The New Oxford American Dictionary declared “carbon neutral” its 2006 word of the year, for good reason. The Internet is swarming with companies and promotions that trumpet carbon neutrality. Carbon calculators abound, eager to tally a person’s carbon dioxide equivalent emissions or “carbon footprint.”
Carbon neutral is the new yardstick – and the latest environmental rage. Carbon neutrality refers to neutral (zero) total carbon release, created by balancing the amount of carbon released with the amount sequestered or offset. Carbon offsetting is the practice of paying others to remove or sequester carbon dioxide; for example, by planting trees or funding ‘carbon projects’ resulting in the prevention of future greenhouse gas emissions. Carbon dioxide is one of the major greenhouse gases linked to global warming.
Every day, the list of carbon neutrality achievers and wannabes grows. Vatican City became the first carbon neutral state last July. Nike advertises that it will be carbon neutral by 2011. In October, Dell became the first computer maker to commit to carbon neutrality. Even the Dole Food Company, known for pineapples and bananas, is going carbon neutral.
There are a number of ways to become carbon neutral, such as replacing fossil fuel sources of energy with renewable ones. Whole Foods powers its 170-plus stores in the United States and Canada with wind energy and Wal-Mart has announced pilot solar projects for many of its retail outlets. Using public transit, installing solar panels, riding a bicycle and choosing a conference call over a plane flight are all ways of ratcheting down carbon emissions. Still, sometimes a person or a business can’t get to zero without help.
Welcome to the fast growing, unregulated world of carbon offsets – a complicated commodity market in which pieces of projects that reduce carbon dioxide are sold to consumers or companies to compensate for their own emissions.
Commuters or airline passengers can visit a Web site and, credit cards in hand, pay to erase the carbon impact of their trips by supporting projects that reduce carbon dioxide output elsewhere in the world. For example, an airplane trip of 2,000 miles releases one ton of carbon dioxide. Airlines, such as Continental and Air Canada, offer their customers the chance to buy offsets that help finance projects meant to lower global carbon emissions. These projects can range from planting new trees, the flaming of landfill methane, simple energy conservation or the generation of electricity through renewable energy.
Offsets can range in price from roughly five dollars to as much as $50 per ton of carbon dioxide emissions.
Skeptics don’t think offsets do much about global warming other than giving polluting companies and consumers a feel-good cover. An example argument might run like this: the coal-fired plant continues belching but now it’s “carbon neutral” because the company bought a share of a rainforest reforestation project.
Some environmentalists see offsets as positive, albeit with certain caveats. “If the offsets you buy are real and are really reducing emissions beyond what would have occurred, then you are offsetting your emissions,” says Peter Miller, a consultant on the issue to the Natural Resources Defense Council. “But they have to be real and they have to be quantifiable.”
One thing is for sure – the offset industry is booming. The carbon market grew in value to an estimated $30 billion in U.S. currency in 2006.
A December 2006 consumer’s guide, Clean Air, Cool Planet: A Consumer's Guide to Retail Carbon Offset Providers, identified 35 retailers of carbon offsets – some for-profit, some non-profit. A study released six months later by Business for Social Responsibility – a leader in corporate social responsibility research and reporting – examined 51 offset retailers.
There appear to be plenty of customers for those retailers, both individual and corporate. Offsets and the quest for carbon neutrality can improve a company’s reputation, inspire employees and lead to a better relationship with regulators. This is also a relatively inexpensive way to feel good about going green.
Running an average United States house hold generates six tons of carbon dioxide per year – carbon guilt absolved for as little as $30 a ton, less than pennies a day. California Governor Arnold Schwarzenegger buys offsets to cover his personal and official travel on Gulfstream jets leased from NetJets, which in September announced its intention to become carbon neutral. The GOP governor’s offset of choice is the Pacific Forest Trust’s Van Eck Forest project in Humboldt County. The 2,200-acre forest is managed so that the trees store more carbon dioxide. It also provides a habitat for endangered species.
Sustainable Travel International was one of the higher rated companies in the December 2006 report published by Clean Air, Cool Planet, a Portsmouth, New Hampshire-based non-profit company. Sustainable Travel’s offset income, for example, is used to pay for energy efficiency and renewable energy projects in developing countries.
Both Expedia and Travelocity offer travelers the chance to make their journeys carbon neutral. Expedia has partnered with TerraPass, a for-profit offset retailer from Menlo Park. Passengers can offset the carbon emitted from an international flight for under $30.
Still, offset buyers need to exercise a hefty amount of caveat emptor. The industry is relatively new, with no uniform rules governing the sale of offsets. There are several voluntary standards, to which some retailers adhere. Others don’t. It follows that consumers need to ask questions.
Offsets are supposed to provide “additionality.” That means the emission reductions generated by the offsets would not have happened without the offset’s investment. If a company is capturing methane from a landfill because regulators required it, and the company then contracted with a retailer to sell offsets, this it would not be considered “additionality.”
The Business for Social Responsibility study recommends testing an offset’s legitimacy by first determining if the project generates addi tional emission reductions that wouldn’t have happened under “business as usual.” Following that, check if the offset is real: Does it come from a tangible, physical project? Is the reduction measurable? Is it a permanent reduction? Is it verifiable by an independent third party?
“The more these companies see that consumers actually care about quality, the more of a push there will be to take the issues seriously,” says Mark Trexler, whose firm created the Clean Air, Cool Planet offset consumer guide.
Trexler, now the director of consulting for EcoSecurities, cautions against believing that the voluntary offset market will solve the world’s climate change problem.
“An individual negating his or her footprint is great. But say we have a lot of success and five percent of the population does that. That doesn’t solve climate change,” Trexler says. “What the (offset) market gives us is an opportunity to talk to consumers and companies about the problem, to get them to understand the issues and hopefully the market will become a catalyst for policy. We must have a federal and international policy and the market can move us in that direction,” he continues.
“Because this phenomenon is quite new, there is still a lot of gray area. This world of emission credits and offsets is like the Wild West – it’s unsettled territory,” says Pete Price, a Sacramento environmental lobbyist.
