Should Illinois Follow Norway’s Lead To Break Impasse On Energy Bill By Just Writing A Check? – Wirepoints

By: Mark Glennon*

I honestly can’t decide, for reasons to be made clear, whether this column should be serious or facetious. With your forgiveness for that indecision, here goes:

Norway has turned to an elegantly simple way to make the case that it’s helping lower global temperatures. It sent $17 million to the African nation of Gabon in exchange for that country’s promise to cut down fewer trees. Trees trap carbon dioxide underground, you see, and at $5 per ton of CO2 captured, Norway’s payment is like eliminating 3.4 million tons of carbon dioxide emissions, the thinking goes.

It’s called a “carbon offset.” The concept is that if you can’t reduce your CO2 emissions sufficiently, just pay for something that has the same effect. Carbon offsets are now a huge industry in America and across the world.

Back here in Illinois, negotiations over new energy legislation are stalled, thanks largely to demands by a green coalition intent on fighting warming through severe limitations on carbon dioxide emissions.

Would it be better to answer their demands by following Norway’s lead and writing a check to offset the state’s emissions, and thus claim victory over warming? That’s the question, which may sound silly to some, but to supporters of carbon offsets and many in the environmental community, of which there are many, this should be an entirely sensible question.

The enormously complex energy legislation being negotiated in Springfield has many stakeholders with competing interests pulling in different directions. What may be the strongest faction, however, which has threatened to kill any bill it doesn’t like, calls itself the “Green Caucus” and is comprised of nearly 50 legislators. They have long supported particularly tough goals on CO2 reduction as well as extensive “equity” and social justice goals for the energy sector.

And there’s an overlapping coalition that has long supported CEJA, the Clean Energy Jobs Act, which we’ve written about before here and here. CEJA would be their ideal for energy legislation. Comparable to the Green New Deal pushed at the federal level by Alexandria Ocasio-Cortez, the Illinois CEJA’s central goals have been 100% carbon-free electricity production by 2030, and 100% renewable (meaning no nuclear power as well) by 2050. The impasse is described nicely in a Capitol News Illinois article here.

And now the Green Caucus has made their demand clear: “No climate, no equity, no deal.” If they don’t get most of what they want on CO2 emissions and equity, there will be no energy bill at all, they say.

Would it be more sensible to follow Norway’s lead by just writing a check, thereby disposing with their CO2 reduction demands?

A RealClear article earlier this month described the absurdity in national terms. The U.S. consumption of energy produces about 5 billion tons of CO2 per year. So at $5 per ton, the entire U.S. energy-related CO2 footprint could be offset Norway-style for a paltry $25 billion. That is a lot less, says RealClear, than the Biden’s Administration’s trillion and trillions of dollars.”

Hell, you could chill down the entire planet for chump change, as RealClear went on:  “If global energy-related emissions are on the order of 40 billion tons, then for a ‘mere’ $200 billion in CO2 offsets we could dispense with the supposed need to ‘decarbonize’ our global economy.”

Let’s play with the same concept for Illinois. It’s annual CO2 emissions are about 200 million tons. At five bucks per ton, that would only cost about $1 billion to completely offset the entire state’s emissions, not just in producing electricity but everything. That should be seen as quite a bargain in the eyes of those who see the alternative as mass extinction.

But the Green New Deal has been estimated to cost $10 to $90 trillion. Illinois’ share based on population would be $400 billion, minimum! Clearly Norway’s approach would be far cheaper than a Green New Deal or CEJA that shares the same key goal of zero emissions.

Now, the Green Caucus does seem to be backing off a bit on its emission goals. A recent letter they sent to Gov. JB Pritzker referenced only complete elimination of carbon emissions “from the electric sector by a date certain.”

While the cost of that would still surely be gigantic, we just don’t know exactly how gigantic.

That’s the perennial frustration. Green advocates never put up anything approaching a credible cost estimate. Nor does the state of Illinois. If it’s green, cost does not matter. Illinois business groups repeatedly complain about that, as have we. Even on Pritzker’s compromise bill, Illinois Manufacturers’ Association President and CEO Mark Denzler said this: “Despite repeated requests, the governor’s office has failed to provide rate cost estimates, studies on reliability, or the impact on job loss from companies who will be asked to pay significantly higher electric bills.”

Nor does anybody know the true cost of the social justice goals, which are still must-haves for the Green Caucus. Those goals presumably mean what they included in their CEJA proposal, which brimmed with state micromanagement of a huge part of the economy. It included such things as a state-run Green Bank, a Clean Jobs Workforce Hubs Program; “environmental justice communities”; job creation for ex-offenders and former foster children; “energy empowerment zones”; workforce and training including soft skills and math to ensure communities of color, returning citizens, foster care communities and others understand clean energy opportunities; stipends for jobs and apprenticeships, including funding for transportation and child care; access to low-cost capital for disadvantaged clean energy businesses and contractors; and much, much more.

If the idea of just writing a check and telling the Green Caucus to go away sounds crazy, you should know that carbon offsets are now widely accepted and common around the world. Hundreds of companies, universities, countries, celebrities, cities, sports franchises and more have paid up for carbon offsets in lieu of reducing carbon dioxide emissions. The offsets trade on many secondary markets. Dozens of companies are in the business of creating the offsets.

When you see, for example, a notation at the bottom of your Google pages that says “carbon neutral since 2007” it’s because they claim to have bought off some of their emissions with carbon credits.

Many, but not all carbon credits are scams, as most of the press on this says. The Vatican has been duped among countless other victims. Other examples are here. And even legitimate efforts are subject to persistent, inherent problems, as described here and here. If you want an education on carbon credits it’s easily found online, but be sure to look for both sides.

Personally, I have no doubt they are almost all scams, but I am not trying to make that case here. Instead, let’s acknowledge that, scam or not, carbon credits are part of how the climate establishment works today. Hence my ambivalence that I stated at the start of this article: It may be bullshit, but can we use it to save us from stupid policy?

The plain facts are that Illinois for decades did well based on policy that let the market pick the best rates for consumers. That has been one of Illinois’ few competitive advantages over other states — low electricity costs. But that policy has been gradually displaced by ever increasingly tedious mandates replacing the most affordable with more expensive, green mandates. The pending energy legislation is about forcing what’s even more expensive.

One key problem if Illinois were to focus on carbon credits, is controversy over price. Norway’s $5 per ton has been criticized as far too low, but opinions vary. The RealClear column mentioned above addressed a related problem, which is that the price commonly paid for carbon offsets is far lower than what the Biden Administration sees as the damage done by carbon emissions. That throws a wrench into the administration’s plan.

And that column concludes in a way I can’t improve on:

So either carbon offsets are just a total fraud or the Biden climate plan is a total joke. Or worse, environmental extremist bureaucrats around the world have just been conning everyone for the past 50 years. 

Maybe it’s all of the above.

*Mark Glennon is founder of Wirepoints.