Q: I have been reading quite
a lot about people going “carbon-neutral” via carbon offsets and carbon credits
but am confused on a couple of fronts. Could you please explain the principle
behind this and tell me if it really is a way to solve the climate change/global
warming issue?
A: Carbon offsets and carbon credits are
different attempts at solving the same problem, one a voluntary action by
consumers and the other used by governments and industry to comply with caps on
the total amount of carbon dioxide they are allowed to emit, under the Kyoto
Protocol, for instance.
Carbon Offsets
A carbon offset is a consumer product in the form of a
certificate representing the reduction of one metric ton of carbon dioxide
emissions. Developers of projects that reduce carbon dioxide emissions can
finance their projects by selling an offset certificate for every ton of
emissions reduced. Typically, a broker collects and merges the credits from
individual projects and resells them to consumers or small businesses that want
to compensate for their own greenhouse gas emissions (through activities like
air and car travel, computer or paper usage.)
Carbon offsetting is not a substitute for reducing one’s
carbon footprint. It merely reduces or negates the impact of greenhouse gas
polluting activities by avoiding an equal amount of pollution through the
development of renewable energy sources, or by sequestering or absorbing a
comparable amount of carbon dioxide that is in the atmosphere through tree
planting projects.
Some people are wary of purchasing offsets that fund tree
planting operations. Most tree-planting projects are sold on a front-loaded
basis. That means you are buying an offset based on an estimate of the
reductions that could be achieved over the next 40 or 100 years. So if you buy a
tree-based offset today, you are sponsoring a reduction that won't
be complete for about 40 years, since trees grow slowly and don't
sequester much carbon until they’re mature –
if they even survive that long. So to be at all effective, your offset
purchase this year should reconcile with your energy usage this year. That means
you should contribute to something permanent and in the present, as well as
something that will immediately reduce the amount of carbon dioxide in the
atmosphere –
something like a solar or wind power project, for instance.
Carbon offsetting has become trendy and some people feel
that it is more of a feel-good thing that provides permission not to make the
more difficult major lifestyle changes that are really required if we are to
solve the climate change problem.
The U.S. Federal Trade Commission –
the federal agency responsible for protecting American consumers from
misleading marketing claims –
seems to have its concerns as well. In early 2007, it began examining the
booming business of selling carbon offsets. Deborah Platt Majoras, chairwoman of
the FTC, has said that with the tremendous growth in the field, there is
potential for abuse of the public
trust and that the commission is concerned that some green marketing assertions
are not substantiated. As the industry, which started in the 1990s, gains
sophistication, it has begun to self-regulate through the creation of standards,
audits and third party verification.
Reducing our dependence on fossil fuels will take time, so
carbon offsets could be seen as a useful interim measure. And given the law of
supply and demand, the more we invest in renewable energy technologies, the
lower their price will become and the more popular they will be.
If you still want to atone for your personal environmental
sins – or are just curious about the size of your carbon footrpint – you can use
one of the burgeoning number of carbon calculators available on the Internet to
see just what it will take to offset your lifestyle.
Carbon Credits
Carbon credits relate to the industrial world, rather than
to individuals. They are the basis of what is called "cap
and trade"
– a sort of accounting scheme that
provides a way for governments to reduce greenhouse gas emissions on an
industrial scale by capping total annual emissions and letting the market assign
a monetary value to any shortfall through trading.
Companies or other groups are issued emission permits and
are required to hold an equivalent number of credits, which represent the right
to emit a specific amount. The total amount of permits and credits cannot exceed
the cap, limiting total emissions to that level. Companies that need to increase
their emissions must buy credits from those who pollute less. In effect, the
buyer is paying a charge for polluting, while the seller is being rewarded for
having reduced emissions by more than was required.
Carbon credits are part of the implementation of the Kyoto
Protocol. For instance, an agreement between
Germany
and Brazil
allows German companies to subsidize purchases by Brazilian consumers of
ethanol-fueled vehicles. The credits that German companies earn from the program
will help Germany
meet its Kyoto targets, while Brazil aims to
profit from the deal by reducing its dependence on imported oil, as well as by
reducing its greenhouse gas emissions.
This scheme has its critics, who see cap and trade as a
license to pollute, rather than as a much-needed incentive to reduce pollution,
or – even
worse –
to offset companies’ polluting activities and the guilt involved by
supporting reduction activities elsewhere in the world. They view such projects
as just another example of companies in the wealthy nations finding quick fixes
in other countries, rather than focusing on real change at home. (There are
rules that heavily penalize firms whose emissions exceed the amount of credits
they possess.) Other critics worry about increased costs that could reduce
competitiveness. Some environment groups see carbon emissions trading as turning
the climate change threat into an opportunity for profit and disagree with
allowing the free market into environmental policy-making.
Nevertheless, cap and trade has been steadily increasing in
popularity, with the trade of credits increasing by 240 percent between 2004 and
2005, according to the World Bank. In terms of dollars, the World Bank estimated
the value of the carbon market to be 11 billion in 2005 and 64 billion in 2007
(US dollars).
No matter whether we’re talking about industry or
individuals, going carbon neutral through offsetting isn’t a substitute for
broadly-based action to reduce emissions levels, but every bit helps. The first
step you can take to fight global warming at a personal level is to reduce your
carbon footprint through conservation. Drive less. Turn down the thermostat. Buy
locally produced goods. Then consider using a well researched carbon offset
program to balance the emissions you cannot reduce.
This is an expanded and updated version of an
article that was published in Natural Life magazine.
Wendy Priesnitz is
the Editor of Natural Life Magazine and a journalist with over 35 years of
experience. She has
also authored nine
books.
Visit her
website.
This is one of a limited number of articles from Natural
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