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Welch bill would fund carbon 'offsets' with taxpayer money  

The Pentagon could go “carbon neutral.”

Federal tax dollars could be used to buy carbon “offsets” if legislation introduced by Rep. Peter Welch, D-Vt., becomes law – creating a potential windfall for the blossoming offset industry.

Legislative branch offices and all federal agencies – including massive institutions such as the State, Defense and Transportation departments – would be authorized to use portions of their budgets to buy greenhouse-gas offsets and renewable-energy credits, should the Carbon Neutrality Act of 2007 become law.

Greenhouse gas offsets are commonly known as carbon offsets. Renewable energy credits, or RECs, are tradeable commodities that are generated when energy is produced by renewable sources such as wind, solar, biomass or municipal solid waste. The credits purchased by the government would be retired and thus removed from the market, Welch spokesman Andrew Savage said.

Money generated through the sale of carbon offsets is used to finance renewable energy projects. Offset funds also are spent on forestry projects and the capture of methane from landfills and dairy farms that would otherwise be released into the air.

There are no estimates of the cost to purchase offsets for all federal agencies and legislative offices, Welch said.

Welch introduced the bill in February after learning he couldn’t use his congressional budget to purchase carbon offsets. He used $672 of his own money to pay NativeEnergy LLC of Charlotte to offset 56 tons of carbon dioxide emissions he theoretically creates by operating his offices and flying back and forth to Washington, D.C.

The bill, H.R. 823, which includes auditing provisions to ensure tax dollars are used as intended, has five Democratic co-sponsors and is in committee. The measure has also garnered interest from several senators, including Sen. Robert Menendez, D-N.J., who is “looking into” introducing the bill in the Senate, Savage said.

The emerging carbon offset industry, however, has some shortfalls, said Anja Kollmuss, lead author of a Tufts University report that examined the industry. Carbon offsets are of “limited value” in preventing climate change, the report said, and “should not be seen as a way to buy ‘environmental pardons.'”

Kollmuss also expressed concern about carbon offset firms’ lack of financial disclosure, which makes it difficult to see how money targeted to offset emissions is spent.

“The big advantage of this bill is that it would establish a standard” for the carbon offset industry, Welch said in a telephone interview. Criteria to verify government offsets and REC purchases could be used by individuals and companies looking for a credible carbon offset firm, he said.

Welch said it’s “absolutely critical” that offsets be used for qualified projects and that there is verification that projects are being built. “Otherwise, it can turn into a potential rip-off,” he said.

“I think it looks like a really good piece of legislation,” Kollmuss said, praising the emphasis on “additionality,” the term used to describe renewable energy projects that would not have been built without assistance from offset firms.

That said, Kollmuss believes stricter gas mileage requirements, higher gas taxes and more spending on public transportation “would have a much larger impact” on lowering U.S. carbon emissions.

Tom Boucher, president and CEO of Vermont-based NativeEnergy, supports the bill and said authorizing federal monies to purchase carbon offsets is part of a natural progression. “Basically, that’s where the industry … is going, just more and more participating by government and non-government organizations,” he said.

“Allowing our elected officials to take responsibility for the global warming impact of their energy use will build awareness and demonstrate how CO2 offsets from new renewable energy projects can be part of the solution to this crisis,” Boucher said.

Rob Roper, chairman of the Vermont Republican Party, is less enthusiastic.

“I think it’s commendable that he spent his money to do this,” Roper said of Welch’s carbon offset purchase, “but he really should not be spending taxpayer money. There is some controversy about these offsets … that should be taken into consideration.”

Reducing energy use sets a better example than purchasing carbon offsets, Roper said, comparing offsets to sitting around, eating cookies, and paying someone else to exercise, an analogy for which he doesn’t take credit.

“They are paying someone else to run around the track for them with someone else’s money,” he said of the potential of politicians’ using tax dollars to buy offsets. “You got to question what kind of sacrifice that is.”

NativeEnergy, which primarily funds wind turbine and farm methane projects, is one of four carbon offsets firms recommended by the Tufts study. The company also is criticized in the report for not having sufficient disclosure and project verification.

Boucher said NativeEnergy, a private company, voluntarily has a third-party audit and might begin to disclose how much it spends on individual projects. Earlier this month, Boucher said NativeEnergy has completed more than 20 projects in seven states.

“We’ll support movement in that direction, that there should be tracking and third-party review,” he said, referring to audits described in Welch’s bill. “We are wholeheartedly behind that.”

Welch’s office is optimistic about the bill’s prospects.

“I think we’re hopeful because of the Democratic leadership’s commitment to addressing climate change,” Savage said. “We think it will be successful.”

By Dan McLean
Free Press Staff Writer


29 March 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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