Carbon offset venture is catching fire

By Les Leyne
Times Colonist
January 6, 2009

Eleven months after the Pacific Carbon Trust was announced, the outfit is still advertising to do its first offset deal.

It's been a lengthy birthing process for B.C.'s newest Crown corporation, which has yet to develop a website and boasts just two or three employees. But this year the outfit is expected to make its first move. It is scheduled to offset at least 35,000 tonnes of greenhouse gas emissions produced from government travel.

It will do that by funding as-yet-unidentified projects in B.C. that reduce emissions. Those will likely be in the fields of renewable energy generation, energy efficiency initiative or tree-planting, to name a few.

The deals are not done yet, but the first partners are expected to be larger-scale industrial or commercial concerns with lots of capacity to reduce emissions.

The initial tonnage is just a fraction of what will eventually become a sizable enterprise. Within two years, the corporation is forecast to be buying offsets for one million tonnes of emissions annually.

That will offset a lot more than the government's travel emissions.

The B.C. government has to become carbon-neutral as a whole by 2010. So the scope and scale of this venture will expand dramatically over the next year.

It's still a fledgling enterprise at present. The Pacific Carbon Trust was allocated $9 million last year for the start-up. It's overseen by two nominal directors: Deputy Finance Minister Chris Trumpy and Climate Action Secretariat head Graham Whitmarsh.

As described in the Throne Speech, it is to invest in B.C.-only projects that produce permanent emission reductions that are measurable and verifiable.

Although there are various exchanges around the world doing a booming business in carbon offsets, the concept is treated with skepticism and mistrust in some quarters. International exchanges that take money from westerners with guilty consciences and plant trees in the Amazon are seen as ineffectual ventures at best, and outright cons at worst.

Creating a B.C. one was seen as a way of localizing the benefits, and ensuring they are for real. Liberals were keen at the time to highlight spinoff benefits like new jobs in carbon accounting, carbon brokerage and carbon auditing.

All those new "carbon jobs" were envisioned before the economic meltdown. It's hard to pinpoint the impact of the economic stall on the overall emission plan.

Any new jobs that materialize are even more welcome now than they were when first promised last year.

But carbon neutrality comes at a price. Reducing emissions adds millions to the cost of the public sector. Offsetting them adds millions more.

And the public sector is paying the carbon tax just like everyone else.

So just at a time when the B.C. Liberals are beginning the process of belt-tightening across all spheres of government, they have locked in a series of cost increases from which there is no escape.

Government travel is a good example. Avoiding or curtailing travel saves money. But the government budgeted $15 million for information technology, like video-conferencing, so that travel could be curtailed.

And a lot of travel is unavoidable. For months now, the government has been budgeting offsets into the travel costs. That reflects the emissions from aircraft, rental cars, even hotel rooms. It adds about one or two per cent to the total travel bill.

Those offset costs will be turned over to the Pacific Carbon Trust, which will then bestow the money on entities that can prove they are lowering emissions in B.C.

A cabinet order signed last month defines in 12 technical pages a lot of the details about how it works. Safe to say the rules are so stringent, the likelihood of any scams is slim to none.

Opposition critics were interested last spring in learning what percentage of government emissions would be reduced, as opposed to offset.

In other words, how much of the problem would the government just buy off, rather than fix?

Said Environment Minister Barry Penner: "We don't know the precise number yet."

But in the early going, it seems clear most emissions are being offset, rather than curtailed.

The trust is still advertising for qualified business partners it can deal with, through a request for qualifications that outlines in further detail what is expected.

The climate change issue that drove the creation of the Pacific Carbon Trust was pushed way down the agenda months ago by the economic collapse. It would be ironic if carbon offsets emerge over the next few years as a growth industry, given there aren't many of them around any more.

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