General Motors has yet to return most of the TARP funds sunk into its operations by George Bush and Barack Obama. They claimed to have paid back the loans given the automaker, but as Chuck Grassley angrily pointed out at the time, they paid back the loans using other TARP funding for the cash. Taxpayers still have tens of billions of dollars stuck in GM stock, and whether Treasury ever gets to a break-even point is anyone’s guess.
That hasn’t stopped Chevrolet from dumping $40 million in cash into carbon offsets over the next five years, however:
David Antonioli, chief executive officer of the Voluntary Carbon Standard, called MaineHousing’s work a breakthrough because it paves the way for similar agencies to sell their carbon offsets.
The approval came just in time to get the attention of Chevrolet, which was looking to buy carbon offsets as part of a major public relations push. “We were looking for ways to get folks to view Chevrolet differently,” said Bill Devine, cross brand marketing manager at Chevy.
Chevrolet, the largest brand at General Motors, is positioning itself as GM’s most environmentally-friendly brand. It recently introduced its electrical hybrid, the Volt, complementing its line of fuel-efficient Cruze cars.
Chevrolet decided to invest $40 million on carbon offsets in the next three to five years to promote fuel efficiency in buildings, and solar, wind and wood energy projects. Its goal of reducing carbon emissions by 8 million metric tons nationwide is based on the emissions from the 1.9 million vehicles it expects to sell in the United States in 2011.
Shouldn’t we expect Chevrolet and the rest of GM to start buying back stock at prices which will at least guarantee a break-even point for taxpayers before purchasing voluntary carbon credits? Or is this an attempt by government-controlled GM to transfer its TARP funds to favored programs at the White House? Readers may wonder what other reason anyone would have in buying carbon credits when no laws require it and no authority regulates it to ensure that carbon emissions actually decrease or increase, but Dale McCormick of MaineHousing explains:
McCormick said the agency’s carbon offsets command high prices because of their associated economic benefits, called “multiplier effects” in the world of carbon offsets. The money saved by low-income families on fuel bills will be spent on other purchases, which will stimulate the economy as well. “When we talked about our carbon offsets at conferences, people were drooling over our multiplier effect,” said McCormick.
I believe the “drooling” part, especially. Macroeconomically speaking, does it matter whether the money gets spent on utilities rather than food or clothing? Both go into the private sector. The only “multiplier” is the transfer of wealth from the private sector to the state in the form of carbon credits, which multiplies the state’s abilities to redistribute income.