One of the final exam essays I wrote for Money, Markets, and Morals on the morality of carbon offsets. Professor Sandel is unlikely to believe that carbon offsets are a morally appropriate mechanism whereas utilitarians might see it as an efficient and effective solution to address global warming.
In 2008, Harvard University committed itself to reducing greenhouse gas emissions by 30% (from 2006 levels) by 2016. According to a Harvard University Task Force Report, some of these reductions would be achieved by improving energy efficiency on campus. But some of Harvard’s contribution to reduced carbon emissions would be achieved by buying carbon offsets—paying others to reduce their emissions.
Is buying carbon offsets a legitimate way for Harvard to achieve its goal of reducing its contribution to greenhouse gas emissions?
Answer with reference to (a) the excerpt below, “Carbon Offsets,” from Sandel, What Money Can’t Buy; and (b) the excerpt below from the 2008 Harvard University Task Force Report on Greenhouse Gas Emissions. Your answer should also draw, where appropriate, on relevant course readings.
Excerpt from Michael Sandel, What Money Can’t Buy: The Moral Limits of Markets
The growing use of voluntary carbon offsets raises a similar question. Oil companies and airlines now invite customers to make a monetary payment to neutralize their personal contribution to global warming. British Petroleum’s website enables customers to calculate the amount of CO2 their driving habits produce and to offset their emmisions by making a financial contribution to green energy projects in the developing world. According to the website, the average British driver can offset a year’s worth of emissions for about £20. British Airways offers a similar calculation. For a payment of $16.73, you can neutralize your share of the greenhouse gases produced by a round-trip flight between New York and London. The airline will remedy the damage your flight does to the heavens by sending your $16.73 to a wind farm in Inner Mongolia.
Carbon offsets reflect a laudable impulse: to put a price on the damage our energy use inflicts upon the planet, and to pay the price, person by person, of setting it right. Raising funds to support forestation and clean energy projects in the developing world is certainly worthwhile. But offsets also pose a danger: that those who buy them will consider themselves absolved of any futher responsibility for climate change. The risk is that carbon offsets will become, at least for some, a painless mechanism to buy our way out of the more fundamental changes in habits, attitudes, and ways of life that may be required to address the climate problem.
Critics of carbon offsets have compared them to indulgences, the monetary payments sinners paid the medieval church to offset their transgressions. A website called www.cheatneutral.com parodies carbon offsets by arranging the purchase ans ale of offsets for infidelity. If someone in London feels guilty for cheating on his or her spouse, he can pay someone in Manchester to be faithful, thus “off-setting” the transgression. The moral analogy isn’t perfect: Betrayal isn’t objectionable only, or mainly, because it increases the sum of unhappiness in the world; it’s a wrong to a particular person that can’t be set right by a virtuous act elsewhere. Carbon emissions, by contrast, are not wrong as such, only in the aggregate.
Still, the critics have a point. Commodifying and infividuating responsibility for greenhouse gases could have the same paradoxical effect as charging for late pickups at the day-care center, producing more bad behavior rather than less. Here’s how: In a time of global warming, driving a Hummer is seen as less a status symbol than a sign of wasteful self-indulgence, a kind of gluttony. Hybrids, by contrast, have a certain cachet. But carbon offsets could undermine these norms by seeming to confer a moral license to pollute. If Hummer drivers can assuage their guilt by writing a check to an organization that plants trees in Brazil, they may be less likely to trade in their gas-guzzler for a hybrid. Hummers may seem respectable rather than irresponsible, and the pressure for broader, collective responses to climate change could recede.
Excerpt, Report of the Harvard University Task Force on Greenhouse Gas Emissions June 2008
The way that the Task Force has thought about the pros and cons of reducing emissions through each of these options is summarized below….
Creating Greenhouse Gas (GHG) offsets (i.e. receiving credits for reductions achieved by helping others improve their energy efficiency…). Offsets have the advantage of letting us sustain services needed for achieving our mission, and reduce GHG and possibly other damages of (others’) energy use. On the other hand, they…carry the liability of letting Harvard appear to be “buying indulgences.”
Any significant reduction in the net emissions of a growing University will require that Harvard create or acquire GHG offsets.
GHG offsets are a vehicle for an agent (individual, firm, university, or political entity) to apply its own expertise, resources and/or capital to reduce GHG emissions from sources external to the agent. In Harvard’s case, the use of GHG offsets would be a means of receiving credit toward our own GHG reduction targets by enabling others to reduce their own emissions. (This could involve installing GHG reduction technology for, taking other direct actions on behalf of, and/or by paying other actors).
Offsets are often discussed as providing a potentially cost-effective means of investing in reducing net GHG reductions. They are generally more expensive than many efficiency improvements, but may be less expensive than some measures to reduce the GHG intensity of our own fuel supply and usage.
Many factors in addition to cost effectiveness need to be considered when making the decision as to where offsets should sit in Harvard’s GHG reduction strategy. One is that they provide a means through which Harvard can reduce the impact of human activity on the global climate even when the need to accomplish aspects of our core mission limit the amount or rate of GHG reductions we can in fact accomplish in our own operations.
Offsets can work along side on-site reductions to provide external GHG reductions that generate a variety of positive co-benefits (e.g. assistance to the community or poverty alleviation in the developing world). Finally, the Task Force found strong support for the value presumption that Harvard should lead by reducing its own emissions to a substantial degree before investing heavily in offsets, even if those offsets would be attractive options in purely financial terms.
In 2008, Harvard University committed itself to a 30% reduction in greenhouse gasses . Harvard would achieve this reduction by reducing its own emissions but also by purchasing carbon offsets. In short, Harvard would pay companies to reduce their carbon emissions and, in exchange, count those reductions as its own. This system of carbon accounting is not unusual—proposals of similar nature have been proposed for various countries around the world. But when considering the disastrous consequences of global warming, carbon credits or carbon offsets seem to be creating a method of exchanging present day dollars for future lives—an uncomfortable trade in any context. While Harvard seems to be shirking its own responsibility by purchasing carbon credits, Harvard’s actions are actually justified, both economically as well as morally, when considered from a consequentialist perspective.
In this paper, a simple consequentialist argument for the legitimacy of Harvard’s decision to purchase carbon offsets. Afterwards, several criticisms of carbon offsets made by Professor Sandel of Harvard University are analyzed to further elucidate and contextualize Harvard’s actions. The analysis will demonstrate that Professor Sandel’s concerns regarding carbon offsets are not likely to be realized in this particular situation. As a result, Harvard’s decision to purchase carbon offsets will be shown to be legitimate.
While most decisions may be considered from several different moral perspectives, Harvard’s decision to purchase carbon emissions is best evaluated from a consequentialist perspective. This is because moral arguments against pollution hinge on the consequences that are realized by carbon emissions; arguments against pollution do not condemn emitting CO2 because it inherently violates some moral principle. Indeed, both supporters and critics of carbon offsets frame their arguments from the consequentialist angle. At first glance, from a consequentialist perspective, buying carbon offsets is a perfectly legitimate, as well as economically efficient, strategy to reduce the overall carbon emissions released to the heavens. As long as the consequences are equal, there is no more or less legitimate strategy of achieving those consequences. One might object to this, saying that some methods of achieving emission reductions would be better than others. For instance, if locking more innocent people in jail somehow caused less carbon to be released, this strategy would be less desirable than alternatives, such as taking shorter showers. However unrealistic, this exaggerated argument demonstrates that the consequentialist perspective must wrestle with the nature of and the components considered in the decision calculus. If more than just the amount of carbon emitted were to be factored into the decision calculus, it would be simple to differentiate between the two exaggerated strategies of carbon reduction. More refined arguments against carbon offset markets seek to demonstrate that the decision calculus that proponents of carbon offsets use are either oversimplified or shortsighted.
Professor Sandel offers a warning against commodifying carbon offsets in his aptly titled New York Times op-ed, “It’s Immoral to Buy the Right to Pollute”. Professor Sandel writes, “turning pollution into a commodity to be bought and sold removes the moral stigma that is properly associated with it.” He worries that by associating carbon emissions with a price, society will no longer contextualize polluting as a moral issue but, rather, as an economic issue. The short term risk of this “crowding out” effect is that by reaching its goal through the purchase of carbon credits, buyers are essentially given the license to pollute, thereby reversing any actual benefits gained from carbon offsets. Secondly, if everyone were to conceive of pollution as an economic issue, in the long run, people may potentially reduce overall pollution less than if pollution would still be contextualized as a moral issue.
Professor Sandel’s concern is also expressed in his book, What Money Can’t Buy, in which he writes, “Commodifying and individuating responsibility for greenhouse gases could have the same paradoxical effect as charging for late pickups at the day-care center, producing more bad behavior rather than less.” This concern, if realized, would be detrimental from a consequentialist perspective. In attempting to reduce global emissions, any policy that actually results in more pollution is a bad policy. But the comparison Sandel makes to the Israeli daycare is not apt in this scenario for several reasons. First, the net result in the Israeli daycare center is being changed due to the policy. This is not the case in Harvard’s situation. The net amount of carbon being emitted into the heavens is the same regardless of which route Harvard chooses to pursue its reduction.
Indeed, the entire idea that an economic perspective of pollution reductions would corrupt the moral nature of the effort is mistaken. Every effort Harvard would have made to reduce carbon emissions would have been economically driven. For instance, it is unlikely that Harvard, had it committed to not purchasing carbon credits, would have chosen to reduce its own emissions in the most expensive manner possible. It is more likely that Harvard would have calculated which method of reduction was the cheapest and taken that route. This characterization demonstrates that such an economic perspective would not affect the morality of such a decision—that is, if Harvard had chosen a cheaper route rather than a more expensive route to reduce its own emissions, one action would not have been more or less moral than the other.
Consider the potential long-term effects of Harvard’s purchasing of carbon offsets. There is the risk that those who look at Harvard as a leader would begin to characterize carbon emissions as an economic issue rather than a moral issue. They would be less incentivized to reduce their own emissions. The assumption that others will see Harvard’s decision as an economic issue is difficult to dispute. However, the Task Force seems to have taken this concern into account. They report, “the Task Force found strong support for the value presumption that Harvard should lead by reducing its own emissions to a substantial degree before investing heavily in offsets, even if those offsets would be attractive options in purely financial terms.” Furthermore, Harvard is not making the decision to cut carbon emissions because of financial reasons. Indeed, it is extremely costly to Harvard to cut emissions, regardless of whether it pays for offsets or not. As such, Harvard’s decision may likely be contextualized as a moral sacrifice, even if Harvard chooses the most economically efficient means of sacrifice. As such, Professor Sandel’s fears are unlikely to be realized.
Through addressing Sandel’s concerns about carbon offsets, it has demonstrated that Harvard’s decision to purchase carbon offsets can be properly contextualized and characterized in a fashion that would alleviate Professor Sandel’s general concerns about carbon offsets. As such, from a consequential standpoint, Harvard’s actions are legitimate and economically justified. This does not mean that carbon offset markets on a broader scale are warranted, or even consequentially good. Rather, Professor Sandel voices serious concerns that need to be factored in the decision calculus when considering such decisions. Without careful planning and strict accounting, Professor Sandel’s fears may be realized in irreversible fashion. Thankfully, it seems unlikely that those fears will plague Harvard’s decisions in reducing its share of carbon emissions.