Today is the one-year anniversary of the Kyoto Protocol coming into force. In honor of this momentous date, I just purchased a $25 "carbon offset" to neutralize the CO2 emissions that will be pumped into the atmosphere this year by my car. Now, like the producers of "Syriana," I can pretend to be environmentally responsible, even as I sit stuck in traffic in my minivan.
I purchased the offset through an outfit called DriveNeutral, a nonprofit founded by students at the Presidio School of Management in San Francisco. I chose DriveNeutral because it is physically close to me, but there are other organizations that allow individuals to purchase offsets for their own emission-generating activities, such as the for-profit TerraPass, and Carbonfund. There are also a whole host of online calculators for determining just how bad a greenhouse gas contributor you are.
I have mixed feelings about the whole enterprise. DriveNeutral is a member of the Chicago Climate Exchange, which is, right now, North America's only venue for trading carbon credits. I think it's great that dozens of corporations have voluntarily entered into legally binding contracts to reduce their CO2 emissions, and thus created a nascent market for carbon trading. As an individual I can't directly buy an offset on the exchange, but DriveNeutral and groups like Carbonfund aggregate individual offset-purchasers into entities that can participate.
The theory is that by purchasing offsets and taking them off the market, the value of the remaining offsets will rise as the participating corporations seek to meet their commitments. (They have two options: actually lower their emissions, or purchase an offset -- the fewer the offsets available, the higher their price, and thus, the greater the incentive to reduce emissions and invest in sustainable energy technologies.)
But I personally don't stand to benefit from any increases in offset value, no matter how much I spend at DriveNeutral or Carbonfund or TerraPass. And that's where the system breaks down. What's in it for me except an evanescent feeling of environmental purity? That's no way to save the world. I'd much rather be able to directly purchase offsets as an investment, and bet on a tangible reward for participating in the market.
But the only way a fully legitimate market for carbon credits is really going to emerge is if the U.S. starts taking its responsibilities as the world's greatest generator of greenhouse gases seriously, and enacts caps on emissions. Until then, we're all just twiddling our thumbs, and feeling good about our bumper stickers.