

In fact, this green plan may take quite a bit of green from your wallet.

“The environmentalist group Resources for the Future counted that cap-and-trade is actually about four times as expensive to the economy as an energy tax designed to achieve the same outcome,” wrote Horner.

In his book, Horner includes figures for the cumulative loss of gross domestic product by 2025 from three separate cap-and-trade policies that have been introduced in the Senate. The losses range from $331 billion to $1.4 trillion.

Julia A. Seymour
Business & Media Institute