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Junk Science Judo: Self-defense Against Health Scares and Scams.

Thursday, July 19, 2007
By Steven Milloy

Congress began investigating the carbon offset industry this week. The inquiry could produce some "inconvenient truths" for Al Gore and the nascent offset industry.

Carbon offsets ostensibly allow buyers to expunge their consciences of the new eco-sin of using energy derived from fossil fuels. Worried about the 8 tons of carbon dioxide (CO2) emitted each year by your SUV? Similar to the indulgences offered by Pope Leo X in the 16th century, you can absolve yourself of sin by purchasing $96 worth of CO2 offsets – typically offered at $12 per ton of CO2 emitted – from offset brokers who, in turn, supposedly use your cash to pay someone else to produce electricity with low or no CO2 emissions.

Last year, offsets representing 23.7 million tons of CO2 were sold to businesses and consumers. Sounds like a lot of CO2 emissions were avoided, except when you consider that annual natural emissions of CO2 amount to hundreds of billions of tons.

The physical world aside, the CO2 offset marketplace itself is questionable – hence this week’s congressional hearing entitled, “Voluntary Carbon Offsets: Getting What You Pay For.” The hearing is particularly notable since it was called by a Democrat-run Congress, concerned that global warming alarmism is being jeopardized by dubious marketing and consumer rip-offs involving offsets.

A prime example of dubious offset marketing involves Al Gore’s movie, “An Inconvenient Truth.”

The movie's producers, Paramount Classics and Participant Productions, announced that they purchased offsets from broker NativeEnergy to compensate for 100 percent of the CO2 emissions from the air and ground transportation, hotel use, and production and promotional activities associated with the movie.

So how many offsets supposedly compensated for the CO2 sins of Al Gore and the dozens of individuals credited with producing a movie shot in Nashville, Los Angeles, and Beijing? According to a Web site release from NativeEnergy – which has since been removed – it only cost 40 tons of offsets (worth about $480) to make “An Inconvenient Truth” carbon neutral.

It’s an absurdly low figure given that the making of a 30-second television commercial can easily produce 50 tons and the movie “Syriana” – another NativeEnergy project – was supposedly offset with 2,040 tons worth of offsets.

When I called NativeEnergy to inquire about the 40-ton figure and the Web page that mysteriously disappeared, I was rebuffed and told that the company “does not share information about its clients without their consent.” This immediately made me wonder why the producers of “An Inconvenient Truth” either withheld or revoked their consent since so many of NativeEnergy’s other clients’ offset purchases are so prominently touted on the company’s web site.

NativeEnergy told me I would have to go through Paramount's legal department to obtain the necessary consent. Despite repeated attempts, Paramount never returned my calls – quite odd given the Oscar-winning producers’ mission and audacious self-acclaim of pioneer status as the world’s first carbon-neutral documentary.

NativeEnergy still boasts on its web site about offsetting “100 percent of the carbon dioxide pollution” associated with “An Inconvenient Truth” – but there’s still no mention – let alone any “carbon accounting” – of what that “100 percent” actually represents.

There is reason to explore this issue further than just the spotlighting of more Al Gore-related hypocrisy – the climate alarmist community is even concerned about the offset racket.

As recently reported on the left-wing web site Grist.org (http://gristmill.grist.org/story/2007/6/19/123649/857), it’s worthwhile asking whether carbon offsets are offsetting anything at all.

According to the Grist article, NativeEnergy is selling offsets that are supposed to be helping to pay for wind-generated electricity supplied by the Alaska Village Electric Cooperative (AVEC) to 52 Alaskan villages.

When the Grist reporter first interviewed an AVEC official, the money received from NativeEnergy was described as a “bonus” – a potential problem given that the agreement between AVEC and NativeEnergy requires that the offsets are “a significant contributor to economic viability and the seller’s efforts to build additional wind capacity.” AVEC and NativeEnergy have since backed off the “bonus” characterization, according to the Grist article.

While acknowledging the possibility of a slip of the tongue on the part of the AVEC official, the Grist reporter raised the salient point – presumably because of the black box-nature of CO2 offsets – that we will never actually know whether the offsets purchased through NativeEnergy were used to produce any wind power or reduce any CO2 emissions.

NativeEnergy sells offsets to the public at a cost of $12/ton. But how much of that price goes to reduce CO2 emissions versus NativeEnergy’s pockets? A recent CNNMoney article reported that NativeEnergy raised $250,000 to pay for 50,000 tons of CO2 reductions on South Dakota’s Rosebud Sioux tribe reservation – that is, as little as $5/ton may go toward emissions reduction.

A gross profit margin of $7/ton for NativeEnergy is not bad, especially since there appears to be little follow-up and verification as to whether the consumer’s goal of reducing CO2 emissions are actually accomplished.

Finally, taxpayers provide additional support for projects in which NativeEnergy is involved – the Department of Energy contributed more than $448,000 to the Rosebud Sioux project. The U.S. Department of Agriculture gave AVEC $2.5 million for wind turbines. A Capitol Hill staffer told me that the congressional inquiry would look into the possibility of “double-dipping” in the offset industry.

There’s an awful lot of consumer and taxpayer money flying around offset-related projects with little, if any, accountability. On one hand, it’s good that Congress, in the name of consumer protection, has commenced an investigation of “the efficacy and accounting of these unregulated commodities.” On the other hand, only time will tell if a Congress controlled by the global warming lobby will conduct a bona fide investigation that risks discrediting one of its major themes.

Steven Milloy publishes JunkScience.com and CSRWatch.com. He is a junk science expert, and advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.