Thread by @doctorow

The idea of selling indulgences - the right to sin, for a price - has been controversial for the past 500+ years, since Jan Hus's condemnation of the practice. And yet here we are, in the age of #CarbonOffsets, where forgiveneess for torching the planet is for sale. 1/

If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2022/03/18/gre… 2/

The fundamental premise of carbon offsets is that capitalism - that machine for socializing costs and privatizing gains - isn't the problem, it's the *solution*. 3/

Rather than having the state intervene to ban certain conduct, practices or products, we just need to set a price for sin, and the market will trade those indulgences, discover their price, and allocate them in pareto-optimal fashion. 4/

Like all vendable indulgences, offsets are the "bargaining" phase in the (controversial) five-phase grief model. Bargaining ("I'll make billions subsidizing electric cars by selling SUV offsets") is what follows denial ("climate change isn't real").

pluralistic.net/2021/03/24/gre… 5/

The same is true of Papal indulgences: can't I just keep amassing gold off the back of the peasants and then pay to get my camel through the eye of the needle?

But there's a key difference between indulgences and offsets: the market mechanism. 6/

Papal indulgences are a planned economy, with the price set by the spokesman for God Almighty. Offsets, by contrast, are #decentralized, and just about anyone can mint one, provided they can satisfy some criteria. 7/

This is where the magic of the marketplace goes to work. Markets are machines for reducing the cost of goods, by any attainable means. "Efficiency" is ethics-blind. 8/

Sure, capitalism is willing to invest in automation to reduce the labor inputs into a product, but if slavery is cheaper and easier, then slavery it will be. 9/

And technically, a carbon offset isn't "something that reduces carbon emissions." It's "something that satisfies the criteria for a carbon offset." As #GoodhartsLaw has it: "When a measure becomes a target, it ceases to be a good measure." 10/

What happened next is absolutely predictable. Carbon offsets became a market for lemons, because it will always be cheaper - and thus more profitable - to tick all the boxes than it is to maintain the planet's suitability for human habitation. 11/

Or, to cite another law (#GreshamsLaw): "Bad money drives out good." Why would a business pay for a more expensive offset when a cheaper one does the trick? Why would an offset producer pay for a more expensive offset when the market prefers cheaper ones? 12/

It turned everybody into a scammer. Organizations like @nature_org kid themselves that they could do more good in the world with more money, so they transformed themselves into a $1b/year powerhouse of fake offsets. 13/

They're in the business of promising not to log forests that would never have been logged in the first place in order that polluters may go on poisoning us.

pluralistic.net/2020/12/12/fai… 14/

Even when carbon offsets are real - when an actual forest slated for logging was spared thanks to offsets - they are apt to fail, as when that forest is destroyed in climate-change-created wildfires:

pluralistic.net/2021/07/26/agg… 15/

Hypothetically, it might be possible to improve offsets with better oversight and regulation, but that's something the "sustainable investing" industry is pouring millions into blocking.

pluralistic.net/2022/03/11/a-m… 16/

Writing in @business, @ben_elgin dissects the offset fraud revealed by Jim Hourdequin, an offset selling millionaire who made $53m over the past two years by promising that his $1.2b forestry business, Lyme Timber, wouldn't log some of its holdings.

bloomberg.com/news/articles/… 17/

After years of selling phony offsets, Hourdequin has turned whistleblower, and wants to throw the systemic problems in timber offsets into sharp relief. These have been baked into the offsetting system since the beginning. 18/

For example: in 2007, Hourdequin got a fat cash payout from the state of Tennessee for promising not to log 5,000 acres of cerulean warbler habitat. 19/

Several years later, Lyme got *another* payout by converting a promise not to log that forest into carbon offsets - even though Lyme had already entered into a binding agreement not to log it. 20/

That swindle let Lyme sell 20,000 offsets to Chevron California, which let the company continue to extract and refine oil in California. 21/

And because Lyme wasn't ever going to log that woodland, it could sell those offsets for less than a real offset - anything they got was free money.

Hourdequin thinks that airing offsets' dirty laundry will produce demand for *good* offsets, which he can sell. 22/

That's a tall order. His own models shows that real logging offsets cost about $60/ton - and today, logging companies turn a profit by selling for *$3.37/ton*.

He's made this pitch to an industry conference. It got less than 100 views.

23/

He made it to a "major bank." It "declined." He pitched "a couple of large tech companies." They have "thus far demurred." 24/

And, as Elgin points out, even if Lyme does get $60/ton to stop logging its timber, nearby loggers will simply pick up the slack and increase their harvest, a process the industry euphemistically calls "leakage."

gspp.berkeley.edu/assets/uploads… 25/

Between the market for lemons, the bad offsets that drive out the good, and the leakage that "good" offsets, it's hard to credit the idea that we can use markets to incentivize the continued habitability of the planet Earth. 26/

As the @ClimateAd Project reminded us in "Murder Offsets," their 2021 PSA, we solve a lot of serious problems with prohibitions, not markets. You don't get to kill someone and show a murder offset to the cops when they bang on your door.

pluralistic.net/2021/04/14/for… 27/

Image:
Matt Zimmerman (modified):
commons.wikimedia.org/wiki/File:Amaz…

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