Examining The Indulgence Racket
The Washington Post takes a look at the selling of carbon indulgences - oh, excuse me, 'offsets'. It is not a particularly flattering article. There are some operations that are honestly trying to do the right thing, others that are more shaky and some that are completely unproven - and may well be doing no good at all. They quote investigators who say no outright fraud was found, but a lot of the so-called offsets are questionable at best.
Sites such as this one, offering absolution from the modern nag of climate guilt, have created a $55 million industry that once would have been beyond the greenest of imaginations. The market for "voluntary carbon offsets" now encompasses dozens of sellers and thousands of buyers, including individuals and corporations.
But in some cases, these customers may be buying good feelings and little else.
A closer look reveals an unregulated market in which some improvements bought by customers are only estimated, extrapolated, hoped-for or nil. Some offsets support projects that would have gone forward anyway. Others deliver results difficult to measure.
Carbonfund.org, for example, has advertised offsets that finance wind farms and tree-planting projects. But some wind farms said the donations haven't led to anything new. And the benefits from some tree projects were unclear enough that Carbonfund.org no longer uses them to back offsets.
"People can feel very comfortable that they're reducing their carbon footprint" by buying Carbonfund.org offsets, Executive Director Eric Carlson said.
Many offset sellers do seem to deliver measurable cuts to pollution. One Vermont company, for instance, has been praised for offering customers a chance to support projects in development, effectively guaranteeing positive future impact.
Critics say that offset sellers usually have good motives. But the market is confusing enough that, this month, the Federal Trade Commission said it would look into whether consumers are being adequately protected.
"It's just like the Wild West," said Frank O'Donnell of the group Clean Air Watch. "There are no controls, no standards."
It is quite a long article but worth the read. Particularly problematic are the "renewable energy certificates" that are being circulated:
Even more head-spinning are the questions about "renewable energy certificates" from wind farms and solar plants, certifying that they made a certain amount of clean energy.
Offset companies buy these pieces of paper. Then, they use them to claim credit for pollution "avoided" — reasoning that they helped produce energy that would otherwise have come from a polluting coal or natural-gas plant.
Some of the money paid for these certificates stays with the offset vendor or with a middleman. The rest usually winds up with the energy project's builder or the utility that buys its electricity. In some cases, this can amount to something like a donation to a for-profit company: American Electric Power, which sold an undisclosed amount of certificates from wind farms last year, earned more than $1 billion in profit.
This is claiming offsets for energy that was already produced and used - not exactly a real offset. (But extremely lucrative for the business interests, aren't they?) And there are environmentalists who are highly critical of these certificates. It is past time for the FTC to take a hard look at these markets. One of the (unintentionally) funniest things in the article is the guy who brags that he doesn't have to get rid of his gas-guzzling car - because he buys the offsets to assuage his guilt.
Economy, Energy, Environment | Gaius Thursday, 16 August , 2007 | 
Comments Off
