FTC WILL INVESTIGATE EMISSIONS OFFSETS

Purchasing offsets: “Greenwashing” or a genuine contribution to the fight against climate change? The Federal Trade Commission (FTC) is gathering information and will decide.

An offset is a commitment to apply money in a way that will reduce emissions.

Example of the dilemma: Planting a tree in the VW Forest buys a designated amount of emissions reduction – but the tree must live 100 years to actually offset the allotted emissions. Fair advertising or hype?

F.T.C. Asks if Carbon-Offset Money Is Well Spent
Louise Story, January 9, 2008 (NY Times)

WHO
The Federal Trade Commission (FTC) (Deborah Platt Majoras, chairwoman); Corporations and shoppers seeking carbon offsets; Companies (ex:TerraPass) and nonprofits (ex: Carbonfund.org), intermediaries for offsetting;

click to enlarge

WHAT
The FTC will update its advertising guidelines to include standards for carbon offsetting and other environmental and climate change-related matters.

WHEN
- The FTC has not updated its guidelines in this area since 1998.
- $54 million in carbon offsets were purchased in the U.S. in 2007.
- A series of FTC hearings on the subject began January 8.

click to enlarge

WHERE
- The question the FTC is asking: “Where does offset money go?”
- The VW Forest is in the lower Mississippi alluvial valley.
- Driving offsets sell best in Southern California and suburban Boston.

WHY
- The FTC is the governmental entity charged with regulating advertising claims.
- The last time the FTC visited environmental matters the terms “renewable energy” and “carbon offsets” and “sustainability” did not require precise definitions.
- Examples of offset advertising being considered: (1) Volkswagen’s promise to offset car-buyers’ first year of driving by planting the VW Forest; (2) Dell sells online offsets alongside its somputer products; (3)Continental Airlines allows travelers to calculate the footprint of their trip; (4) GE and BofA have offset credit card rewards; (5) Events like the Super Bowl and the Academy Awards claim they are carbon neutral.
- Carbonfund.org uses offset money in 3 ways: to plant trees; to subsidize wind and solar energy projects; and to purchase credits for a variety of other projects verified by the Chicago Climate Exchange.

click to enlarge

QUOTES
- Chairwoman Majoras, FTC: “…there’s a heightened potential for deception…”
- Daniel C. Esty, director, Yale University Center for Business and the Environment/author, “Green to Gold”: “Is there green substance behind the green sparkle? …The carbon market is a leading example of the challenge of making sure that when people put their money into what they hope will improve their planet, that there is real follow-through.”
- Chris Fischer, general manager, yoga equipment manufacturer/$100,000-per-year offset purchase Gaiam: “Not only did I want to know it existed, I wanted to make sure it was being done the way they said it was being done…It’s not just ‘did they do it?’ — it’s ‘did they do it right?’”