The Federal Trade Commission began a series of hearings ^[1] Tuesday into the carbon offset ‘market’ responding to worries from environmentalists that the burgeoning industry is little more than “greenwashing.” Business Week ^[2] recently investigated a number of carbon offset programs and concluded that “some deals amount to little more than feel-good hype.” The Christian Science Monitor ^[3] quotes Sierra Club global warming director Dan Becker, “On the one hand, there is the potential benefit of educating people through offsets. On the other hand, if people view offsets like papal indulgences that allow you to continue to pollute, then it’s probably not a good idea.” 

But the farce behind market inspired solutions does not end with carbon offsets. The same problems that dog carbon offset markets have also rendered the cap and trade systems adopted by Europe and other Kyoto signatories completely ineffective. University of Amsterdam Professor Catrnius Jepma explains ^[4]:

The Stern Report suggests we need a price for a ton of carbon emissions of $20, rising to $30, $40 or even $50 to stabilize [the level of CO2 in the atmosphere] at manageable levels. But there is a good chance that the carbon credits that are meant to provide incentives for reducing emissions will be available for next to nothing.

 There are a number of reasons the price of carbon sank to ineffective levels in Europe including the fact that EU set the carbon caps way too high. But other reasons for cap and trade’s failure are shared with the carbon offset market problem. A Financial Times ^[5]  study “uncovered widespread failings in the new markets for greenhouse gases, suggesting some organizations are paying for emissions reductions that do not take place. … Others are meanwhile making big profits from carbon trading for very small expenditure and in some cases for clean-ups that they would have made anyway.” 

Since virtually all economic activity produces some carbon ^[6], any effective cap and trade system would require legions of skilled technicians to monitor carbon reductions. These technicians simply do not currently exist ^[7]. Furthermore, the leading seller of carbon credits last year was China and it is highly doubtful that if millions of scientists were ever trained, that they would have the access and freedom of movement necessary to do their job adequately.

Without the monitoring necessary to make sure carbon credit benefits are actually being produced, any cap and trade system will ultimately prove ineffective as unverifiable projects flood carbon credit demand with unverifiable supply. The only winners of a cap and trade system will be the lobbyists in Washington who rake in millions finding loopholes for their clients.