In defense of carbon offsets

Say what you will about carbon offsets—they went from being a cool new idea to an object of derision in the blink of an eye–there’s no doubt that they are proliferating, as big companies and small ride the green wave.

For those of you who haven’t been paying attention, carbon offsets are way to mitigate greenhouse gas emissions, by taking such steps as financing the planting of trees or renewable energy projects.

Some announcements that have come my way lately:

–The global health care company Abbott announced its fleet of about 6,000 vehicles will go “carbon neutral,” in part by offering hybrids to its sales people but mostly by buying offsets.

–The law firm Arnold & Porter says it will contribute to renewable energy, energy efficiency and reforestation projects to offset the carbon emissions of its business travel.

–Shawn Price, CEO of a Silicon Valley software firm called Savvion, who is also a professional race car driver, says his team (which races in something called the Grand American series) will purchase offsets to counter the carbon pollution generated by the team.

This comes as GE offers its Earth Rewards credit card which provides carbon offsets instead of frequent flier miles, as Dell gives consumers the opportunity to offset the emissions from the computers it sells, and as News Corp. promises to go carbon neutral in large part through the buying of offsets.

Cynics compare them derisively to indulgences flogged to medieval sinners to shorten their time in purgatory. AL Gore’s use of offsets to reduce his carbon footprint—he owns a very big home in a Nashville suburb—has come under attack from the left as well as the right.

The other day, a startup web hosting company called Greenest Host sent me a press release saying its data center will run entirely on solar energy. Its CEO, Mike Corrales, made a point of saying:

It is important to note that this is NOT a green solution because we are buying Renewable Energy Credits or carbon offsets…We are not paying a penance for our emissions sins, we are just not committing the sins in the first place.

It’s not just the idea of offsets that have come under attack. Business Week and the Financial Times published excellent stories showing how they can be manipulated, delivering less than they promise. The FT investigation began with this blunt assertion–”Companies and individuals rushing to go green have been spending millions on “carbon credit” projects that yield few if any environmental benefits”–and then backed it up.

What to make of all this? Here are a few thoughts to help guide a skeptical consumer, employee or company through the world of offsets.

First, look for credible third-party endorsements. Abbott’s announcement includes an endorsement from Environmental Defense. That’s significant. Arnold & Porter, as well as Dell, are working with carbonfund.org, a smaller nonprofit (it’s literally a mom and pop) but one whose partners include Ceres, the Earthwatch Institute, Net Impact and Environmental Defense. (Disclosure: The managing partner of Arnold & Porter, Tom Milch, is a college classmate of mine, a longtime environmental lawyer and all-around good guy.)

Second, understand that offsets are not as good as directly reducing energy or emissions. If a company announces offsets, see what they have done to directly reduce their carbon impact. Do they operate in LEED-certified buildings? Buy recycled goods? Promote tele-commuting? Buy solar or wind power?

If any individual buys an offset, has the person tried first to curb consumption? Drive a smaller car? Eat less meat? I’m an Al Gore admirer but no one needs a house as big as his.

Third, those in the business of buying offsets–particularly big companies—ought to find a way to set up an independent verification system to insure that the offsets do what they are supposed to do. Otherwise the cynics will use the doubts about offsets as an excuse to do nothing.

Recently, I had lunch with a young lawyer named Chris Berendt, who is director of clean energy and environmental markets for Pace Global Energy Services, a global energy consulting firm. “When done right, there’s real value and a real difference made,” he told me. “These are not indulgences.” Sometimes, he said, offsets can help finance a renewable energy project that otherwise would not get built.

Better yet, some well-designed offset programs help people in the developing world trade in dirty kerosene lamps for solar-powered lights or use a solar or biogas cooker instead of burning wood—changes that improve people’s quality of life as well as the environment. The UK-based Ashden Awards for Sustainable Energy highlight the ability of local, sustainable energy to combat climate change and poverty, simultaneously.

Step back a little from the debate about offsets, and you have to be impressed by how fast they have moved from obscurity to the front pages. If they get people to think about climate change, and take a first, small step in the right direction, well, they could turn out to be a gateway to more meaningful change.