Ricardo Coelho

http://cooltheearth.wordpress.com/

As to the argument that offsets are a good thing because they are the only way to include forestry and agriculture: if we could measure emissions changes in forestry and agriculture precisely and accurately enough to generate nice package carbon offests that are real, additional and permanent, we could include them in cap-and-trade, or charge a carbon tax against them. Why don't we? Because you can't measure carbon changes in biological systems that precisely or exactly. Given that they are dynamic systems that absorb and release carbon constantlty, both the establishing of baselines and the assurance of permanence are close to impossible. In addition there is just the precision and accuracy of day to day measurment. A lot of carbon is in the soil and in roots.  In very small scale tests, where esssentially cost is no object we can get day to day measure plus or minus five percent by combining sattelite pictures with on-the-ground metering. On the scale needed to measure carbon in real world scale forestry and agriculture we have to depend mostly on sattelites, with scatter ground probles used to refine and tweak estimates. That means plus or minus 25%. Given that actual carbon gain or loss can be a lot less than that, and that what is in an ecosystem varies a lot depending on when the measurement is taken, this means any particular year to year number can be off by close to 100%.  In short, offsets, or carbon charges or permits are not the right way to deal with agriculture and forestry. You need  qualitative meansurements, the kind of thing that mostly can't be included in an emission based cap-and-trade system. What you can measure is the long term trend in terms of whether carbon is being stored or released and by a little or a lot. There are ways to regulate and/or subsdize changes in the right direction, but not by the type of division into neat little precise emission packet

As Yale economist William Nordhaus explained in Copenhagen:

"Economic participants-thousands of governments, millions of firms, billions of people, all making trillions of decisions each year - need to face realistic prices for the use of carbon if their decisions about consumption, investment, and innovation are to be appropriate... without a strong price signal, there is simply no hope for making the vast number of decisions in a remotely efficient manner...  Raising the price of carbon is [thus] a necessary condition for implementing carbon policies in a way that will reach the multitude of decisions and decision makers over space, time, nations, and sectors."  [Emphasis added.]

Cap and trade is a way to hide the price, and carbon offsets are a way to fake the cap.

A carbon tax with revenue recycled to households would do a lot more for the climate by gradually and predictably raising carbon prices giving conservation, efficiency and renewables a foothold, while explicitly making consumers who use less than average amounts of fossil fuels better off.  Don't hide the price, recycle the revenue. 

I hope Waxman-Markey is heading for the same graveyard as Lieberman-Warner.  RIP.  Let's start over with a simple, fair, carbon tax.  And of course, no offsets.

More on revenue-neutral carbon taxes at the Carbon Tax Center and the Price Carbon Campaign.

It should be C=T*P  (e.g. C=tonnes*($/tonne)) . 

Offsets lower the Price and therefore the Cost if the Target is constant.