China: Climate Change Or Hot Air?
Professor Michael Wara, an expert in environmental policy, is quoted in Business Week on the effectiveness of carbon offsets:
On the wooded hills outside the city of Harbin in the northeastern province of Heilongjiang, Chinese developers are building towering wind turbines that will spin day and night to generate clean electricity. The project represents the hope that China, which recently surpassed the U.S. as the world's largest source of greenhouse gases, has truly embraced environmentalism.
The planned 29 turbines near Harbin represent something else as well: the widely accepted notion that market forces can be harnessed to aid the fight against climate change. Under the international treaty known as the Kyoto Protocol, Chinese wind-power developers are selling "carbon credits" reflecting their reductions in emissions of carbon dioxide and other heat-trapping gases.
Their success, however, is predicated on the credits stimulating activity that would not have occurred without special financial incentives. David G. Victor, a professor at the School of International Relations & Pacific Studies at the University of California at San Diego, estimates that between one-third and two-thirds of all carbon credits awarded to developing countries under the Kyoto agreement have rewarded developers whose projects would have been built without the carbon funding. "Carbon offsets offer this promise of letting you have your cake and eat it, too," says Michael W. Wara, a Stanford University law professor specializing in environmental policy. "The problem is they don't work very well."