BC Greens call for review of Cap and Trade offset strategy

Pacific Carbon Trust Crown Corporation transfers public money to the private sector

July 29, 2010, Victoria, BC –– “We are concerned that there is no real critical evaluation of the BC Liberals Cap and Trade strategy,” said Green Party of BC Leader Jane Sterk.

“Cap and trade is supposed to be a market based solution that provides a dual financial incentive for corporations, especially the big emitters, to reduce their greenhouse gas emissions. First, their investment will pay off in reduce costs so there is an immediate bottom line benefit. Second, the company can sell their offsets to other corporations who haven’t met their caps. And, the carbon trading exchanges that facilitate the trading are supposed to be and should be within the private sector.

“Corporations who reduce greenhouse gas emissions are to be commended. Greens are all for them making money on their investment. But, the government should not be in the business of marketing offsets. 

“In BC, however, the Liberal government has set up the Pacific Carbon Trust to buy and sell offsets. And there is a catch. The government pays corporation who achieve reductions below their caps. But the buyer of those offsets is the government itself in the form of ministries and government funded agencies like universities. These groups are required to buy offsets and they can only buy offsets from the Pacific Carbon Trust.

“How’s that for hidden taxation or a perverse subsidy? It is simply another creative way that this government has found to transfer public money to private sector.

“BC Greens would require government ministries and agencies to achieve their Greenhouse Gas reduction targets too. But if they can’t, then the money currently being used to buy offsets would need to be invested in projects and strategies that would measurably reduce greenhouse gas emissions in their operations. It would be an internal cap and investment instead of a trade system so the money would stay in the agency to reduce emissions.

“Greens favour a broadly based carbon tax that includes the big emitters over cap and trade although we do see a place for cap and trade to fill in the gaps. There are pros and cons to both strategies. The pro for a broadly based, well priced carbon tax that is that it works. The con is that it is politically risky. It results in cynical things like an “axe the tax” campaign. That’s one of the reasons that the BC Liberals carbon tax is so low and doesn’t include some big emitters.

“The pro for a cap and trade system is that it is politically saleable especially because it is seems to target the big emitters and it takes forever to get up and running, essentially delaying action. The big emitters are the companies that we all like to blame for our predicament maybe because an ugly smokestack is such an easy target. The con is that cap and trade doesn’t work.

“In Europe, which has the most experience with cap and trade, the results have been lousy. It won’t be until planned reforms take effect in 2012 that the European cap and trade system might be effective and those reforms make it look an awful lot like a carbon tax.

“Let’s stop pretending that the BC Liberal government is showing adequate leadership on climate change. The Green Party of BC complimented them for introducing the carbon tax. However, it is way too feeble to really get us where we need to go and it is counteracted by their expansion of fossil fuels at every turn. But on cap and trade, let’s not kid ourselves. The BC Liberal government strategy to use public money to reward their corporate pals for reducing their emissions is unacceptable. Send those who have offsets to sell to the private sector exchanges and stop subsidizing industry,” concluded Sterk.