I was sent a link today to an article on Business Green that “Study raises concerns over Chicago Climate Exchange offsets”.  While i have no problem with critical analysis, this article starts with author James Murray writing:

“Firms looking to offsets their carbon emissions have today been advised to steer clear of three high profile emissions reduction schemes after a study claimed that while they are delivering environmental benefits they should not be treated as a source of offset credits”

This is clearly a conclusion that would be troubling to 4Offsets, given our status as a participant on the Chicago Climate Exchange, if such a claim was justified.  In fact after making a statement containing much hyperbole about “steering clear” from CCX offsets, he supports the statement with the following quote:

“The study from environmental publisher Environmental Data Services (ENDS) claims that offset buyers should avoid credits emanating from the Chicago Climate Exchange (CCX), the New South Wales Greenhouse Gas Abatement Scheme (NGACs) and Renewable Energy Credit projects, on the grounds that they were not developed specifically as offset schemes and as such do not adhere to the most robust offset criteria.

Tejas Ewing, author of The ENDS Guide to Carbon Offsets, said that while each of these initiatives were created for “worthy purposes” and are delivering environmental benefits the credits they offer should not be mistaken for offsets.”

Yes after the scathing claim that the CCX offsets are not upto CDM standards, he provides that statement as the evidence.  I don’t find Mr. Ewing’s statement as indicting the CCX projects, in fact he confirms they provide environmental benefits. Mr. Ewing is discussing whether these projects meet a stricter standard of CDM.  What the  critic (business green, not Mr. Ewing) fails to tell the audience is:

1. CCX offsets sell for $6 per ton, certified credits from projects meeting CDM standards sell for $38 (24.44 euros) per ton.
2. CDM projects are more expensive to verify and gain certification
3. UN Certification currently takes more than 2 years from filing till certification.

Most importantly, the CCX is “the only game in town” for the US market, it may not be perfect, but it’s a market with a significant number of CO2 emitters participating and agreeing to offset their emissions.  Since we are mainly a US focused business, we feel it’s important to participate in the US market and buy these voluntary offsets.  If we chose to only work with Certified offsets and pay $38 a ton, it wouldn’t affect the US market, Detroit Edison and Intel would still need to pay $6 a ton for their CCX obligations, not the $38 per ton i paid for certified offsets. 

More importantly, if we buy the CCX offsets, we have the potential to force the price emitters on the CCX past $6.  If you look at the CCX pricing, it’s gone up by over 100% since Super Tuesday (feb 5th) and Mitt Romney’s pull out, this has increased the cost of an offset and therefore increases the attractiveness to emitters of actually reducing emissions, rather than just offsetting them.

This article’s main complaint is ”they’re not as good”.  Wethink that is ok.  From my understanding, CDM and UN certifications are expensive and impractical for small projects. Worst of all it takes 2 or more years for getting your verified CDM project certified.  While i’m not arguing this is bad, it is expensive. If and when the US adopts a carbon cap, they will legislate what an offset credit is and the CCX will comply and enforce those regulations. Meanwhile i think anything that gets the US involved in the fight against global warming is good and that those companies on the CCX should be supported for leading the way.

4Offsets continues to support the CCX and the US market and is proud to be part of the private sector’s leadership in the America fight against global warming