Why Cap and Trade Sucks

At the core of Cap and Trade carbon controls is trading of tax credits, and the creation and trading of tax credits is a function which actively encourages fraudulent behavior. 

Case in point is the Massachusetts Audubon Society, which announced its intention to log thousands of acres that it was preserving in western Massachusetts so that it could then sell credits for not chopping down the trees.

Of course, it never actually intended to chop down these cheese, this was just a way to create carbon credits that had no basis in reality, and then sell them to polluting business, with no actual reduction in emissions.

In addition to the Mass Audubon Society, the Nature Conservancy is notorious for its sale of meaningless carbon offsets:

The Massachusetts Audubon Society has long managed its land in western Massachusetts as crucial wildlife habitat. Nature lovers flock to these forests to enjoy bird-watching and quiet hikes, with the occasional bobcat or moose sighting.

But in 2015, the conservation nonprofit presented California’s top climate regulator with a startling scenario: It could heavily log 9,700 acres of its preserved forests over the next few years.

The group raised the possibility of chopping down hundreds of thousands of trees as part of its application to take part in California’s forest offset program.

Spoiler, the never intended to log this land.  They are engaging in a humbug.

The environmental organization has become a bunch of snollygosters.

………

The Air Resources Board accepted Mass Audubon’s project into its program, requiring the nonprofit to preserve its forests over the next century instead of heavily logging them. The nonprofit received more than 600,000 credits in exchange for its promise. The vast majority were sold through intermediaries to oil and gas companies, records show. The group earned about $6 million from the sales, Mass Audubon regional scientist Tom Lautzenheiser said.

On paper, the deal was a success. The fossil fuel companies were able to emit more CO2 while abiding by California’s climate laws. Mass Audubon earned enough money to acquire additional land for preservation, and to hire new staff working on climate change.

But it didn’t work out as well for the climate, unless Mass Audubon actually intended to start acting more like a timber company. The project wouldn’t achieve anywhere near the claimed levels of reduced carbon emissions if the nonprofit was getting credits for forests that were never in danger of aggressive logging. And every time a polluter uses a credit that didn’t actually save a ton of carbon, net emissions go up, undermining the point of the program.

………

New research by the San Francisco nonprofit CarbonPlan provides evidence that this is occurring: It shows that landowners in the program routinely maximize the number of trees they assert they could chop down if they weren’t given carbon credits, even if they have little history of logging or have mission statements in sharp opposition to such practices.

The research suggests the program could be significantly exaggerating the amount of carbon savings achieved.

“The nearly universal pattern we see in the data,” said Danny Cullenward, policy director at CarbonPlan and a coauthor of the study, corroborates concerns that “those projects are not delivering real climate benefits.”

(emphasis mine)

If you have direct tax on carbon, you eliminate this sort of fraud, what's more you can treat the carbon tax in the same way that a value added tax is, and refund upon export, and charge upon import, so as to make sure that bad actors on global warming don't get an effective subsidy for that bad behavior.