Greenhouse gas credit auction may be necessary, but it needs more transparency (Editorial)

Last month, Colorado held its first greenhouse gas credit auction. 

If that sentence leaves you with more questions than answers, you’re not alone. Colorado’s credit trading program is a strange but important byproduct of our ambitious (and necessary) push to eliminate all greenhouse gas emissions by 2050. 

Part of the state’s greenhouse gas reduction goals is an effort to push Colorado’s 18 largest manufacturers to reduce their emissions by 20%. The credit trading program was devised to help these companies collectively meet these targets: If a company lowers its emissions beyond the mandated benchmark, it is allowed to sell credits to a company that failed to meet the benchmark. 

The program has been decried by some environmental groups as a pay-to-pollute scheme. And, it basically is. Companies that don’t meet their goals can pay money to buy credits to release additional emissions. But, unfortunately, it is an essential part of our emission reduction goals. 

The credit program was created to help companies cope with Colorado’s rightfully demanding changes without simply scaring them off to another state. 

The likelihood of any of our largest manufacturers up and moving is slim, but if Colorado did enact legislation that was punitive enough to push a company out of the state, all we’d be doing is letting them pollute somewhere else. If providing them with some extra runway through the credit system keeps them in Colorado and helps them reduce emissions, that’s a win for our economy and our environment — and it’s a win for the global battle against emissions, because pollution doesn’t exactly respect our borders. 

In other words, it may not be an easy pill for environmentalists to swallow, but it is the sort of ugly compromise that progress is made of. 

On the bright side, not many companies bought or sold credits at this first auction. Just 2,760 credits were sold out of more than 106,000 credits offered.

Due to the opaque nature of the auction and the less-than-ideal secrecy that this whole program has been shrouded in, we can’t entirely understand what these numbers mean. But if things are as straightforward as they appear, we can optimistically presume that the huge gulf between credits sold and credits on offer means that not many companies are in need of credits. 

In other words, most of our largest manufacturers are hitting their targets, and those who aren’t aren’t missing them by much. 

If this assessment is accurate, that is good news. 

The key will be keeping an eye on future auctions to make sure this trend holds as we approach more benchmarks and continue pushing for our climate goals. 

We should also push for a more transparent process. 

According to the Denver Post, the details about which companies bought credits and how much those credits cost are being kept secret by the Colorado Department of Public Health and Environment to maintain a fair marketplace. This may be necessary, but it also prevents the public from having a clear understanding of which companies are meeting their benchmarks and which ones aren’t.

This matters because these companies are actively releasing emissions into our communities. One of the companies that bid on credits was the cement plant near Lyons, Cemex Construction Materials. The people of Lyons and the larger community deserve to know how Cemex is fairing in its push to meet emissions benchmarks. The same is true for the rest of the companies throughout the state. 

The auction was also insufficiently publicized. The Department of Public Health and Environment may be eager to keep the auction fair for the buying and selling companies, but inadequately informing the public does nothing except make people worried they are being kept in the dark (because we are). 

Ean Tafoya, of GreenLatinos, explained to the Post that he had no idea the auction had even happened. “I’m left with more questions than I have answers,” he said. “I’m disappointed there wasn’t more enhanced community engagement on such an important issue.”

We couldn’t agree more. 

No matter how important a program might be, if it is controversial to taxpayers, the state should be doing its best to throw open the shades and let the sunshine in — so that everyone can see that there is nothing to hide. Keeping the shades drawn only raises questions. 

The first auction seems to tell a positive story about progress on our emissions benchmarks, but the lack of transparency makes us uncomfortable. We are all stakeholders in the fight against climate change. The state can and must do more to make this process transparent so the public can keep tabs on this essential issue. 

This is important because Colorado is not on track to meet its goals. 

Compared to the 2005 benchmark, Colorado was able to reduce emissions by 11% in 2020 (the latest available figure). This is a start. But we are not on track to meet our 2025 goal or our 2030 goal.

Of course, manufacturing is only one piece of a very large puzzle when it comes to emission reductions. But every piece is important in this fight. 

The road to our goal of reaching net zero emissions by 2050 will require us to tackle emissions on every front: transportation, energy production, agriculture, manufacturing — the list goes on. To do this, we will have to be creative. We will have to make compromises. We will have to swallow bitter pills. 

Because we are, for the time being, fighting a lonely battle. Not only is President Donald Trump and his willfully ignorant administration slashing renewable energy incentives and climate change science and tracking, but the Environmental Protection Agency recently signaled that it would seek to prevent Colorado from forcing the closure of our coal plants. 

The message this sends is a dispiriting one: At the federal level, even the agencies supposedly designed to protect the natural world are now embracing climate change denialism. We will all suffer for this regression. 

So, as our state carries on in this life-and-death fight for the future health of our planet, let’s continue working together to make progress wherever possible — and let’s also keep pushing for transparency and good faith efforts from everyone involved. 

— Gary Garrison for the Editorial Board