Somewhere around the year 2000 thousands of serious Beanie Baby collectors came to the realization that they had invested in a commodity that consisted of no more than 20 cents worth of cloth and plastic beads. Many were stunned when the collector’s market plummeted because they had anticipated that their investments of $25 $50 or $100 would soon be worth even more — maybe even thousands of dollars. Alas their dreams of untold wealth vanished when Beanie Babies returned to what they were intended to be an inexpensive gift for a child or loved one.
The burst of the Beanie Baby bubble is reminiscent of the latest fad of purchasing carbon credits. For a price a number of companies will now help absolve you of your guilt over producing "greenhouse gases" by driving your car or traveling by plane. These carbon credits or "offsets" are supposed to help by funding green projects such as new wind farms solar installations or measures to control fossil fuel pollution. The credits are sold through companies that act as brokers.
But it is beginning to look like many of those purchasing these credits are buying in terms of intrinsic value the equivalent of a $500 Beanie Baby.
Attendees at this year’s Academy Awards were given a glass statue representing about 50 tons of offsets enough to compensate for a year’s worth of the celebrity lifestyle. The actual offsets were purchased from Terra Pass Inc. a San Francisco company. However a Business Week investigation reveals that 5 out of 6 Terra Pass projects that were supposed to reduce carbon emissions would probably have occurred anyway.
Business Week‘s report published under the title "Another Inconvenient Truth" shows that some of the carbon credits that business and individuals are rushing to buy may be about as genuine as Phil Spector’s hair.
Regardless of whether you accept the dire predictions of global warming or if you question the science behind the prognostications on one thing all agree: nobody wants to get ripped off. No one wants under the guise of reducing carbon emissions to make a charitable donation to a for-profit company.
Now we at the Howard Jarvis Taxpayers Association do not normally weigh in on the eccentricities of the market place. We believe private individuals in the pursuit of happiness have the innate right to pay as much as they want for a Beanie Baby — or anything else for that matter. Whenever I asked my father what something was worth his answer was always the same: "Whatever someone is willing to pay for it."
That tautology may appear useless but it is undeniably true. Paying millions of dollars for a piece of "art" consisting of a small single smudge of paint on a large canvas strikes me as extraordinarily unwise. But it is clearly worth millions to someone if that is what they paid for it.
The point of all this is that private companies and individuals should be able to make any legal uncoerced deal they choose. That is the nature of the free market which has proven itself a far superior economic system than the alternatives.
But when taxpayer dollars are being used it is a different story. We are beginning to see what may become a nasty trend for taxpayers or more technically utility rate payers. In the year 2000 the municipal utility Seattle City Light embarked on a program of becoming carbon neutral. Not a bad idea except rather than clean up its own emissions it went to the market place and purchased credits from elsewhere. This was of course done at ratepayers’ expense.
According to Business Week some of the projects for which Seattle’s’ utility paid were already in place and would have continued without the infusion of hundreds of thousands of ratepayer dollars.
The Washington Supreme Court ruled earlier this year that the utility lacks the authority to charge ratepayers to fight global warming and the future of Seattle City Light’s policy of purchasing carbon credits is now in the hands of the Legislature. Meanwhile on the other side of the country lawmakers in Maine are considering a regional proposal to allow utilities to buy and trade carbon credits.
When it comes to carbon credits taxpayers and voters need to be very suspicious. It is no accident that major corporations are now jumping on the carbon credit bandwagon. Many are already engaged in activities or projects that might qualify for sellable credits. Why not boost the bottom line by having the states or the federal government buying these credits? The answer is because there is no public benefit to pay for that which is already occurring.
Again the private sector is different. If Al Gore wishes to spend his own money purchasing carbon credits to offset his massive carbon footprint for his energy sucking mansion in Tennessee that’s his business. Some of us believe that this is the environmental equivalent of papal dispensations — the rich and famous can unburden their guilt with money.
And while the debate regarding the value to the planet of carbon emission reduction will continue for tax and rate payers it is guaranteed that there is no value if the paid for reductions never take place. We don’t want to find out that instead of cleaning up the environment we have only succeeded in cleaning out taxpayers’ wallets.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization — which is dedicated to the protection of Proposition 13 and promoting taxpayers’ rights.