Victor discusses climate policy, offsets, and incentives in Wall Street Journalin the news: Wall Street Journal on July 23, 2008
Income from carbon offsets has become French chemical manufacturer Rhodia SA's most profitable business. The WSJ estimates payouts to the firm from projects in Brazil and South Korea could total $1 billion over seven years, raising questions about the incentive structure of the CDM. David Victor argues that carbon markets are not sending the appropriate signals to the developing world.
Michael Wara and David Victor Address the Role of Offsets in California's Cap and Trade Planin the news: Science Magazine
California's plan to cut carbon emissions 10% by 2020 relies on offsets as a part of a cap and trade scheme. Michael Wara points out the challenges that face the state as it designs its offset program, and David Victor sheds light on difficulties faced by the world's largest offset program, the UN's CDM protocol.
Michael Wara Discusses Coal and the CDMin the news: Wall Street Journal on July 11, 2008
The CDM Executive Board recently approved several gas-fired power plants under the UN's carbon offset scheme, opening the door for subsidizing coal generation and stoking controversy. Michael Wara questions the additionality of such projects and argues subsidies are better spent on other clean-energy development.
Carbon markets need reform, say Wara and Victorin the news
A new PESD working paper, "A Realistic Policy on International Carbon Offsets" by Michael Wara and David Victor, argues that a substantial fraction of the international carbon market does not actually represent real reductions in emissions. They also argue that these international credits, which are part of the Kyoto Protocol's "Clean Development Mechanism (CDM)," will not offer companies reliable ways to contain the cost of complying with limits on emissions. Links below to the original paper and reporting in many sources, including the Economist, Guardian, Le Monde, National Public Radio, and BBC Radio.
- » A Realistic Policy on International Carbon Offsets
- » Guardian (UK)
- » Le Monde (France)
- » Economist
- » Sydney Morning Herald, Australia
Substantial part of carbon offset market doesn't mean reduction, Wara and Victor say
PESD scholars Michael Wara and David Victor suggest that a substantial fraction of the $12b market for international carbon offsets does not represent real reductions and that the market is unlikely to provide reliable cost-control for a domestic carbon market. Instead, they suggest that a broader array of strategies will be needed to make a real dent in developing world emissions and that more explicit cost control mechanisms be considered for a U.S. cap-and- trade market for greenhouse gases.
The clean development mechanism (CDM) is a means for industrial nations, known as Annex 1 countries, to meet their greenhouse gas emissions reductions targets by taking credit for reductions from projects they fund in developing countries. The idea is that projects to reduce emissions will cost less to develop and implement in the developing countries where technology is further behind. Industrialized countries can achieve more reductions via investment in the developing countries, achieving greater emissions reductions for less sunk cost. At least this is the idea under the Kyoto Protocol. A researcher at the Program on Energy and Sustainable Development (PESD), Michael Wara says this, in fact, is not how the CDM is working. Read more »
in the news: Washington Post on July 23, 2007
The op-ed by Post columnist Sebastian Mallaby criticizes how the Clean Development Mechanism affects small scale efforts to mitigate greenhouse gas emissions in developing countries. Read more »