By KATE WILLSON
Observer Staff
Oct. 18, 2007

Carbon offsets are a crutch, proponents and opponents say.

People should instead reduce to zero their carbon emissions, rendering this booming industry moot. But that’s not economically viable, even for the richest of U.S. citizens, offset supporters say. Airplanes can’t be retrofitted to burn vegetable oil. Most people who rent their homes can’t demand their electricity come from a renewable source.

And companies would go bankrupt if they revamped operations in one fell swoop.

So offsets certainly are a crutch, but a necessary one, they say.

“The first course of action is to take a look at how they [companies] can change their own operations before turning to an external source,” said Samantha Putt del Pino, a project manager on climate change for the World Resource Insitute “But there’s going to be a line where it’s just no longer effective.”

Opponents of offset operations, however, believe the offset crutch will just slow necessary change.

“The sale of offset indulgences is a dead-end detour off the path of action required in the face of climate change,” Kevin Smith wrote in a report for Carbon Trade Watch, a non-profit environmental group based in Amsterdam. “There is an urgent need to return to political organizing for a wider, societal transition to a low carbon economy while simultaneously taking direct responsibility for reducing our personal emissions.”

The Carbon Neutral Myth is an oft-sited report published this year that questions the necessity and transparency of offset firms.

In the report, Smith sites scientist Kevin Anderson of the Tyndall Center for Climate Change Research.

“Offsetting is a dangerous delaying technique because it helps us avoid tackling the task,” Anderson wrote. “It helps us sleep well at night when we shouldn’t sleep well at night. If we had gone to the limit of what we can do in our own lives then I could see it would be a route to go down, but we’ve not even started to make changes to our behavior.”

This is where offset supporters interject by saying that being too rigid in demanding change will lead to complete inaction. They say baby steps are better than standing still.

“We always focus on achieving emissions reductions first,” according to a report by the non-profit group, Clean Air, Cool Planet. “And only then do we recommend that institutions offset what they can’t reduce. All the offsets in the world won’t help us if we in the U.S. don’t make huge reductions in our overall greenhouse gas emissions and affect a transition away from wasteful use of fossil fuels.”

Many climate experts and carbon business leaders said they believe the United States will join the Kyoto Protocol at some point, which would require many U.S. businesses to enter into the U.N.-mandated carbon cap-and-trade system.

A cap-and-trade system sets a limit on the amount of carbon a company can emit, then allows it to buy credits to emit more carbon. In the United States, a voluntary carbon cap-and-trade operation called the Chicago Climate Exchange operates much like the U.N. system.

But individuals are excluded, instead turning to the emerging retail carbon-offset market.

This unregulated market has its own host of challenges.

“In the absence of an accepted standard, almost anyone can offer to sell you almost anything and claim that this purchase will make you carbon neutral,” the Clean Air Cool Planet’s report reads. “Because a carbon offset is an intangible commodity, it is very difficult for consumers – even environmentally savvy ones – to differentiate between a high quality and a low-quality offering. Consumers would benefit from a clear-cut seal-of-approval for retail offsets.”

Native Energy, a leader in the carbon offset market, eagerly awaits a government move to regulate the industry.

“When I first began, there were six or seven competitors. Now we’re up to 70,” said spokesman Billy Connelly, who joined the company five years ago. “There will absolutely be regulations. Twenty-seven states have renewable portfolio standards. That’s more than half of our states that already have those on the books. We all recognize legislation is coming.”

Native Energy offsets carbon for the Hillary Clinton and John Edwards campaigns, Al Gore and Ben & Jerry’s. Democratic Senator Max Baucus recently paid the firm $1,152 to offset 48 round-trip flights between his home state of Montana and Washington.

“I thought it would be a good idea to put into practice personally what we’ve been pushing legislatively,” Baucus said in press release. “Through carbon offsets, we can chip away at the problem while long-term solutions are worked out in Washington.”

Connelly boasted about Native Energy’s strict project requirements. It doesn’t invest reforestation or renewable energy projects that have already been built.

Opponents of carbon-offset firms question how to calculate the carbon sequestered by planting a tree, which can be cut or burned down. Opponents also question whether an individual’s contribution to an already-established project can offset his carbon use.

“Trees are great and we love trees,” said Connelly. “But we shouldn’t be doing that as a means of addressing the climate crisis. If we blanketed the world in plants that would be great but we would still have global warming. That’s what we’ve got to stop. We need to generate energy in a different way. We need to stop burning fossil fuels.”

Native Energy invests in wind and methane projects. It also invests in solar, but the technology is still very expensive. The company provided 25 percent of the construction costs to build the Rosebud Wind Turbine, the first Native American Turbine installed on the Rosebud Sioux Indian Reservation in South Dakota.

“We work with new renewable energy projects,” said Connelly. “We’re unique in the industry in doing so. We contract with smaller projects that need financing and meet the criteria, purchase the lifetime expected output and pay for it in lump sum payments.”

The Center for Resource Solutions has responded to companies like Native Energy, which are calling for an industry-wide standard.

“Several companies are saying ‘just give us some rules,’” said Lars Kvale, the manager of Green-E, a Center project to provide just such a standard. “Many organizations have created standards for offset firms that cater to businesses, but the Center is the only one creating a standard for the retail offset market.”

Kvale said the Center hopes that by the end of the year they can start giving offset firms their Green-E stamp of approval. They already run a similar program for utility companies.

The approval would mean the company meets standard such as transparency - where is the project, what is the project, how are the offsets being calculated. It would assure that the company isn’t double selling – for example, when two customers buy the same acre of trees.

But like so many climate change professionals, Kvale notes the crutch factor.

“Buying offsets will by no means resolve the climate change issue,” he cautioned. “The main thing that needs to happen is climate change policy. That’s what’s really going to drive us. But individuals that are concerned can do something today.”

Start by reducing emissions, Kvale said. “Make your home as energy-efficient as possible. Question the way you travel. Ask your utility provider if it has a renewable energy option.”

Kvale does see potential in the reduction of carbon emissions.

“Even if in 10 years the U.S. has a cap-and-trade system, the policy will basically apply to a small number of very larger companies,” he said.

Brendan Woodward, the founder of offset start-up Standard Carbon, said the industry’s future depends on government action.

“If the government regulates it, then we’ll see a market emerge. Now it’s just regional,” he said. “In the next five years I think we’ll see a consolidation of competing standards and markets. We have to decide who has to reduce, and in the United States that’s not defined. A lot of people think the U.S. will soon join [the Kyoto protocol] and become part of the CDM.”

Standard Carbon joined CDM, the U.N.’s carbon trade market, last month. Woodward said his business plans to develop projects and sell the offsets to the Chicago Climate Exchange.

“That’s the most active trading platform in the U.S.,” Woodward said.

Woodward has two projects slated for development on the west coast - the sale of 80 acres of trees planted along a river, and 60 acres of hardwood forest in a wetland.

“The question is ‘can we fight global warming?’” Woodward said. “The world is trying to answer, and we’re a part of that. It’s challenging to consider how big a problem it is, but it’s fun to be part of the solution.”