Does Henry Waxman Understand Offsets?

In an interview with Montel Williams Henry Waxman (D-CA) explains his view of offsets (thanks TBI):

It doesn't make a difference that a coal-burning powerplant has to reduce its emissions if they have to do it by reducing their own coal, that could be more costly than just buying an offset and we still get the same environmental result. The environmental result is achieved, we do it in a way that would impact the economy in the easiest manner, and at the same time we're providing renewable fuels and greater efficiency and opportunities to get cars on the road that will pollute less.

This sort of thinking is exactly why Rep. Rick Boucher (D-VA) thinks that coal burning can proceed unaltered under the Waxman-Markey cap and trade regime:

. . . we provide two billion tons of offset each year during the life of the program. Those offsets would enable electric utilities like AEP (American Electric Power) to invest in forestry, agriculture and projects like tropical rain forest preservation in order to meet their CO2 reduction requirements under legislation. Therefore, they can comply with the law while continuing to burn coal.

Similarly German environment minister Sigmar Gabriel explained that more coal burning power plants need not increase emissions thanks to cap and trade:

. . . the emissions trading scheme would limit the level of emissions. “You can build 100 coal-fired power plants and don’t have to have higher CO2 emissions,” said the environment minister.

Are Waxman, Boucher and Gabriel correct? Is there some magical property of cap and trade regimes that allow coal burning to continue or even to increase while emissions are reduced? If so, what luck we have!

Of course not. Offsets allow the perpetuation of the business as usual energy system while enabling a convenient fiction that offsets are decreasing in a counterfactual manner future emissions that would have occurred absent the offset. Rep. Waxman is only correct if by "environmental result" he means "the environmental result as defined by my 1,500 page climate bill which includes a complex array of accounting mechanisms that conflate avoiding hypothetical future emissions with actual emissions reductions based on the provision of many, many billions of extra allowances that are created and awarded for taking a range of actions to re-distribute wealth in many places thereby gaining an emissions allowance credit that did not otherwise exist as part of the actual cap." If by "environmental result" Rep. Waxman, means an actual reduction in then emissions generated by economic activity in the United States, then his statement is simply wrong and misleading.

I wonder how long this charade will go on.

Posted in: