Are Carbon Offsets for Real?

April 25, 2007

 Even Al Gore, tweaked by conservatives for his multi-home, jet-setting lifestyle, has defended his bona fides by touting his family's purchase of carbon offsets. Lately, this once-obscure strategy to allow people and organizations to buy their way into a smaller carbon emission footprint has been attracting significant funding, and hype - and now, closer examination.

Around the US and the world, many states, cities, companies, institutions, and average folks have been chipping in for carbon offsets to assuage individual and collective environmental guilt.

Some examples:

Why take a closer look at carbon offset programs? In a Mar. 26, 2007, BusinessWeek feature "Another Inconvenient Truth," Ben Elgin wrote: "Done carefully, offsets can have a positive effect and raise ecological awareness. But a close look at several transactions ...reveals that some deals amount to little more than feel-good hype. When traced to their source, these dubious offsets often encourage climate protection that would have happened regardless of the buying and selling of paper certificates. One danger of largely symbolic deals is that they may divert attention and resources from more expensive and effective measures."

Big money's at stake. Elgin writes: "The market for carbon offsets in the U.S. could be as high as $100 million, according to researchers' best guesses. That's up from next to nothing just a couple of years ago. One reason for this growth is that the U.S. remains one of the few industrialized countries that hasn't ratified the Kyoto Protocol."

In your coverage of climate change implications, you'll doubtlessly encounter carbon offset programs at some point. Here are the key questions to ask in order to unravel whether the touted emission reductions are likely to become reality:

PROJECTS, PLEASE?

Can long-term carbon emission reductions be reliably demonstrated? Best bets on this score are energy efficiency projects, or projects that switch existing energy use from fossil-fuel combustion (especially coal) to cleaner, non-burning renewables (such as wind, solar, and geothermal).

For any carbon offset program, ask to see detailed reporting and long-term accounting projections for their project portfolios. The more you see specific energy uses being tied to specific efficiency measures or cleaner energy sources, the more "solid" those numbers are likely to be.

Be skeptical about carbon offsets based on forestry projects, especially tree planting for carbon sequestration. While tree planting sounds nice and is generally an eco-friendly measure for several reasons, research indicates that it's one of the least reliable measures in terms of long-term greenhouse gas impacts. Unpredictable risks such as fire, drought, flood, or infestation can quickly wipe out the gains of these projects.

WHAT ARE YOU REALLY BUYING?

Some carbon offset programs allow participants to invest directly in specific measures, such as a wind farm in Nebraska or a reforestation project in Central America. Others sell more general credits known as "green tags," Renewable Energy Certificates (RECs), or Tradable Renewable Certificates (TRCs). These are the property rights to the environmental benefits from generating electricity from renewable energy sources.

EPA is heavily into carbon offsets: "In FY 2007, EPA is purchasing approximately 330 million kWh of green power annually in the form of either RECs or delivered green power. This amount is equal to 100% of the total estimated annual electricity consumption at all of EPA's nearly 200 facilities across the country." See Greening EPA: 202-564-6371, email.

Ask whether carbon offsets are certified, and get the name of the certifier as well as details on the certification program.

Examples of certifiers include:

Another useful tool is the US DOE green power markets comparison table.

You can also research projects through regional tracking systems such as:

WOULD THIS PROJECT HAVE HAPPENED ANYWAY?

"Additionality" is a key issue too: Would the project have happened without funding from the carbon offset program? Often this is slippery to determine. Pay attention to when your questions along these lines aren't getting clear answers.

The New York Times raised this issue in a July 30, 2006, article, "Capital Pollution Solution," by Jeff Goodell. It's about the Chicago Climate Exchange - "North America's only voluntary, legally binding rules-based greenhouse gas emission reduction and trading system" (CCE: email,312-554-3350.

REDUCING FROM WHAT? CALCULATING YOUR CARBON FOOTPRINT

There are many online calculators that claim to help individuals and organizations calculate their baseline "carbon footprint" (emission levels for which they are responsible) as well as subtract out the impact of various emission-reduction measures, including buying carbon offsets. Here are some examples:

An interesting project is to calculate a local individual's or organization's carbon footprint using several calculators, and note the disparity of results, if any. Read the fine print for the calculators - what do they really count, and how?

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