A new report from Climate Trade Watch, which is affiliated to the Transnational Institute, accuses carbon offset companies of using the same sort of ‘future value accounting’ that caused the collapse of energy giant Enron.
The report argues that when companies like Climate Care and the Carbon Neutral Company sell the public carbon offsets, carbon savings expected to be made in the future are counted as savings made in the present. This is known as ‘future value accounting’ and is the same technique used by Enron to inflate its profits with such disastrous consequences.
Offset companies give the idea that emissions are instantly ‘neutralised’ when in fact the supposed ‘neutralisation’ can take place over periods of up to a hundred years. Regular offsetting worsens the problem because the rate at which carbon emissions are ‘neutralised’ is far slower than the rate at which they are generated.
The report also argues that offset companies breed complacency by selling ‘peace of mind’ to consumers, offering up a form of ‘greenwash’ that distracts from the serious task of tackling unsustainable consumption patterns and business practices
Moreover there has been limited research on the climate benefits of tree plantations into the carbon cycle while the offset companies quantify this supposed benefit into a sellable commodity.
The report’s author, Kevin Smith, said that “The only effective way of dealing with climate change is to dramatically decrease our current rates of fossil fuel consumption. Offsets are providing a justification to maintain our carbon-intensive lifestyles, and delaying the profound changes we need to make in our societies”.
The full report is available here.