The Political Economy of Alternative Energy

The idea of a “carbon offset” is that when you do something that causes carbon dioxide emissions to increase you might at the same time donate money to a cause that reduces atmospheric carbon dioxide by a similar amount. However, not all “carbon offsets” truly offer the sort of straightforward one-for-one trade that the term “offset” implies. Some of the “carbon offsets” are nothing but pork-barrel subsidies to energy producers, and their net effect on carbon emissions is problematic.

Subsidizing “good” energy in order to justify using “bad” energy is like eating salad in order to justify eating dessert. It is an exercise in self-deception. (In this context, good energy means energy that is produced with little or no emission of carbon into the atmosphere.)
A personal “carbon offset” can be thought of as a self-imposed tax on the use of bad energy, accompanied by a subsidy of something else. The self-imposed tax is only constructive to the extent that it discourages the person from consuming bad energy. The subsidy is only constructive to the extent that it reduces carbon emissions somewhere else. Subsidizing good energy by no means ensures a reduction in the use of bad energy.

Even subsidizing the planting of a forest may not work. Although the trees will absorb carbon dioxide from the atmosphere, the planting itself may require the use of heavy earth-moving vehicles that emit pollution. Overall, adding forest in one spot may lead to a developer cutting down a forest in a nearby spot.

If you want to fight carbon emissions, then join the Pigou Club and push for taxes on bad energy. If you want to fight carbon emissions at a personal level, then act as if there were a high tax on your use of energy from carbon-emitting sources, and reduce your use of that energy. If you are not really all that worried about carbon emissions, but you get pleasure from making empty, self-righteous gestures, then do what Al Gore does — buy carbon offsets.

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