There are a variety of actions that property developers may take to help solve global warming. One is the purchase of carbon offsets — financial credits representing renewable energy or other facilities that reduce greenhouse gas emissions. Developers may purchase carbon offsets to offset the vehicle emissions associated with their land development projects. This is undoubtedly better than no action at all; however, offsets suffer from a number of functional and philosophical shortcomings that render them less-than-optimal as a solution. There are more direct and effective actions available, and those are what the sustainable development industry should encourage.

There have already been flaws uncovered in the carbon offset industry, ranging from obvious cheating and scams, to sincere firms using flawed calculation methods. For the purpose of this discussion, let’s ignore all of that. Let’s assume that all carbon offsets adhere to a high standard like the Gold Standard.

Even so, there is something less than ethical about paying somebody else to solve the problem you aren’t solving yourself. Especially when they happen to be halfway around the world. Whatever happened to “Think Globally, Act Locally”? That saying is drawn from a distinguished philosophical tradition (Leopold Kohr, E.F. Schumacher, Rene Dubos, etc.) and it is still relevant today.

Carbon offsets perpetuate the fiction that we can pay others to solve global warming while doing nothing to change our own patterns of energy use. All energy experts recognize that it will be extremely difficult to replace the current level of energy production with clean, carbon-free sources. Many claim it is impossible. The task of converting to carbon-free energy will be far easier if it is accompanied by a reduction in the demand for energy. Especially here in the U.S., we cannot simply expect technology to fix all of our carbon emissions. We are so profligate in our usage that some degree of demand reduction will be required. Our challenge is to reduce energy demand while maintaining a high quality of life.

Transportation Demand Management

In the realm of transportation, this goes by the name of transportation demand management. Instead of buying carbon offsets, property developers should create or contribute to TDM measures that will offset the transportation-related carbon generated by their development.

Contributions to TDM measures are more visible, immediate, local and effective than offsets. TDM measures encourage non-auto travel and carpooling, make better use of transit-oriented development, and so multiply the beneficial impacts of transit-oriented development investments. In contrast, carbon offsets may send that money to other countries where they mainly have value as charitable donations to energy projects.

If property developers are required to purchase carbon offsets, they will see it as just another impact fee. Actually, offsets are worse than impact fees because their benefit to the local community is tenuous and abstract. They are difficult for the developer to appreciate and difficult for the public to understand. Carbon offsets, especially for energy projects in foreign countries, do not help development projects win approval like exactions that have clear benefits to the local community.

In terms of reducing carbon, renewable energy sources are less robust and enduring than good urbanism. If the windmill is switched off, its carbon reducing benefits disappear. If it breaks down, if it is dismantled, if grid ties are cut, if the operator goes out of business, then the windmill’s carbon-reducing benefits are gone. In contrast, the carbon-reducing effects of walkable and transit-oriented urbanism are built into the foundations of a place. The benefits of efficient urban design and planning can’t be switched off as easily as power plants.

Switching from an auto trip to a transit trip saves a certain amount of energy, but the presence of transit itself enables efficient neighborhoods that save twice as much energy. That is why it’s incorrect to say “a ton of carbon saved is a ton of carbon saved.” Not every ton is equal. Saving a ton of carbon with TDM leverages the investment more effectively.

An additional benefit of good urbanism is the lifestyles and habits it promotes. The people who live in good urbanism pass along their lifestyle patterns to others by example; the influence can grow over time so that the energy demand reduction impacts will also grow. In contrast, utility-scale renewable energy by itself does little to reduce energy demand or inculcate a culture of energy-efficient lifestyles.

Local Utility Purchases vs. Vehicle Emission Offsets

There is also a difference between purchasing renewable energy from the local utility, and purchasing carbon credits to offset vehicle emissions. The difference plays out in several ways:

  • If I buy 100 percent renewable electricity through my utility, none of my utility bill is used to purchase dirty electricity from suppliers. If I buy carbon offsets, my utility payments are still going to be used to purchase dirty electricity.
  • If I buy renewable electricity through my local utility, the utility gets a market signal that a customer will pay more for carbon-free energy. If I buy carbon offsets, my local utility remains clueless about my preference as a customer.
  • Utilities strive to get power from plants that are as near as possible, in order to minimize transmission losses. If I buy renewable electricity through my utility, there will tend to be benefits to my region beyond carbon reduction, such as reduced SOx, NOx, HC, particulates, ozone and smog. If I buy carbon offsets, my money will likely be supporting a project outside my region or country.