As popular scientist David Suzuki defines it, “carbon
neutral” is an “easy way to take responsibility
for the greenhouse gas emissions (GHGs) we create every time
we drive our cars, take a plane, or turn on our computers.” Based
on the principle that all emission reductions are created
equal, the concept works, in theory, quite simply. For every
pollutant one adds to the atmosphere, he or she can subtract
it by purchasing “carbon offsets,” credits for
emission reductions achieved by energy efficient projects
elsewhere in the world, such as wind farms, solar installations,
or tree planting initiatives. Anybody can purchase these
credits, apply them to their own emissions and thus reduce
their own net impact on the climate. For less than $100/year
(at $10/ton), for example, most North Americans can offset
their personal GHG footprint.
While the concept of carbon neutrality dates back to at
least a decade, it has only been in the last two or 3 years
that interest in this market has exploded. Beginning with
a few innovative companies and individuals looking for an
opportunity to “do the right thing”; trading
carbon emissions is quickly becoming an environmental commodity
market. With environmental commodity markets being relatively
new; the retail market for “voluntary carbon neutrality” is
newer still. More and more organizations are advertising
their companies, facilities, events or even products as “carbon
neutral.” Yet despite the outburst of interest in the
concept, there is still no standard agreement about what
it means or how it can be verified. With dozens of providers
of carbon offsets in the retail market – and more entering
it all the time – it is quite difficult for potential
purchasers to understand what they are buying and what they
should look for. Because a carbon offset is an intangible
commodity, it is very difficult for consumers – even
environmentally-savvy ones – to differentiate between
a high- quality and a low-quality “offset.”
To truly neutralize the emissions of our travel and of our
lifestyles, there needs to be a clear conceptual link in
how the offsets we purchase are reducing climate emissions
from somewhere else. With very little regulation in this
new market, there is a considerable amount of confusion around
what types of offsets can be applied to make one become carbon
neutral. In the absence of an accepted standard, almost anyone
can offer to sell people almost anything and claim that it
is carbon neutral.
As a response to the absence of effective national and international
policies on climate change, the retail market for voluntary
GHG emission offsets is certainly a sign of our times. With
no federal greenhouse gas emissions reduction mandates in
the US, for example, voluntary carbon emissions reductions
and offset projects have played a key role in corporate and
individual efforts to take action against global warming.
The market offers individuals, businesses and other institutions
(i.e. universities) the opportunity to take personal responsibility
for their own GHG footprint. This in itself is a worthy endeavor.
In 2006, the same year that the New Oxford American Dictionary
chose “carbon neutral” as its “Word of
the Year,” Clean Air-Cool Planet (CA-CP), a non-profit
organization in the US, released the first independent review
of retail carbon offset providers to the public.
Titled “A Consumer’s Guide to Retail Carbon
Offset Providers,” the report was designed to encourage
more transparency and quality to the industry. At the time
the report was released, more than 30 companies and organizations
were in the market, primarily conducting their services to
consumers through websites on the Internet.
As disclosed in the report, describing the retail offsets
market is not easy. The number of entities in the market
continues to grow, and the dozens of organizations already
involved in the market provide widely disparate marketing
and consumer messages. No one can say with certainty how
many offsets have been sold in the retail offsets market
for carbon neutrality purposes. Many retail offset marketers
provide little information about where the money is being
spent or what the criteria is to select the reductions they
sell to consumers (i.e. how they chose these projects and
why these projects are able to generate quality offsets).
Moreover, some suppliers do not fully describe what they
are selling. Offsets from tree planting, for example, are
often sold as if they were exactly the same as any other
offset, even thought the GHG reductions from planting trees
may not be realized for decades into the future.
Retail offset providers face several challenges in supplying
credible, cost-effective offsets to consumers. To understand
these challenges, consider these two characteristics of the
market:
a) Carbon neutrality is usually sold on a year-to-year basis.
This means that there is no guarantee that people will continue
to purchase offsets in the future, and few consumers are
willing to purchase carbon neutrality for multiple years
up front.
b) Offset projects generally result in a “stream” of
emissions reductions throughout the project’s life.
This is usually within 5 or more years, yet if a project’s
entire cost has to be covered by the first year of offset
revenues, these will look very expensive to the consumer.
These dilemmas are often overcome by selling the future
expected reductions up front, yet this poses the risk that
the sale of emissions reductions for anticipated offsets
may never actually occur.
In this “consumer beware” market, people need
to be asking the right questions. CA-CP suggests the following
questions to use when investigating their choices in retail
carbon offset providers:
1) Do you use an objective standard to ensure the quality
of the offsets you sell?
2) Can you show me that the projects in your portfolio would
not have happened without the GHG offset market?
3) Have your offsets been validated against a particular
third-party standard by a credible source?
4) Are you selling offsets
that will accrue in the future? If so, how long into
the future,
and can you explain why
you need to “forward” sell the offsets?
5) Can you demonstrate that your offsets are not being sold
to multiple buyers?
6) What are you doing to educate your buyers about global
warming and the need for global warming policy?
Making the retail offset markets more transparent will
hopefully contribute to their growth, as such markets
hold the remarkable potential to increase
public awareness and policy about global warming, while at the same
time contributing
to real greenhouse gas emission reductions.
TOP Performing Retail Offset Providers:
AgCert/Driving Green TM (Ireland) http://www.drivinggreen.com
Atmosfair (Germany) http://atmosfair.de/index.php?id=9&L=3
CarbonNeutral Company (UK) http://www.carbonneutral.com
Climate Care (UK) http://www.climatecare.org
Climate Trust (US) http://www.climatetrust.org
Co2balance (UK) http://www.co2balance.com
NativeEnergy (US) http://www.nativeenergy.com
Sustainable Travel/My Climate TM (US) http://www.sustainabletravelinternational.org
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