UPDATED: Cost of carbon offsets called into question

The cost of carbon offsets, which B.C. communities purchase from Pacific Carbon Trust, is being examined.

The provincial government released a statement on Thursday Feb. 14 saying that they will be examining the pricing model for Pacific Carbon Trust (PCT), and, if needed, make whatever changes are necessary to ensure B.C.’s public sector organizations, including schools and hospitals, continue to receive the best value.

The announcement came on the same day The Globe and Mail published an article saying that Pacific Carbon Trust, a crown agency that buys carbon credits and sells them to third parties like municipalities, has been overcharging public sector agencies.

“Critical to ensuring value for money is the full disclosure of what Pacific Carbon Trust pays for offsets,” said Environment Minister Terry Lake. “To date, PCT hasn’t released that information because it was important to protect this commercial information as it helps the Crown negotiate better prices, and it assists offset developers secure better prices when they sell on international markets. As we’re in our third year of buying offsets, and the offset market has matured, we now believe it’s more in line with open government to release this information.”

Public sector organizations are paying $25 per ton for carbon offsets, and The Globe and Mail is reporting that PCT is purchasing those offsets from companies like TimberWest Forest Co., Encana Corp., and International Forest Products Ltd. for between $9 and $19.

The government has committed to evaluating the price PCT is charging, as well as what the crown agency retains as a surplus from the buying and selling of offsets, and what that money is used for.

The province is considering several options once the examination is complete, including reinvesting the money into other programs specific to the public sector organizations, lowering the cost charged to public sector organizations, and holding the retained surplus in the government’s accounts as part of balancing the budget.

Pacific Carbon Trust and their pricing was brought up in a Golden Town Council meeting late in January, when Coun. Keith Hern proposed that the Town remove itself from the BC Climate Action Charter, and stop using funds to purchase offsets.

Hern pointed to the failure of the Clean Development Mechanism (the agency established to facilitate trading in carbon offsets under the Kyoto protocol), as parallel to what is happening with PCT.

“It (PCT) too is doomed to fail, and should be closed,” said Hern.

As a voluntary signatory to the BC Climate Action Charter, which requires its signatories to be carbon neutral by purchasing carbon offsets, Golden is purchasing offsets from PCT. It has been estimated that the Town will spend $14,000 on offsets from PCT in 2013.

*Editors Note: Since the publication of this article, the Golden Star has learned that the Town of Golden does not purchase its offsets from Pacific Carbon Trust, but in fact is able to get from the Columbia Shuswap Regional District for between $15 and $16.50. The estimation of $14,000 spent on offsets in 2013 was based on a cost of $25 per ton from PCT. Since the Town will actually be purchasing the offsets from the CSRD for far less, the estimated cost for 2013 is closer to $9,000.

As of yet, Town Council has not made any decisions on Hern’s proposals.