September 22, 2009
Carbon Offset Auditor Suspended Casting More Doubt on Offsets Market
The two largest carbon offset auditors have been suspended in the last year, the most recent one, SGS UK, was suspended by UN inspectors this past week. A fifth of the $100 billion worth of emissions credits are sourced from offset projects funded by the CDM, whose veracity is called into question by these developments.
By effectively putting a price on carbon, the EU's carbon offsets market is the centerpiece of Europe's commitment to reduce emissions and is a model for the one that stands to be enacted in the U.S. should pending climate legislation (ACES) pass through the Senate. But according to the Times Online, the legitimacy of this market, which would be reliant on the large scale availability of international emissions offsets, is cast into doubt.
"SGS UK had its accreditation suspended last week after it was unable to prove its staff had properly vetted projects that were then approved for the carbon-trading scheme, or even that they were qualified to do so... SGS is the second such company to be suspended - Norway's DNV was penalised last November for similar infractions."
While performing the obligatory spot check, UN inspectors found six irregularities in projects that SGS UK staffers vetted for approval. Although the firm has since corrected the errors, it will remain suspended until further notice from UN.
With the two major carbon offset auditors sullied by poor performance and subsequent suspensions, confidence in the reliability of international offsets trading to produce bona fide emissions reductions is low. This latest suspension comes on the heals of a scathing report on the dangers of carbon offsets markets released by Friends of the Earth.
As discussions of the upcoming climate negotiations in Copenhagen increasingly center on soliciting the U.S. to undertake decisive climate action by adopting the cap-and-trade mechanism put forth in ACES, Europe's own climate policies are faltering unforgivably. The House passed climate legislation would allow polluting firms to rely heavily on emissions offsets in order to comply with the cap and trade system and the U.S. EPA would be tasked with establishing regulations to certify offsets.
While the UN promises to enact tougher standards on the CDM in Copenhagen and U.S. regulators would set their own new standards if the House climate bill becomes law, Europe's failure to properly regulate the carbon trading scheme and produce verifiable emissions reductions is clear evidence that such market mechanisms, which too easily evade regulation, may function better as symbols of action than as a legitimate means of effecting emissions reductions and mitigating climate change.