Up to two-thirds of the UN-approved projects do nothing to reduce carbon.
Before Congress attacks global warming with a cap on greenhouse gases – and then allows firms to pollute if they buy "carbon offsets" elsewhere – lawmakers should consult the UN's abysmal record in this slippery type of trading.
The UN set up its Clean Development Mechanism (CDM) to help companies in industrialized countries invest in projects in poorer nations that cut greenhouse-gas emissions as part of their countries' commitment under the Kyoto Protocol or the European Union's emissions plan.
The concept: Cutting emissions anywhere is equally effective in fighting global warming. So why not keep polluting at home and simply pay, under this so-called cap-and-trade system, to close a polluting plant in China or to save a forest in Brazil? The cost of financing wind turbines in Bangladesh, for instance, is much less than scrubbing carbon dioxide from smokestacks in Germany.
But Stanford University researchers who've studied the CDM say the emissions cuts are largely illusory: As many as two-thirds of the programs funded contribute nothing new to reducing emissions.
How can that be?
One problem is that many offset payments are meant to something from happening that might worsen climate change. The CDM must somehow prove a project has "additionality," that it would not have occurred anyway without a payment. But that isn't working out in practice, the researchers say. One simple clue: Most projects are already completed at the time they are approved for CDM offsets.