Environment Minister Terry Lake has launched a review of carbon pricing to determine whether public institutions are being overcharged for carbon offsets based on their emissions.
Lake’s announcement is the latest twist in an innovative but controversial effort by the province to reduce greenhouse gas emissions that contribute to climate change.
School boards and hospitals have had to pay $25 per tonne for carbon offsets for the past five years as part of a program to reduce greenhouse gas emissions in B.C.
Pacific Carbon Trust — the Crown corporation set up in 2008 to serve as the go-between in carbon trading — has been paying private corporations between $9 and $19 per tonne for their carbon cutting.
Lake also promised full disclosure of what Pacific Carbon Trust pays for offsets, information that has so far been withheld.
“Critical to ensuring value for money is the full disclosure of what Pacific Carbon Trust pays for offsets,” Lake said.
That information hasn’t been released because confidentiality helped the government negotiate better prices and assists offset developers in obtaining better prices when they sell in on international markets, he said.
“As we’re now 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.”
Critics argue that, in effect, taxpayers are subsidizing private-sector carbon cuts through the diversion of public funds into the trust. In some cases, those corporate greening programs were already in place when the carbon trading rules were enacted.
“Since it was announced, I thought it was ludicrous,” said Denise Harper, school board chairwoman. “The school district doesn’t really have any wriggle room. We’ve done everything in our power to reduce our carbon footprint, but there are limits.”
The district has been paying roughly $60,000 a year since 2010 in carbon offsets, not to be confused with the carbon tax it pays, which amounts to about $120,000 a year.
Despite the controversy, Lake has been a steadfast defender of the government’s carbon-cutting policy, maintaining that B.C. is leading the way in reducing greenhouse gases linked to climate change.
The offset calculations of public institutions have been integral to the government’s claim of being the first jurisdiction in North America to achieve carbon neutrality. The money they pay goes into the fund and is paid out as carbon credits on the basis of energy reductions in the private sector.
“It’s sort of like a shell game,” Harper said. “On the other hand, I think we all have a heightened awareness and it is part of educating the public.”
School District 73 was one of several that complained to the government about having to pay without having access to any funds for reduction. As a result, Victoria has set up a separate $5-million fund to which school boards can apply for carbon-cutting projects.
However, since the school district was already well along in its energy reduction program, significant further cuts are getting increasingly hard to justify on a cost-recovery basis.
“We’ve done the low-hanging fruit and I’d like to say we’ve done the medium-hanging fruit, too,” said Art Macdonald, the district’s facilities and transportation manager. “You start running out of stuff to do. We’re running as efficiently as we can on existing technology.”
Jordan Bateman of the Canadian Taxpayers Federation described the Pacific Carbon Trust as a corporate welfare scheme. Twenty-two of 25 corporate reduction projects would have gone ahead without being subsidized by public dollars, he said, citing a Vancouver Sun investigation.
One of the projects cited in that probe was Pacific Carbon Trust funding for a $30-million wood-waste energy system at Interfor’s Adams Lake sawmill. The project was part of Interfor’s 2003 master plan and construction began in 2006, two years before the carbon trust was established.
SFU economist Mark Jaccard estimated that as few as one-quarter of the corporate projects were legitimate.
“It’s money that flows out of schools, out of classrooms and hospital beds, and into corporate boardrooms,” Bateman said. “It’s not even like we’re getting value for money. Terry Lake should kill it.”
The trust is under review by the auditor-general’s office, a review due to be released this month. Bateman believes the two reviews — internal and independent — are related.
“I think it’s because the government realizes this thing is going to go through major controversy when the auditor-general’s report comes down,” he said.