Using Offsets to Push Climate Bill

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Originally published in the Albany Times Union

WASHINGTON — When Connie Patterson began expanding her Auburn. Cayuga County, dairy farm in the 1990s — growing from 100 cows to a 950-cow operation — she went from spreading manure over fields to housing the liquid waste in lagoons.

But that, she soon discovered, was a pretty smelly situation.

“It just sits in there, and it cooks, and it has a horrible odor,” Patterson said. “It’s like nothing you can believe.”

Patterson spent years searching for a solution, and ultimately installed an anaerobic digester to remove methane from the manure lagoon. Now, instead of entering the atmosphere, the methane from her cattle helps power the digester itself, the cow milking station, milk parlor and the lights on her farm.

Because Patterson’s project keeps the heat-trapping greenhouse gas methane out of the atmosphere, she also has netted another payback, in the form of carbon credits traded on the six-year-old nongovernmental Chicago Climate Exchange. Over three years, she has received $21,000 from the sale of those carbon offsets.

It’s small change compared to her initial $1.5 million investment in the manure treatment system. Without carbon offset revenue, Patterson said, she wouldn’t be able to afford it.

Dairy producers, like Patterson — along with landowners growing pine trees on previously empty land and vegetable farmers combating weeds with mulch instead of diesel-powered tillers — could win big under climate change legislation advancing on Capitol Hill.

The measure’s focus is in forcing businesses to meet steadily tightening limits on carbon dioxide and other greenhouse gas emissions blamed for global warming. To meet the new caps, companies could cut their emissions or buy allowances from the federal government and other businesses that would enable them to spew more pollutants.

But the legislation also would allow companies to “offset” up to 2 billion tons of their emissions each year by investing in pollution-reducing projects.

Businesses that generally back the climate change bill — including NRG Energy, ConocoPhillips and Dow Chemical Co. — have insisted that their support hinges on a generous offset program that could help cushion companies from higher costs of complying with the new emission limits.

But the bill’s offset plan has been battered by environmental activists as too generous. They argue that the offsets would undermine the new greenhouse gas emissions limits the legislation would mandate.

The fear, said Emily Figdor of Environment America, is that if carbon offsets are cheap and readily available, companies may purchase them instead of cutting their pollution or buying allowances.

As a result, U.S. emissions might not dip for years — and could even increase in the short term — despite new greenhouse gas limits.

“The fact that 2 billion tons of offsets were included puts in jeopardy the environmental goals of the bill,” Figdor said.

An analysis by Breakthrough Institute, an Oakland, Calif.-based think tank, found that if polluters purchase the “relatively cheap carbon offsets … emissions in supposedly capped U.S. sectors (could) rise by up to 9 percent between 2005 and 2030.”

Carbon offset champions say the programs play a valuable role in capturing potentially devastating greenhouse gases.

And covers over livestock manure lagoons can trap methane — a gas believed to be more environmentally damaging than carbon dioxide — so sophisticated equipment can turn that waste into electricity.

But offsets sometimes have been criticized as providing illusory benefits.

If foresters are able to sell carbon offsets for trees they would have planted on their own or farmers are paid for practices they would have employed anyway, there’s no new benefit to the environment, said Patrick McCully, executive director of Berkeley, Calif.-based International Rivers. He questions the efficacy of existing international offsets in developing countries. “It is very likely that most offsets are from business-as-usual projects,” McCully said.

The legislation advancing in the U.S. House of Representatives so far dodges the tough political questions of what kinds of activities could qualify as offsets. Instead, Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., the bill’s lead drafters, decided to leave those decisions to the Environmental Protection Agency and a new offsets integrity advisory board that would be established by the measure.

Offset skeptics have applauded that move, saying it would help ensure the validity of U.S. carbon-cutting programs.

“It’s the right approach to leave the scientific and technical decisions to the scientists,” Figdor said. “Congress should not get into the weeds of some of the extremely technical issues with how they set up offset programs.”

Farming groups are asking Congress to ensure that recent “green” projects — like the waste treatment system at Patterson’s New York dairy farm — will qualify for offsets, even though they were launched before any congressional mandate to limit greenhouse gases.

“Why in the world would you want to punish some innovative farmer?” said Ken Nobis, with the National Milk Producers Federation.

Rep. Scott Murphy, D-N.Y., a member of the Agriculture Committee, said he wants to ensure that New York’s past “good works” are recognized in any future carbon-limiting and offsets scheme.

“New York has been working for a long time to clean up our energy and (has been promoting) environmental policies,” Murphy said. “And I want to be sure that we’re not getting penalized for having been a leader on this.”