Is This How Carbon Credits Work?
By Randall Holcombe • Wednesday October 21, 2009 10:30 AM PDT • 10 Comments
Leon County, Florida, where I live, is selling carbon credits for methane gas it is burning from the county landfill, going part-way into turning our garbage into cash. Here’s the story (facts come from the local paper, the Tallahassee Democrat, October 19, page 3A).
Because of complaints of nearby residents of odors coming from the landfill, the county has installed a system of underground pipes to collect methane gas, which is then routed to a flare and burned off. It appears that because the county is destroying the methane it can claim carbon credits, which can then be sold, which has the potential to raise about $50,000 a year or so for the county.
First off, I will confess to not understanding the science here, because when methane burns it produces carbon dioxide, a greenhouse gas. So, as an economist with not much of a science background, I don’t understand how turning methane into carbon dioxide reduces greenhouse gasses or helps the environment.
The science is not really relevant here, however, because the reason the methane is being burned is to reduce odors from the landfill. The purchase of these carbon credits will have zero effect on emissions of any kind, because the methane would be burned regardless of whether the county could sell carbon credits for its activity.
In this case anyway, the idea that someone can buy these carbon credits and then claim to be helping the environment is a complete sham. There will be no environmental impact of any kind on the part of the seller. If there is any environmental impact at all, it will be that the buyer, having purchased the credits, will emit more greenhouse gasses than had the credit not been available. The sale cannot reduce the emissions of greenhouse gasses, but could increase them.
Is this kind of sham transaction where the campaign against global warming has led us?
Tags: Budget and Tax Policy, Energy, Environment, Global Warming, Land use, Science, Taxation 
Not speaking to the other points you were making, but methane has about 25 times the impact of CO2 on the upper atmosphere, so burning it makes sense from that perspective.
Johnathan | Oct 21, 2009 | Reply
This has been going on for some time. There are agents out there that sell carbon offsets, so that people can feel good about themselves.
Basically, these agents go out and look for activities that are already being done (usually for other reasons) that have some benefit to GHG reduction or carbon sequestration. They tell the person, company, or other entity that if they are willing to allow their project to be used as a GHG offset, the agent will pay them for it.
The agent builds up a portfolio of such projects, and then sells the offsets (at a mark-up) to some unsuspecting rube that wants to put a “carbon neutral” sticker on their car.
Our company was approached by such an agent a couple years ago to buy credits to offset our carbon usage. It took me all of 5 minutes to see through the scam.
Bill | Oct 21, 2009 | Reply
This is not about global warming or the environment. It’s about power and control, nothing else.
Steve Hogan | Oct 21, 2009 | Reply
i’ve seen a movie about the carbon credits. we need to get our global warming friends who have been indoctrinated into believing the carbon credit myth, to watch it.
http://blip.tv/file/1004193/
winston smith | Oct 21, 2009 | Reply
What Johnathan says. Making things simplistic, if you burn 1 unit of methane and in so doing produce 2 units of CO2, but methane is 25x more potent a GHG, then you are entitled to some sort of subsidy or something (using straight neoclassical public finance economics here) since you are providing either a public good or a service that has a positive externality.
At that one landfill yes, but at others that aren’t or are far enough from people where the smell isn’t an issue, then setting up a policy of subsidizing such actions isn’t unreasonable, again from a neo-classical economics standpoint.
Even better would be to channel the methane into producing electricity.
Steve Verdon | Oct 23, 2009 | Reply
Well emissions trading (cap and trade) is a scam, perhaps nothing new in that, but since you ask the question, I have dealt with it fully here.
Emission Trading (Cap and Trade)
Basic Idea — Offsets — Tree Planting — Manufacture Shift — Fair Trading — Surreal Market — Allowances: Auctions + Hand-Outs — Allowance Trading — Companies: Business Stability + Cost — In Conclusion
Lowering emissions is positive for all else that emissions contain, whatever about CO2 (or methane!) but a focus on electricity and transport, 80% of emissions, is a simpler straightforward way to do it, and not as costly to consumers as might be assumed. Go here.
peter in dublin | Oct 25, 2009 | Reply
The global warming debate is full of bad science and self-serving politics. As Jonathan says, methane is far more of a greenhouse gas than CO2 and most of the man-made stuff comes from rice paddy fields.
Though published in the UK (by Metro Publishing), I’m sure it’s available from Amazon, I recommend ‘Global Warming and Other Bollocks’ by Profs Stanley Feldman and Vincent Marks and ‘Superfreakonomics: Global Cooling, Patriotic Prostitutes and Why Suicide Bombers should buy Life Insurance’ by Stephen D. Levitt and Stephen J. Dubner.
I’m not one who claims global warming isn’t happening, but I’m sceptical about the claimed causes and the bad science; e.g. CO2 in the upper atmosphere (put there mostly by planes) is 2 or 3 times more of a ‘greenhouse’ gas than CO2 released at ground level. This is never factored in. e.g. Could someone work out how much energy is required to build a windmill (including infrastructure, wiring,keeping the thing running, replacing the turbines etc.) compared with the actual amount of useful electricity it will produce over its entire lifetime? I suspect that windmills are another feel-good enterprise for politicians to shout about. The list of examples is endless.
John Harrison | Oct 27, 2009 | Reply
The idea of such projects is that although burning methane can bring some emissions, but the electricity which we are using brings the same amount.
The current project of capturing methane on the landfill is listed in CDM document, as one of the projects reducing GHG emissions. Sure, there are some standards for that kind of project. And there is some emission, caused by process of methane burning, but there should be built an electricity station just next to the landfill, and the way they are burning methane to get electricity is different from the one that is done naturally on the landfill.
So, from two evils we choose the least.
Margarita Zhiznevskaya | Nov 5, 2009 | Reply