Carbon Offset, Caveat Emptor
- Posted by: Ben Jervey
- on May 11, 2009 at 8:30 am
A guide to which carbon offsets actually work (and the rip-offs to avoid)
Two words of advice for anyone looking into carbon offsets: buyer beware. In the wild and unregulated offset marketplace, one particularly inconvenient truth is that plenty of products that promise reductions to offset your own carbon emissions don’t deliver. Now don’t get me wrong—done right, offsets can be a pretty effective way for individuals and businesses to neutralize their climate impact (after, of course, reducing emissions as much as possible). Done wrong, and carbon offsets will get you nothing for something.
“On the surface, offsets sound like a simple transaction,” writes David Fahrenthold in The Washington Post, before summing up the concept nicely: “Generally, the buyer uses an online tool to calculate the carbon footprint—the amount of harmful emissions—of a car, a flight, or a year’s activities. Then the buyer pays an offset vendor to cancel out that footprint. This is done through projects that stop emissions from occurring or remove pollutants from the air.”
Critics—and there are plenty—generally fall into a couple of camps. Some argue that the concept of offsetting is just plain wrong, that it’s analogous to 16th-century Catholics buying indulgences: spend some cash, atone for your sins, and cleanse that guilty soul. Others, including me, don’t have a problem with the idea of offsetting the greenhouse gas pollution that an individual, family, or company isn’t able to reduce, but are troubled by how dubious many offset programs seem to be. (This Onion “Infographic” is possibly the best critique of shady offset products that I’ve seen anywhere.) If you’re trying to figure out if a carbon offset product is going to deliver the reductions promised, or if it’s merely a “rip-offset,” as Joe Romm and others have taken to calling them, there are a handful of red flags to look out for.
Some projects, like the ever-popular planting of trees to sequester carbon dioxide before it reaches the atmosphere, are notoriously hard to measure. With others, it’s a question of permanence. What happens if the biofuels refinery that your dollars supported goes under? Or if there’s a drought and that tree plantation never matures?
But probably the haziest—and certainly most confusing, muddled, and constantly debated—cases have to do with the very wonky notion of “additionality.” Basically—would this project have happened anyway without the funds from folks buying offsets? In other words, if the trees would’ve been planted (or the methane captured from the landfill, or the wind farm built, or any other type of climate mitigation put in place) anyways, then what’s the value of buying the offset?
Fortunately, the offset market is being pushed towards increasing transparency and oversight. More and more third party organizations are coming up with certifications for offset products, and the Federal Trade Commission is holding hearings on how to best regulate the marketing claims in this now $54 million industry.
For now, though, who can you trust, and what should you be wary of?
Trusted Sellers
Native Energy: Through money raised by offsets, this Vermont-based company has helped build 34 new tribal, farm, and community-based clean energy projects. Native Energy is regularly lauded for their ambitious project selection and impact in the communities where their projects take place, and their site is pretty easy to use too.
TerraPass: Has set the standard for transparency and user experience—you can learn everything about their projects and easily track their progress on their website. When selecting projects for their portfolio, they invite customers to ask questions and comment. And their carbon calculator is quite possibly the best in the business.
The Climate Trust: A good option for businesses and organizations. A clunky website, but the Trust regularly gets great marks for offset quality, traceability, and transparency.
Stay Away
The Chicago Climate Exchange: This isn’t an open marketplace for everyday consumers—you wouldn’t buy carbon offsets directly from the CCX—but many vendors offer offsets rooted in CCX’s troublesome carbon credits. In perhaps the most infamous case of offsets-gone-wrong, the City of Chicago bought a bunch of carbon credits from the CCX, most of which went to a biomass power plant in North Carolina that had been in operation since 1990. A broker who handled the deal even revealed that the City’s offset credits “do not have a value in offsetting” carbon dioxide, as they come from an existing energy source.
CCX has been slammed time and time again for working with companies who obviously aren’t offering “additional” emissions reductions. The director of a New Jersey utility that has been selling credits to the exchange admitted to The Wall Street Journal that, “It seemed a little suspicious that we could get money for doing nothing.” Since some offset vendors do use CCX, it’s worth digging into their sites (often in the “projects” section) to see if their products are bundling credits from the Exchange.
Standards and Practices
International Carbon Reduction and Offset Alliance: A staunch advocate of more rigorous industry standards. Founded by TerraPass, Native Energy, and six other of the world’s leading carbon reduction and offset providers, ICROA encourages “the use of real, verified, permanent, additional, and unique carbon offsets as part of an overall reduce-and-offset carbon management strategy.”
The Gold Standard: Created by the designers of the Kyoto Protocol, but widely believed to be the highest standard in the world for carbon offsets. Supported by over 50 NGOs including WWF International, Greenpeace International, and the David Suzuki Foundation, the Gold Standard categorically excludes tree planting, only qualifies energy efficiency and renewable energy projects, and has extremely high additionality criteria.
More to Know
There have been a handful of comparisons of offset vendors, all of which have been debated and argued over at great length. Carbon Concierge uses a somewhat subjective set of weighted criteria called the Carbon Offset Provider Evaluation Matrix to rank all offset providers. Another, the Consumer’s Guide to Carbon Offsets for Carbon Neutrality (pdf), from Clean Air Cool Planet, is too old to really trust, but does list some questions that potential buyers should be asking of their offset vendors, which still apply today:
• Do your offsets result from specific projects?
• Do you use an objective standard to ensure the additionality and quality of the offsets you sell?
• How do you demonstrate that the projects in your portfolio would not have happened without the greenhouse gas offset market?
• Have your offsets been validated against a third-party standard by a credible source?
• Do you sell offsets that will actually accrue in the future? If so, how long into the future, and can you explain why you need to ‘forward sell’ the offsets?
• Can you demonstrate that your offsets are not sold to multiple buyers?
• What are you doing to educate your buyers about climate change and the need for climate change policy?
It’s possible, you see, to find offsets that actually do work, but it’s even easier to find ones that amount to little more than paper certificates delivering feel good hype, Caveat emptor, indeed.
Illustration by Will Etling
DISCUSSION: 10 Comments
I think this is a great article, very well thought out and fair. Too often people assume all carbon offsets are created equal, and either put too much trust in bad ones, or overlook the possibility of good ones. Thanks for writing such a great article.
Don’t forget the Climate Action Reserve(CAR) an offshoot of the California Climate Action Registry. Gold Standard (CDM), VCS and others are following the intense rigor being developed by CAR and will be adopting these protocols as their own. The fact is CAR carbon offset will be head and shoulders in quality above all others.
As North America’s only rules based trading regime, CCX is an easy target, but the comments in this article are unfair and wrong. As a buying member of CCX I have experienced nothing but outstanding delivery of real and verifiable offsets. All accounts are independently audited, and the sorts of irregularities the article describes, while not unknown in other offerings, are simply not true of CCX.
In Asheville, NC they have started a local carbon offset program so that the carbon is offset where it is released. Appalachian Offsets has provided light bulb change outs in low-income city owned housing and is working on raising funds for both weatherization and solar hot water retrofits with local dollars. http://www.appalachianoffsets.org
“…one particularly inconvenient truth is that plenty of products that promise reductions to offset your own carbon emissions don’t deliver.”Offsets are not alone. Energy efficiency (sometimes known as DSM) programs, let us not forget, must also consist of measured and verified energy conservation and savings in kWh to reliably deliver greenhouse gas emissions reductions. There are far too many lighting, HVAC, and other energy savings services/products that don’t meet the test. None of this means we shouldn’t go forward full throttle with such mechanisms. Perhaps carbon offset and EE programs should be coordinated by third parties. We must continuously tweak these types of programs until we are assured by numbers.
Thank you for contradicting the silly notion that buying an offset is akin to a 16th century indulgence. Our family has made changes both major and minor, in a conscious effort to reduce our carbon footprint-from installing solar panels, to biking to work and never, ever idling our car, but short of moving to a completely different country and culture, we still have a carbon footprint that is bigger than Zero. I like being able to contribute to carbon-reducing projects, and the idea of ”offsetting” the carbon emissions that I create but can not eliminate is a handy way to figure out how much to contribute. I like supporting and encouraging people, like farmers and landfill owners, who have ways of making substantial positive impacts on climate change, and buying offsets is one small way to communicate “Yes, thank you for doing the extra work to capture that methane and doing the Right Thing.” Voting the Environment is, of course another important Right Thing to do.
Buyer beware, indeed. However, if you are getting them for free, there are no worries:http://www.freecarbonoffsets.com.
Anon May 11, 2009 at 11:24 pm: There is no denying the fact that CCX is selling “offsets” that cause no verifiable reduction in CO2 emissions. Look no further than the WSJ article in which the actual executive director of one of CCX’s offsetting projects made the eye-popping claim: “It seemed a little suspicious that we could get money for doing nothing.”
For more than a decade, the landfill here [Cape May, NJ] has made extra profit simply by collecting methane given off by rotting trash, and selling it as fuel. Last year, the landfill learned that doing this also qualified it to earn hundreds of thousands of dollars via a new program that pays companies to cut their greenhouse-gas emissions…. “It seemed a little suspicious that we could get money for doing nothing,” says Charles Norkis, executive director of the Cape May County Municipal Utilities Authority…. Over the past two years, landfills from Pennsylvania to North Dakota have started selling extra credits on the Chicago exchange to profit from methane they were capturing anyway. Selling credits is “gravy to us,” says Katherine Vesey, comptroller of the utility authority in Atlantic County, N.J., which was profitably capturing methane for two years before it started selling credits on the Chicago exchange.”
Read the article (and there are dozens more revealing CCX to be nothing more than a peddler of bogus rip-offsets): http://online.wsj.com/article/SB122445473939348323.html
If you’re really a buying member of CCX, you are being ripped off.
Ben, how could you? No mention of Brighter Planet? – sob! – we’re crushed. Seriously, this is a really useful, truth-telling post. (Why is that so hard to come by?) Even for those of us who’re bound and determined to do what we can to stop contributing to global warming, it takes some real study to determine who’s delivering the real deal and who’s not. (Leave it to The Onion to perfectly capture the anxiety. Love those infographics.)Everyone at Brighter Planet has been heads-down working on transforming our website into an honest-to-goodness everyday tool for managing carbon footprint, but someone finally brought it to our attention t’other day. Ian Hough decided to blog about it. Basically, all of us here couldn’t agree with you more; until regulations and a body of commonly held standards fully settle out, it’s really on the provider to prove an absolute commitment to transparency and a rigorous project-development process.
Knowing what benefits are likely to come from such schemes is important. The Forestry Commission of Great Britain has produced a draft code of good practice for UK-based forest carbon projects and is inviting comments. See http://www.forestry.gov.uk/carboncode