Companies & Industries

The black art of emissions accounting

A waste of money?

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B.C.’s auditor general, John Doyle (Bruce Stotesbury/Times Colonist)

Environmentalists regard B.C. as the best of a bad bunch when it comes to provincial climate-change policies. An independent report last year credited its carbon tax with reducing petroleum use 15% since 2008. But another prong of the Liberal government’s climate strategy got a scathing review in late March from no less than the province’s auditor general.

John Doyle took aim at the Pacific Carbon Trust, set up to acquire carbon credits to offset emissions from public-sector operations. Nearly 70% of the offsets that enabled the Liberals to boast in 2010 that theirs was the first government in North America to become carbon neutral came from two key projects, in which the trust invested $6 million. Doyle found that the Darkwoods Forest Carbon project in southeast B.C. and the Encana Underbalanced Drilling project near Fort Nelson would have gone ahead anyway, rendering the exercise a waste of public money.

The Environment Ministry and Pacific Carbon Trust were quick to reject Doyle’s claims, saying the projects were verified legitimate. Herein lies the conundrum. Scott MacDonald, the trust’s CEO, puts it succinctly: “We have on one side, eight internationally recognized experts in the world of carbon accounting saying one thing. On the other side, you have the auditor general of Victoria, B.C., and three members of his team saying another thing. Who’s right?”

Either way, offsets, the Pacific Carbon Trust and how they fit into B.C.’s climate strategy will surely be subject to added scrutiny. “There are a lot of pieces of the climate-change jigsaw puzzle… that I think are going to have to be reviewed going forward, regardless of who forms government after [election day] May 14,” says Jock Finlayson, executive vice-president at the B.C. Business Council.

The government says the regime is based on international standards, including a validation-and-verification system consistent with offset systems being implemented in Quebec, California, Australia, China and South Korea. But in order for it to be a true benefit to the environment, there must be signs its investments enable emissions reductions that wouldn’t have happened otherwise.

“The problem with carbon-neutral government is that it makes public-sector organizations like schools, hospitals, colleges and universities purchase offsets that go in only one direction, which is toward private-sector activities. It’s all stick and no carrot,” says NDP environment critic Rob Fleming. “I think it should be repurposed,” he adds of B.C.’s offsets regime.

But it remains to be seen how. Marc Lee, a senior economist at the Canadian Centre for Policy Alternatives, says government should focus less on offsets and more on a uniform carbon tax applied to public and private sectors equally to focus on real reduction of greenhouse gases across the economy. “The carbon-neutral government policy is miniscule, so we should abandon it,” adds Mark Jaccard, professor of sustainable energy at Simon Fraser University. “We’re going to have more and more issues like this, and they discredit the entire climate-policy enterprise.”