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Carbon Offsets May Ease Our Guilty Consciences But Do They Really Help the Environment?

The problem isn't just that the offset mechanism lacks transparency and consistency; it's also that addressing those issues can easily distract from more meaningful solutions.

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Environmentally, the one indisputable success of the carbon-offset project is that it generates energy without burning fossil fuels. However, this has created a booming local market for combustibles. Consequently, whereas before families such as Manini's could gather dead cane leaves and branches free, now they must often buy wood. The effects on the poorest are substantial because they make many fires a day for cooking and washing. And with more people buying firewood, vendors are felling increasing numbers of trees to meet demand. What's more, one of Manini's friends tells me he cuts trees on his land to sell directly to the power station to earn extra money. He knows others who do the same. The people gathered at Manini's house attest that since MPPL arrived, they've seen an uptick in tree clearing.

I ask the head of MPPL, K. Krishan, about the discrepancy between what I found and the company's claims. He assures me MPPL "does not at all contribute to residents cutting down trees." Regarding worker safety, he claims the facility provides hard hats and goggles, which are required in the boiler feeding area. (Photos of the facility posted on Myclimate's website show laborers who do not wear hats or eye shields.) As for the rural distribution of electricity and the women's jobs described on its website, Krishan says these were part of a pilot project, active for less than a year between 2004 and '05, but the firm has been "remiss" in keeping its website current.

When I contact Gold Standard, the representative says what I found at MPPL was "alarming" and that "this project in particular has been subject to extensive reviews, research and monitoring both by the carbon community and independent groups." Despite how good they may sound on paper, in reality these projects inevitably entail complexities that arise in situ. These can range from lazy, incompetent or corrupt inspectors to opportunistic businesspeople like those running DESI and MPPL, both of which are certified to sell credits on the lucrative Kyoto-sanctioned carbon market. And like DESI, MPPL is expanding; it is building additional biomass plants using offset money based on the "success" of its Malavalli facility. Unexpected outcomes like the felling of trees for extra income and to make up for a shortage of wood for domestic consumption present other obstacles to a healthy climate. Maybe carbon offsetting -- trying to stuff the global-warming genie back in the bottle -- is a job that simply can't be done.

Building renewable energy systems needed to leapfrog dirty energy is a much larger and politically complex undertaking than CO 2 neutralization suggests. This transformation requires a far-reaching, well-funded program -- something carbon offsetting can actually frustrate. The offset mechanism hinges on "additionality," meaning that a carbon-balancing project must not duplicate what would have otherwise happened. If the financing for, say, a biomass power plant was already lined up, or if the government required such a facility as part of its energy policy, then CO 2 money would be off limits. In reading MPPL's most recent validation form, I come across a line confirming the project's additionality: "It can also be concluded that there are no new policies or regulations, which would mandate the implementation of the project activity." In other words, keeping its energy system dirty allows India to boost the value of its carbon market. If the government mandates green energy, not only will it have to pay more for high-tech hardware, since fewer projects would be deemed additional but also the rich offset market would flee to competitors such as China. Indeed, a week after I went to Malavalli, the state of Karnataka announced the approval of two new 600-megawatt power stations that will run on fossil fuels.