The carbon offset scam

Ecotality:

As the controversy over global warming doomsayer Al Gore’s voracious energy-eater mansion rolls on, there’s an angle I think merits deeper investigation than it is currently getting. While much of the focus has been on whether or not Gore is an environmental hypocrite, the story has raised the profile of the role of “carbon offsets” in achieving a “greener,” more environmentally friendly world.

In its original story, The Tennessean newspaper in Nashville reported that Gore buys “carbon offsets” to compensate for his home’s use of energy from carbon-based fuels. What is a “carbon offset,” exactly? Essentially, it’s a payment someone makes to an environmentally friendly entity to compensate for personally using non-green energy.

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So far, so good. So, where does Gore buy his ‘carbon offsets’? According to The Tennessean newspaper’s report, Gore buys his carbon offsets through Generation Investment Management. a company he co-founded and serves as chairman:

Gore helped found Generation Investment Management, through which he and others pay for offsets. The firm invests the money in solar, wind and other projects that reduce energy consumption around the globe…

As co-founder and chairman of the firm Gore presumably draws an income or will make money as its investments prosper. In other words, he “buys” his “carbon offsets” from himself, through a transaction designed to boost his own investments and return a profit to himself. To be blunt, Gore doesn’t buy “carbon offsets” through Generation Investment Management - he buys stocks.

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But do Gore’s “carbon offsets” payments really compensate for his big non-green power usage?

Wikipedia again:

The intended goal of carbon offsets is to combat global warming. The appeal of becoming “carbon neutral” has contributed to the growth of voluntary offsets, which often are a more cost-effective alternative to reducing one’s own fossil-fuel consumption. However, the actual amount of carbon reduction (if any) from an offset project is difficult to measure, largely unregulated, and vulnerable to misrepresentation.

Did you get that? Carbon offsets are an “alternative to reducing one’s own fossil-fuel consumption” and yet “the actual amount of carbon reduction (if any) from an offset project is difficult to measure, largely unregulated, and vulnerable to misrepresentation.”

One way to misrepresent things: Tell a newspaper your stock purchases are really purchases of “carbon offsets.”

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There is much more.

Little did in know that my home is setting in the middle of about 17 acres of carbon offsets also known as trees. I wonder if Al's company would be interested in renting my offsets for subleasing to some energy glutton. If AlGore's company is selling stock as a carbon offset, the SEC may want to have a look to see if that kind of representation violates Rule 10(b)-5. But then if carbon offsets have no value to begin with....

With pollen season almost here the carbon offsets may be offset by allergy production and general tree pollution.