Carbon offsets purchase under review following scathing report

BC's auditor general claimed the carbon offsets program was "not credible" in achieving the province's carbon neutral initiative.

The Carbon Neutral Kootenays (CNK) consortium is studying its association with the Darkwoods project in light of last week’s review of carbon offsets by the auditor general.

John Doyle, B.C.’s auditor general, referred to the Darkwoods project during his report which claimed the carbon offsets program was “not credible” in achieving the province’s carbon neutral government initiative.

His report caught the attention of the CNK, which alerted local municipalities that it is reviewing its project and will advise communities later this month.

The CNK, funded by the Regional District of Kootenay Boundary (RDKB), Regional District of Central Kootenay (RDCK), the Regional District of East Kootenay (RDEK) and the Columbia Basin Trust, helps participating municipalities in meeting its carbon neutral commitments.

However, in the auditor’s report, Doyle said Pacific Carbon Trust, the crown corporation created to help B.C. reach its carbon neutral goal, was not purchasing credible carbon offsets.

The B.C. Government refuted those comments in a press conference last week featuring B.C. Environment Minister Terry Lake

“We reject entirely his conclusion that the offsets he examined are not credible,” Lake told Canadian Press reporter Dirk Meissner.

Meissner explained the audit examined two offset projects, the Kootenay-area Darkwoods Forest Carbon Project and the Dawson Creek-area Encana Underbalanced Drilling Project.

“We found that both offset projects started without showing that the value of offsets was considered to the extent that it provided the incentive for going ahead – an important consideration for demonstrating the eligibility of offset projects,” stated the report.

“We also found that neither project had a baseline that could be supported.”

That has prompted the CNK to review the Darkwoods project.

In a letter to the municipalities the CNK explained it is not considering buying offsets from Pacific Carbon Trust and if the association with the Darkwoods continues, the CNK would purchase directly from the Nature Conservancy of Canada, which bought the property in 2008.

In its Governance and Operations Committee report to Trail City Council on March 11, city staff warned that the entire cost of the Climate Action Revenue Incentive Program Public Report (CARIP) will incur a significant amount of city personnel time and resources as time goes on.

In order to keep complying and supporting the program the city would eventually have costs over and above the carbon grant—tax back from the province paid on utility bills—and buying carbon offsets, the report noted.

In 2012 the city was able to create a slight residual after buying carbon offsets at a reduced rate through the CNK.

The city submitted its 2012 CARIP report to the province along with its 2012 carbon consumption calculations using the SmartTool, as well as the grant application based on the city’s carbon tax paid.

In short, the city produced 1,274 tonnes of carbon in 2012, including 92 tonnes from third party contracted services.

As a result, the city is planning to purchase $20,000 in carbon offsets from the Darkwoods project council approved of earlier this year.

Perehudoff pointed out on Thursday that, in light of Doyle’s report, the CNK is reviewing the situation before completing the purchase. Once the CNK has come to a conclusion and advised council, it will determine how to proceed.

“It is really unclear what the net gains are at this time and many are questioning the real value based on how this program has been set-up; especially for some public organizations that currently have to pay significantly for offsets at the expense of programs and services,” city chief administrative officer David Perehudoff said in his report, which came out prior to the auditor general’s statement.

“Carbon neutrality from the perspective of being purely carbon neutral is impossible, so that’s where the carbon offsets come in.”

The city spent $30,487 on carbon taxes in 2012 and the carbon tax refund was slightly more.

If the city had to purchase the offsets through the Pacific Carbon Trust, the offset cost would have been $31,850 and have left the city in a slight deficit position.

Meanwhile, the Silver City staff is doing what it can with what it has, said DeRosa, the councillor in charge of the Public Works portfolio.

The city has not identified projects that are going to reduce its carbon footprint immediately, he explained.

“Rather, we adopted a philosophy that when things needed to be repaired or replaced we would do it with the most energy efficient technology available,” he said. “When the need comes we will find the funds to replace or repair or adjust to adopt a carbon reduction gain.”

The city has taken a slow approach to adopting and achieving its goal and it is working for them, with a 30 per cent reduction in power usage with recent HVAC upgrade at the Trail Aquatic Centre.

The program and the overall economic strain on the city versus the real gains in terms of the program design, the cost to deliver, and the real benefits should be measured, said Perehudoff in his report.

“Council may want to ask that the province provide such accounting,” he said. “Each public body is spending significantly to comply and the provincial bureaucracy established to administer the program must be very significant.”

Mayor Dieter Bogs agreed. Right now the CARIP program seems to be a bureaucratic book keeping event.

“Eventually it will change. I’m sure the government didn’t set that up to have a bureaucratic book keeping event,” he said.