The B.C. Liberals took the lead in trying to reduce the province’s greenhouse-gas emissions and making the government carbon-neutral. It was a commendable goal, but there are serious concerns about one aspect of it — the Pacific Carbon Trust.
The Crown corporation was established in 2008 to help government agencies and other organizations reduce their carbon emissions. Its job is to put money into emission-reduction projects that would not proceed otherwise, but the auditor general says it has failed to prove its dollars are going to projects that meet the test.
The theory is simple, but putting it into action is hard. A business or school or hospital does its best to reduce its emission of carbon dioxide and other greenhouse gases. The emissions it can’t get rid of are calculated, and the institution pays $25 a tonne to the trust. In turn, the trust buys offsets from projects in B.C. that use the money to reduce emissions.
For instance, the trust is investing in a TimberWest project to conserve stands of old-growth trees on Vancouver Island, because trees that are left standing sequester significant amounts of carbon. The trust says it will be the equivalent of taking 117,647 cars off the road for a year.
Complex validation and verification reports are done by outside parties certified by standards organizations.
Among the several yardsticks the trust uses, one is particularly important — “additionality.” The jargon means the project is not business as usual. The trust needs proof that the company or organization was not already planning to proceed with the project. The offset must be a key factor in deciding to go ahead.
That means the trust must see board minutes, business plans or other documents that clearly show the offset was the tipping point.
B.C.’s auditor general, John Doyle, says that isn’t happening. In his recently released audit of the government’s efforts to be carbon-neutral, he looked at the Darkwoods forest-carbon project in southeastern B.C. and the Encana underbalanced-drilling project near Fort Nelson. Between them, they account for 70 per cent of the offsets purchased by the government.
The audit said the $6 million invested in these projects failed expectations because they probably would have gone ahead even if the offsets hadn’t been provided. Encana’s drilling technique would have been “financially beneficial” to the company without offsets, the auditor said; the company started the project in 2008 and drilled several wells before talking to the trust in August 2009. The Nature Conservancy of Canada decided to buy the Darkwoods forest to save it from logging in 2006 and the deal closed in 2008. The conservancy didn’t talk to the trust about offsets until the end of 2009.
The trust argues that no one on Doyle’s staff is certified to audit carbon offsets, and that he ignored many opinions from experts in the field. It says the two projects were checked again and got a clean bill of health.
But Doyle is an experienced auditor who delves into every area of government. If he and his staff aren’t competent to understand the offset system, that suggests its very obscurity should ring alarm bells.
If we are to believe it makes sense to transfer money from cash-strapped schools and hospitals to a natural-gas company with revenues of $8.5 billion, the deal must stand up to external scrutiny.
The trust’s critiques of Doyle’s expertise don’t refute his most significant finding: that the two projects would have proceeded without the offsets. No specialized knowledge is required to make that determination. Even if everything else checks out, the lack of that foundation brings the edifice crashing down.