By Steven PowerÂ
WASHINGTON — The growing U.S. market for carbon offsets — vouchers that let companies and individuals project an environmentally friendly image by paying others to cut their greenhouse-gas emissions — is so opaque and loosely regulated that it offers consumers “limited assurance of credibility,” according to a federal audit.
The report, expected to be published on Friday, stops short of recommending new regulations. But it suggests members of Congress think carefully before letting companies use offsets as a means of complying with legislation to control carbon-dioxide emissions, which are not currently regulated by the U.S. government.
Estimates vary on the size of the U.S. offset market, with some analysts putting the value of U.S. carbon offsets traded in 2006 at $91.6 million, an amount expected to grow sharply as more companies and individuals seek to lighten their impact on the atmosphere, or at least appear to be trying. Some companies are also betting the offsets they buy now will count toward their obligations under a future mandatory U.S. emissions-reduction system.
As purchases of voluntary offsets have soared in recent years, so have questions about whether money being spent on them funds real emissions cuts. Such offsets, which are often bought by consumers from online sellers, are supposed to represent emissions avoided through projects such as installing wind turbines or planting trees. Skeptics — including some members of Congress — have questioned how consumers can know in the absence of federal regulation whether such cuts are actually being implemented, or would have happened anyway.
While the findings of the Government Accountability Office, an investigative arm of Congress, are generally consistent with those criticisms and don’t break new ground, they could help influence the design of whatever mandatory program for curbing greenhouse-gas emissions emerges from Washington.
The report says that in purchasing offsets from 33 retail providers, the GAO “did not always obtain sufficient information to understand exactly what we received as a result of the transaction.” Because there is no single registry for keeping track of offset projects — and ensuring that projects are not counted multiple times — “it is difficult for consumers to determine the quality of the offsets they purchase,” the report says.
Read the rest of this story at Wall Street Journal.