Must be able to compute costs and benefits of intangible commodities (and detect fraudulent ones)Foolish eco-guilt-ridden carbon-offset purchasers pay $34,000 to a landfill company to flare methane! That is the smirking message of a Washington Post story citing a perfect case of preventable offset fraud.
In this case, not only did the landfill operator admit that the funding was redundant,
"But that project was put in long before the offsets were sold and for a different reason: to keep dangerous gases from accumulating in a capped landfill. So if the offset market dried up completely? Nothing would change.
The money "is gravy to us right now," said Alan Cummins, executive director of the regional authority that runs the landfill. Even without it, he said, "we would always continue to flare.""
How frustrating, when there are plenty of worthwhile projects in need of financing to make zero emissions electricity from methane digesters, that cost up to $2 million dollars.Maddening, right? But in Europe ---where they have been doing this for longer because of Kyoto --- carbon offsets routinely are audited by third party accounting firms, both to check the emissions data, and to see if they would have been done anyway, regardless of incentives.
There has been a concerted push in the media to deride buying carbon offsets. Yet, consider this: it is a business model we already use: this is just "altruistic" business financing. We send money to P.B.S., yet nobody derides us as fools for sending money to support public broadcasting. We understand voluntarily supporting something for the Common Good.
Most offset companies do give you the choice of what to support with your funding, and if you are smart enough to care, you are probably smart enough to make good use of your funds.
For example, offset buyers have now funded more than 17,000 megawatt-hours, or 9% of total capacity of one wind farm, just through Terrapass. That means that of their 45 turbines, 4 of them turn just because TerraPass members sent money to turn them.
There is a danger to this kind of reporting: it encourages a simplistic view that all offsets are foolish and redundant frauds perpetrated on gullible treehuggers. This reduces the financing that good projects could receive. But we should not discredit this "altruistic" business model. We should just ensure that projects are professionally certified to be fraud-free.
Accountants are already capable of adding and subtracting intangible goods and services. They just need to apply it to new territory: the Common Good.
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