With a city motto of "Exclusively Industrial," the town of Vernon was already a pollution magnet. Then offsets made it worse.
you don't have to leave the United States for an object lesson in how an emissions offset system can go wrong. Consider Vernon, California: The tiny city and its neighboring communities have some of the highest air pollution levels in the Los Angeles basin—and it could get worse because of one of the world's first offset initiatives.
In the early '90s, Southern California implemented a federally mandated offset program for the toxic air contaminants known as particulate matter. As the demand for pollution offsets increased, the South Coast Air Quality Management District, which oversees the program, found itself with a tempting option: Instead of holding on to its small quota of offsets set aside for essential services such as schools and fire departments, it could sell them for a healthy profit. With particulate-matter offsets going for $200,000 a pound, the air district stands to rake in about $420 million. Polluters who buy the offsets can save millions over what they would have paid for them on the open market.