Friday, January 25, 2008

Next ice age on hold

A group of scientists argue in the journal Science that carbon credits should not be sold for ocean iron fertilization. Several businesses and research centers are pursuing the technique, known as OIF, which has been called the greatest source of cheap carbon capture and sequestration.

In a nutshell, it works like this: Seed the vast lifeless stretches of ocean with iron and plankton will blossom. They'll capture carbon from the atmosphere and when they die they'll take some of that carbon with them to the ocean depths. It's been compared to tree-planting projects, without the threat of fires which release trapped carbon.

Promoters of the strategy like to cite oceanographer John Martin, who said at the famed Woods Hold Oceanographic Institute: "Give me a half a tanker of iron and I will give you another ice age." Apparently he said it with a mock Dr. Strangelove accent, but no matter. Combine that quote with Kyoto Protocol carbon credits and you've got yourself a business model.

The scientists' letter really only affects the funding of the current research, and that mostly spells bad news for Planktos, a penny stock company that's already on shaky ground, according to its financial reports. Other companies include Climos and Sea Green Ventures, which seems to be based in Florida.

Planktos has been outfitting a research vessel and plans to begin conducting larger scale experiments soon. The other companies and government-backed research centers are also preparing research, but it seems most of results are at least a year away.

The scientists aren't trying to stop the research, just slow one avenue of funding, which is the selling of carbon credits. Sensibly, they simply point out that carbon credits shouldn't be sold until its clear the carbon captured is actually retained."However, the efficiency with which OIF captures carbon from the atmosphere and retains it in the deep ocean, is still uncertain and unintended ecological impacts are not yet fully understood."

It remains a promising technology. This is simply a warning to verifiers to steer clear of Planktos, which has been criticized for loose standards and its rush to sell voluntary carbon offsets, which are targeted at consumers and suffer from flimsy standards.

2 comments: said...

Accounting for GHG offset projects
The science behind many of the GHG offset projects is questionable, and the ability to tie specific dollars donated to a specific ton of GHG offset is impossible to do. It is largely unregulated, and the vast amount of GHG offsets are not recorded or inventoried in any type of actual carbon registry. There is no comparability between offset projects, and the dollars invested.
As the voluntary market increases, the overall dollars invested grows, sooner or later attorneys are going to get involved. At that point the rules will be interpreted, and they will be interpreted by attorneys, CPA’s and outside experts; legal liability will be assigned. Carbon credits will be tied to specific dollars spent.
Once it becomes a legal liability issue, you will see a lot of science based organizations trying to distance themselves from the verification of a specific GHG offset amount.
Is an expert in a field such as oceanography sequestration projects actually going to put his signature on a report that could end up representing millions of dollars of value, and be willing to defend it in court? Professional liability insurance is not something these individuals are familiar with. They will in the future!
It is the consistency and comparability standards that are lacking. Third party verification procedures and compliance testing are still not a requirement of non regulated projects.
There are many organizations offering verification procedures and accounting rules. They are defining their own verification and accounting standards. As long as these companies are only “verifying” feel good type projects they will continue to operate. If they are asked to verify projects that have ended up in a civil law suit, or projects that are attempting to meet specific state or federal regulations, or a cap and trade type credit, they themselves are going to ask for outside rules.
Right now it is safe to assume that any company buying an offset credit is recording it as a public relations expense and is not attempting to recognize it as an asset on the balance sheet. Creating a financial asset on a company balance sheet is going to require a whole lot more rules than we have in place today.

The Carbon Monitor said...

You raise a very good piont, that of legal liability. It's not an issue I've read much about. Have there been suits filed relating to retail carbon offsets?

Some verifiers must be better respected than others. The same for guidelines. For example, the Voluntary Carbon Standards and the U.N.'s Clean Development Mechanism don't allow forestry projects to sell carbon credits or offsets for years after the trees go in the ground. Voluntary retail offset programs seem to sell offsets before trees are planted. I still don't think a single forestry project has been approved under the CDM, and I'd guess stringent guidelines have a lot do with that.

Another issue this brings to mind: Millions of dollars of offsets have been generated in the United States. Will they have any value once the U.S. adopts federal cap-and-trade regulations? I would imagine the Chicago Climate Exchange will ensure credits traded there will be valid under new legislation, but what about suspect retail projects? Allowing those credits to count toward an eventual cap-and-trade law would devalue the entire system.