Shopping for carbon credits

An environmentally conscious mom discovers carbon offsets are not always a smart buy -- especially from green-washing utility companies like PG&E.

Topics: Global Warming, Al Gore,

Shopping for carbon credits

Like so many people I know these days, I’ve been feeling bad about my energy splurges: the four-block drive to my son’s school on rainy days, the kilowatts frittered away recharging the new latte frother.

I’ve got two young kids, so in my darker moments, I fear these sprees may add to the risk they’ll reach adulthood in a hotter, stormier world. Anyone who hasn’t just returned from a long silent retreat knows that Americans are among the world’s leading energy hogs in billowing emissions of carbon dioxide, the leading greenhouse gas. The United Nations calculates our yearly per capita average at roughly 20 tons per capita, about six times the world’s average. Unless we make deep cuts, soon, we’re in deep trouble, scientists warn.

On the other hand, it’s a drag to bike in the rain, and the frother keeps me out of Starbucks.

So when I realized I could make up for my household’s entire impact on the climate for the price of about half a dozen double lattes per month, I wanted to know more. Apparently, all I’d have to do is buy “carbon credits,” available by clicking a mouse online or by signing up on my monthly utility bill. My money would pay for projects billed as reducing greenhouse gas emissions, theoretically, at least, removing — or “offsetting” — as many tons out of the atmosphere as we’d put in. Somewhere in the world, trees would be planted; methane would be captured from cow poop, solar panels would be installed. Presto, we’d be “carbon neutral.” And I could froth in peace.

America’s embrace of the $100 million global “voluntary carbon credit market” — the estimate comes from the World Bank — reflects our singular moment in history. It’s a moment marked by the gulf between our first wide national recognition of the hugeness of our global warming fix and of our readiness to really take it seriously. With lots of talk, but still no federal law limiting CO2, well-intentioned individuals like me are increasingly shouldering the burden to act. Yet we’re easily overwhelmed by this burgeoning and utterly unregulated industry of carbon claim stakers. Go Zero. Drive Neutral. My Climate. Where on earth to start?



The dawn of the carbon market came in 1989, the year after NASA’s James Hansen made headlines by telling the U.S. Senate that the “greenhouse effect” was already changing our climate. Back then, the global power firm AES invested $2 million in a forestry project in Guatemala, specifically to acquire “carbon credits.” The rationale: Forests take carbon out of the air through photosynthesis and store it as they grow. “Carbon credits” had no legal value anywhere at that point, but AES managers figured they would soon enough. One day, they predicted, laws would limit greenhouse gas emissions but also give companies struggling to cut them at the source the option of “offsetting” them elsewhere.

That day has come for most of the world’s industrialized nations, which have ratified the Kyoto Protocol on climate change, but not for the United States, which hasn’t. Yet while petro-dollar-powered Republican legislators continue to filibuster against the mildest greenhouse-gas-cutting laws — such as one that would have required large electric utilities to obtain at least 15 percent of their electricity from renewable energy sources by 2022 — the voluntary U.S. carbon market has grown at a startling rate, leading to some wacky extremes, like the Hummer I spotted recently with the bumper sticker reading: “My Vehicle Is Carbon Neutral. What About Yours?”

Democratic Party stars like Hillary Clinton and Nancy Pelosi, and cutting-edge corporations like Whole Foods and Yahoo have jumped on the carbon-credit bandwagon, together with Al Gore, who, according to a blogathan of reports this year, offsets the energy used at his 10,000-foot Tennessee mansion. Gore subscribes to a plan offered by his utility company, the Nashville Electric Service, allowing him to pay more each month to subsidize renewable energy. He has also recently retrofitted his home with geothermal energy and relies on a popular American-Indian owned concern called Native Energy to offset some of his travel.

Stanford’s Steve Schneider, a trusted voice on climate issues, told me he’s also a fan of offsets as a “consciousness raising” device — “a way to get people under the tent.” I knew I didn’t want to be left outside that tent. So I ended up devoting a few days to checking out whether buying carbon credits made sense for my family.

The traditional first step for the serious seeker of neutrality is to calculate your household’s “carbon footprint.” I felt pretty smug about how we’d compare with the average U.S. gas guzzler. After all, we live in a small, well-insulated house. I telecommute, mostly, while my husband drives a Prius. I just bought an energy-efficient washing machine. And, yep, we’ve switched some light bulbs to compact fluorescents.

Googling “carbon calculator” filled my screen with dozens of options. I chose a site sponsored by the prestigious World Resources Institute, and filled in the blanks for our monthly gas and electricity usage and the number of miles my family members drive and fly per month.

To my distress, our total came to 24 tons per year — a result accompanied by a gloomy cartoon scene of a green figure enveloped in smog, with what looked like a dying bird flying by. I’d temporarily forgotten that rather major splurge of carbon and finances, a family vacation on Hawaii’s Big Island. Airplane travel is a huge source of fossil-fuel emissions. A single trip to Europe can add three to four tons to your footprint, according to the Tufts Climate Initiative.

Our total in fact ranked “average” on the WRI calculator. “Above average” gets you blue skies and a halo for your green guy; rank below and the sky turns black, a nearby tree loses its leaves, and the figure has a gas mask. (Note to Michael Pollan: The calculator left out the greenhouse gases involved in raising our food.)

Now of course the next ethical step would be to reduce our emissions at their source. And there’s so much we could do, from changing more light bulbs to installing solar panels. But frankly, like most other Americans, we’re not up to that level of sacrifice. So on to the purchase of offsets to atone for those 24 tons.

How much would I have to pay? That turned out to depend on what I wanted to spend. A recent survey of carbon-offset prices found the price of a ton, or “credit,” at anywhere from $5 to $50. I entered my 24 tons on the calculator of Native Energy, figuring if it’s good enough for Gore, it’s good enough for me. It said I could absolve my carbon sins for just $12 a ton, in payments of $24 per month.

On the other hand, I’d recently heard of an even cheaper and more convenient offset project offered by my utility, Pacific Gas & Electric. Starting June 28, through its new Climate Smart program, I could sign up to pay between $4 and $5 a month to offset my family’s electricity use.

I was really curious about this one. It’s the first utility-sponsored, customer-conscience-cleaning offset program, with an all-but-captive audience of about 5 million customers. And it has gotten such good reception — including an EPA award for its director — that other power companies might well follow suit, making them the biggest offset market of all.

But was it just green washing? PG&E, after all, is under heavy pressure in its eco-savvy headquarters city, San Francisco, for not moving fast enough to switch to renewable energy. Elsewhere, power firms are also under the gun. Nationally, they’re responsible for 40 percent of the nation’s greenhouse gas emissions. And, now, through their billing systems, they can get out the word to scores of millions of Americans about the best ways to reduce them.

That’s an instant edge in a highly competitive industry, and PG&E is making the most of it. The company expects to collect $20 million, over three years, from the 5 percent of clients it predicts will sign up to buy the offsets, says PG&E’s director of environmental policy, Wendy Pulling. In the meantime, it will spend another $16 million to administer and market the program. That extra money will come from a rate increase, averaging 2 to 3 cents a month, approved by California regulators. Which means even PG&E’s customers who won’t buy offsets will pay to advertise them.

The P.R. to date has been quite dramatic. The program’s stated goal is to take “two million tons of carbon dioxide from the air … the equivalent of taking 350,000 cars off the road for one year.”

How will it do that? The short answer is no one knows. PG&E is requiring that its offsets be registered and certified with a nonprofit agency called the California Climate Action Registry. The registry in turn requires projects to meet detailed standards and to be certified by a third-party agency. So far not one project had qualified.

Last December, however, PG&E spokesman Keely Wachs announced that customers’ dollars would initially be invested in California forests. Indeed, the project closest to meeting the registry’s standard involves selling credits from the 2,100-acre van Eck Forest in Northern California’s Humboldt County. Laurie Wayburn, president of the Pacific Forest Trust, which is managing that project, predicted it will be certified in August. (Pelosi and California Gov. Arnold Schwarzenegger have already purchased credits from the van Eck Forest, trusting the certification will come.)

As Wayburn explained, the van Eck Forest, unlike many others in the area, is managed in a sustainable manner, with only selective cutting of trees for timber. Foresters have calculated how many tons of carbon are stored through this management style, compared with what would have happened with more aggressive logging. Each of these tons, and thousands more tons the trust predicts will be stored in the future, can be represented as credits and sold. Wachs said that PG&E customers will “own” credits they buy from the utility. On paper, customers are buying into a project — a sustainable forest — that prevents carbon emissions.

This sounds good. But I decided to give it a closer look. I tracked down Charles Michler, an advisor to the Fred M. van Eck Forest Foundation, based at Purdue University in Indiana. Michler told me the forest’s current sustainable management is owed to a conservation easement placed on the property back in 2001.

A conservation easement means that a property’s owners have been paid for their agreement not to develop the land, a stipulation that stays with the land title, forever. But this easement went further, Michler said, including what he called “very strict” guidelines for conservation. In other words, my payments to PG&E for carbon credits weren’t going to plant or protect any trees in the van Eck Forest; that had all already been arranged. Indeed, the foundation board was still deciding what to do with the PG&E money if it came through. One possible use, Michler speculated, might be to fund another building for the forestry department at Purdue — a likely disappointment for PG&E customers who think their money will be used to plant redwoods.

I went back to Wayburn, in charge of the forest’s carbon-selling program, to ask what gives. She spun an analogy for me, comparing buying carbon credits from the van Eck trees to buying organic fruit. The farmer has already taken the risk of using organic methods, she said, hoping that enough buyers will support his choice. You, as the buyer, are not paying for the actual methods as much as sending a signal that you support the organic market.

On the other hand, if you buy organic fruit, you also presumably get something you can eat. And how, I was left wondering, could this equal taking 350,000 cars off the road? I decided not to sign up for the PG&E program.

Planting and preserving trees remains the most familiar offset strategy. Forests capture the imagination, after all. Andrea Tuttle, the former director of California’s Department of Forestry and Fire Protection, used to boast of the Golden State redwoods’ “charismatic carbon.” The popular affection for forests helps explain why at least half of the voluntary carbon-credit market has been devoted to them.

And, as a rule, preventing deforestation does indeed help protect the climate. As trees are cut and burned throughout the world, they release the carbon they’ve stored back into the atmosphere. Deforestation is currently one of the biggest sources of CO2 emissions, accounting for one-fifth of the global sum each year — almost equal to all of the U.S. emissions.

Moreover, carbon benefits aside, forests offer many other basic life supports. They control erosion and flooding, offer habitat to pollinators, and give humans spiritual comfort. None of these values, however, are incorporated into a gross national product — and until they are, forests will be valued only for their timber, which means, of course, they’ll be cut down.

That’s why the carbon-credit movement has stirred profound enthusiasm among embattled forest defenders all over the world, especially in the Amazon, where deforestation is proceeding at a rapid rate. By 2050, recent trends in chain-sawing could eliminate 40 percent of Amazon forests, according to a study published in the journal Nature last year. A big pool of carbon-credit dollars could fix that GNP problem once and for all, perhaps even making the Amazon forest competitive with encroaching soy farms.

That’s part of the hope of a new British eco-philanthropy, Cool Earth, which was launched to a passionate global reception, including an endorsement from Tony Blair. It’s selling protection of Amazon rain forest in Brazil and Ecuador for roughly $140 an acre to customers who sign up on the Internet, with a potential for carbon credits accruing to buyers all over the world. Credits for preventing deforestation are not recognized under Kyoto, but Cool Earth’s founders are betting that will change.

The odd-couple founders, U.K. Conservative Party member Johan Eliasch and former Labour Party minister Frank Field, have had their setbacks, including issues with the legality of titles to some 400,000 acres already purchased by Eliasch. But they’ve doggedly been working with Brazilian government officials to involve local residents in conservation efforts, and to offer an unprecedented solution to the nagging lack of transparency that has plagued similar efforts in the past. Buy one of their Amazon acres and you can monitor it on Google Earth. By the end of the year, Field has said, Cool Earth intends to have microchips placed in trees, allowing ever closer views.

When I last visited the site, 27,034 acres had been sold — testimony to the global zeal to stem the Amazon’s loss.

All this said, forestry carbon credits remain the most controversial part of a controversial industry. Major nongovernmental organizations, including the Tufts Climate Initiative, Friends of the Earth and Greenpeace are staunchly opposed. Forests are temporary, argue these critics. Even if stewards prevent them from being logged, they can’t guarantee against fires or diseases killing trees which would then release all the CO2 they’ve stored. So if you’ve planted trees with a mind to storing extra CO2, you then release extra CO2 into the world.

At a June 28 conference, PG&E’s Pulling suggested the company had focused on forests because of their popularity, but said it didn’t intend to invest in them exclusively. The Climate Registry plans to certify a range of nonforestry projects, including investments in methane digesters on farms (to capture those cow poop emissions).

Even so, some environmental groups are increasingly worried that corporate-sponsored programs such as Climate Smart ultimately undermine substantive climate solutions. A recent declaration by Friends of the Earth, which is opposed to carbon offsetting of all types, states the practice “is being used as a smoke-screen to ward off legislation and delay the urgent action needed to cut emissions and develop alternative low-carbon solutions.”

I returned to Stanford’s Schneider to ask what kinds of offsets he might buy. “It’s legitimate to put windmills in if you displace fossil-fuel power,” he said. “It’s legitimate to put coal emissions underground if you could figure out how to make that permanent. Financing a gas plant in India if they were going to put in coal would also be good.” The key with all of these is they reduce carbon emissions at their source.

Offsets along these lines do exist, in particular by four carbon-credit groups recommended by the Tufts Climate Initiative: My Climate, Atmosfair, Climate Friendly, and Native Energy. My Climate, based in Switzerland, sells credits for projects such as solar energy in Eritrea and biomass in India. Atmosfair, in Germany, underwrites solar power in South Africa and water recycling in a Thai palm oil factory. These projects have an eco-philanthropic appeal; they cut carbon and sometimes create jobs.

But has Schneider invested in any of them? No, he told me, in part because of how much time it would take to figure out which ones are on the level. As we spoke further, he acknowledged some serious ambivalence about the whole industry. “Volunteerism doesn’t work,” he said. “I’ve said this about 85,000 times. It’s about as effective as voluntary speed limits. No cops, no judges: road carnage. No rules, no fines: greenhouse gases. We’re going to triple or quadruple the CO2 in the atmosphere with no policy. I don’t believe offsets are just a distraction. But we’ll have failed if that’s all we do.”

I hung up the phone and made a decision. I certainly agree with Schneider that volunteerism won’t get us out of our fix. But not volunteering leaves me outside that trendy tent.

So here’s what I’m planning to do. After I pay off that washing machine, I’m saving up for double-paned windows, which I can monitor from my living room. I may even buy an acre of the Amazon. Although Cool Earth still looks like a big leap of faith, the situation is urgent, and my kids might find monitoring their piece of the tropics more educational than Runescape. But that’s pure eco-philanthropy. My climate offset strategy will be to budget the $4-$5 a month I would have sent to PG&E to support federal electoral reform. If we can uproot the petroleum lobby, perhaps we can replant Washington with politicians truly committed to legislating our way out of our global-warming fix.

Katherine Ellison lived and worked in Rio de Janeiro for Knight Ridder Newspapers as South America Bureau Chief until September. Currently, she is a Knight Journalism Fellow at Stanford University. She won the Pulitzer Prize for international reporting in 1986.

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