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Auditor General calls Liberals efforts on carbon neutrality a sham


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Say what you want about the carbon neutrality effort itself, this is pretty common for the Liberals...

Auditor general's report says B.C. carbon-neutral effort is a sham

VICTORIA — Auditor general John Doyle calls the B.C. government’s carbon offset program a sham.

But the government and operators of the program are firing back, accusing Doyle of ignoring evidence and lacking the proper expertise to examine the system.

In a
, Doyle says the government spent $6 million on projects to offset the effects of air pollution, but the projects would have gone ahead anyway so the offsets were not credible, and as a result the government can’t claim it has achieved carbon neutrality.

Environment Minister Terry Lake rejected that finding, insisting that the province is the first carbon-neutral government in North America, and that its offset system is based on international standards.

The Pacific Carbon Trust — which manages the offset system — challenged Doyle’s findings, saying the two projects he reviewed had already been audited by two independent auditing firms and passed with flying colours. The Trust says Doyle’s office lacked the expertise to pass judgement on the program.

For his part, Doyle says his office was subjected to an unprecedented and orchestrated campaign of delay and interference, led by the carbon trust and the interests behind carbon offsets.

Carbon offsets program slammed by B.C.Auditor General

B.C.'s Auditor General John Doyle has issued a scathing report on the provincial government's efforts to be carbon neutral, saying efforts to buy carbon offsets to counter its greenhouse gas emissions are not "credible."

Doyle says despite its claims to the contrary, the B.C. government is not meeting its legislated objective to be carbon neutral.

The biggest concern to Doyle is that tens of millions of dollars that are being collected each year from
are not being credibly spent.

"In all, 128 public sector organizations provided $18.2 million to the Pacific Carbon Trust to purchase offsets on their behalf," in 2010, Doyle noted.

Official conclusions:

We concluded that the provincial government has not met its objective of achieving a carbon neutral public sector:

- Government has established reasonable procedures to allow public sector organizations to determine their greenhouse gas emissions. However, government has not yet established criteria to evaluate whether government as a whole is taking sufficient actions to reduce emissions.

- Pacific Carbon Trust has not purchased credible offsets.

- Government is reporting on its efforts to reduce emissions and its progress in achieving a carbon neutral government. However, the PCT has not provided sufficient information in its reporting about the cost and quality of its purchases.


Doyle's office examined two projects which accounted for nearly 70 per cent of the offsets purchased by government to achieve their claim of carbon neutrality:
and the Encana Underbalanced Drilling project near Fort Nelson.

But he concluded, "this claim of carbon neutrality is not accurate, as neither project provided credible offsets."

In other words, the so-called carbon offsets aren't really offsetting emissions as they're supposed to, the report said.

Doyle said his main concern with the projects is that they would have happened anyway without the investment from the carbon offset program.

"In industry terms, they would be known as 'free riders' — receiving revenue ($6 million between the two) for something that would have happened anyway," he said in the report.

"Offsets can only be credible in B.C. if, among other things, the revenue from their sale is the tipping point in moving forward on a project. It must be an incentive, not a subsidy, for the reduction of GHGs."

Confidence broken, Doyle alleges

Doyle also took particular issue with
which is supposed to administer those offsets on behalf of taxpayers.

He found the PCT wasn't being transparent with its activities and wasn't providing enough information about how it is managing public funds.

Doyle also took issue with the trust for organizing what he calls an "orchestrated campaign" against him on the file.

He said carbon trust managers broke his confidence and disclosed information about his audit to industry stakeholders — something he said he's never experienced with any other report.

"Of all the reports I have issued, never has one been targeted in such an overt manner by vested interests, nor has an audited organization ever broken my confidence, as did the senior managers at PCT by disclosing confidential information to carbon market developers and brokers," he wrote.

"I cannot sufficiently express my surprise and disappointment that a public sector entity, with a fiduciary duty to the people of British Columbia, chose to expend its time and energy in this manner, rather than addressing the concerns raised in the audit."

The report was supposed to be released Tuesday but was put on hold after the Speaker of the legislature said there was an apparent breach, and the report had been given to unnamed people prematurely.

Doyle said Tuesday he's often shared his reports with government ministries before their official release, adding he's required to do so under the Auditor General Act. He said he's also had a long-standing practice of providing briefings to ministers and deputy ministers and representatives of some all-party committees and other MLAs.

Government rejects conclusions

B.C. Environment Minister Terry Lake responded to the report by saying the government accepted Doyle's recommendations, but rejected his conclusions.

"The audit was limited in scope — only covering B.C.'s first year as a carbon neutral government and the first two offsets purchased by Pacific Carbon Trust — and does not reflect the changes made to B.C.'s offset system as the market has evolved," Lake said in statement.

"British Columbia became the first carbon neutral government in North America in 2010 and is recognized as a world leader in climate action — I stand by our achievements," said the minister.

Earlier in the day, Independent MLA Bob Simpson said he's never believed the Liberal government's claims on the matter.

"The Pacific Carbon Trust and carbon neutral government absolutely has failed. The other aspect of this that really concerns me is that you have a government hiding behind its carbon neutral claim while it allows greenhouse gas emissions from its industrial strategy to skyrocket."

Simpson also claimed many of the benefactors of the government's carbon neutral policies are major donors to the Liberal party.

Greenhouse gas targets legislated

In 2007, the B.C. Liberal Government passed the
Greenhouse Gas Reduction Targets Act
that put into law B.C.’s targets for carbon reduction: 33 percent by 2020 and 80 percent by 2050.

The Act also included an annual requirement for the public sector to achieve carbon neutrality beginning in 2010, Doyle noted in his report.

The legislation covered the entire public sector, including all core government ministries, school districts, post-secondary institutions, Crown corporations and health authorities.

In July 2011, British Columbia announced it was the first jurisdiction in North America to achieve carbon neutrality.

http://www.cbc.ca/news/canada/british-columbia/story/2013/03/27/bc-carbon-neutral-report.html' rel="external nofollow">
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I agree with the Canadian Taxpayers Federation's view that this entire program is nothing but corporate welfare. I'm glad the AG is exposing this for what it is. The push back from the businesses profiting off this waste of our tax dollars is very strong. They want to discredit the AG's report. I don't blame them, they don't want this sham exposed.

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Independent MLA Bob Simpson wrote an excellent piece exposing more of this sham.

I've always said I think the Liberals are corrupt. anyone who reads this piece without their Liberal glasses on might agree.

Liberal Party Donors Benefitting from Bogus Carbon Offset Projects

What is the Pacific Carbon Trust (PCT)?

Public sector organizations, such as school districts and health authorities, must pay the PCT $25/tonne for their GHG emissions each year. Over the past three years this amounts to over $50 million that has been clawed back from public sector operating budgets. This public money is then given to private companies and organizations, supposedly to enable emission reduction projects that would not have happened without that money. The BC government has used this scheme to declare itself carbon neutral, beginning in 2010.

Who receives money from the PCT?

Companies that received public money include TimberWest ($5.6 million), Offsetters ($2.1 million), and Encana ($1.6 million). Offset payment totals are available here. The PCT also partners with third-party validators and verifiers to verify the legitimacy of these offset projects. Many of these verification companies also “verified” the legitimacy of financial derivatives. (For more on validators, see Bob’s follow-up post)

A significant number of the organizations that have benefitted from the PCT and the project validators are Liberal donors. The PCT paid out $13 million in public funds to companies who have donated over $2.5 million to the Liberal party. Project validators such as KPMG, Ernst & Young, and other organizations involved with the PCT also donated $375,000 to the BC Liberal Party.

A partial list of recipients and donors can be found below.

How did the PCT respond to the Auditor General’s investigation?

While pursuing questions about the PCT’s Great Bear Rainforest carbon offset purchases, Bob uncovered an orchestrated effort by the PCT and their partners aimed at discrediting the Auditor General’s report before it was released. This effort included having vested third parties send letters to the Attorney General and asking various organizations to send letters to the Auditor General challenging his expertise in this area.

A Freedom of Information request from Bob’s office revealed that the PCT was worried about criticism from the media and the Auditor General’s review, which PCT officials said was “spending way more time on the PCT … and glossing over the rest.” Bob raised these questions in the Legislature during Question Period on March 7.

The PCT used public money to defend itself from scrutiny, spending over $100,000 in 2012 for consultants to review their practices and pre-empt criticism from the Auditor General’s office. The money for those reports came from public sector organizations that have paid into the PCT’s $25 million surplus.

James Tansey, of Offsetters Ltd., has played an active role in the campaign to criticize the Auditor General’s report. Offsetters has received over two million dollars from the PCT. (Source)

Who is raising concerns about carbon offset schemes?

While the Auditor General’s report may call into question the legitimacy of the BC government’s carbon offset scheme, his office wouldn’t be the first to do so.

The Vancouver Sun’s Gordon Hoekstra identified numerous PCT offset projects that would have proceeded without PCT money. Projects that would have gone ahead without these funds violate the PCT’s criteria of “additionality” – i.e., projects must not have been able to proceed without PCT funding in order to qualify as offsets. (Source)

A 2012 report by the University of Victoria’s Resource Economics & Policy Analysis Research Group discusses “problems related to additionality” in forestry offsets. (Source)

In March 2013, the Vancouver school district claimed that the compensation it received for paying into the PCT was less than one quarter of what it had paid out.

Finally, there have been confirmed instances of carbon credit fraud throughout the world.

Is the BC government carbon neutral?

The BC government is not carbon neutral. Aside from the lack of credibility of the PCT’s offset purchases, emissions from BC Ferries, school buses, P3s (public private partnerships), BC Hydro’s deforestation activities, and emissions from not-for-profits and private companies that deliver government programs and services are not counted in the carbon neutral calculations.

What needs to be done to reduce carbon emissions in BC?

The focus should be on reducing the 99 per cent of BC’s emissions that are being produced outside the public sector. “Carbon neutral government” gives the false impression that BC is a leader in reducing provincial GHG emissions, when the government’s industrial strategy will ensure we won’t meet BC’s legal requirements for total GHG emission reductions by 2020. Carbon neutral government is a dangerous distraction.

Donations to Liberal Party from Organizations Receiving PCT Offset Money


*Offsetters is not listed as a donor in Elections BC’s database. Donations are from Ledcor Group, which holds a “substantial equity stake in Offsetters.” (Source)

Donations to Liberal Party from Organizations Involved with PCT


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