Big carbon? Oil majors turn to nature to help plug revenue gap

Of course there will be a disparity in the price of carbon credits. As much of the cost of each carbon-reducing project is based on labor, credits will produce far less in offsets in the developed world. The cost of planting an acre or hectare of trees in the Global South is much less expensive than in the northern hemisphere.

Greenwashing!

You don't start mopping up the floor when there's a burst water pipe. You first need to turn off the tap. It's not rocket science.

The Californian firm expects to generate $1 billion for landowners over the next 10 years

Unless you’re referring to a BP operation in the USA, it’s basically a UK firm headquartered in London.

Carbon offsets are for those who want to avoid practicing what they preach. It’s a scam but it yet one more way that savvy opportunists can monetize global warming scaremongering.

Carbon offsets are for those who want to avoid practicing what they preach. It’s a scam but it yet one more way that savvy opportunists can monetize global warming scaremongering.

Well the idea behind carbon offsets came from two Reagan administration attorneys, John Henry and C. Boyden Gray. They were younger and outdoorsy, but hiking the Appalachia they could see with their own eyes the effects of pollution on the forests and streams. Being conservative and market oriented they sought a market oriented solution that would somehow price pollution into the cost of goods and services. Back then their idea was called "pay to pollute" and was reviled by environmentalists. Economists however loved the idea and began pushing it but it took about three decades for it to become accepted outside of the economics profession, and especially by those working to reduce pollution and by utilities.

One has to understand that pollution is a cost of production just like labor, capital and raw materials are. It is a real cost. It is not a scam. However it is a cost not normally incorporated into the cost of the product or service that generates the pollution. Instead those who must bear the consequences of the pollution so generated pay the cost. In effect it works just like a subsidy. Someone else pays part of the cost of production allowing the producer to keep their price artificially low. Since price and units sold are inversely related, the lower the price the more of whatever being produced is sold. If the full cost of the pollution generated by the production of a good or service can be incorporated into the cost of production, then the price will reflect the costs of pollution. Since the price will be higher less will be sold and there will be less pollution, which happens to be the economically efficient market solution to the problem.

The crux of the problem is a lack of clear property rights to air and water. If someone owns a lake and the land around it, they can legally prohibit activities that affect the lake and can sue anyone who violates the sanctity of their property. But who owns the Great Lakes? Who owns Lake Tahoe? Who owns the great rivers in the US? Everyone in the US does. Same for the air we breathe? So who gets to sue when someone upwind pumps some pollutant into the air that causes sickness or kills trees downwind? Who pays the cost of that damage? That is what schemes like carbon credits seek to do, force polluters to incorporate the costs of pollution into the price of their product and to give them incentives to clean up their pollution. If you have a better idea the whole profession of economics is eager to hear it.