Pollution, without all that guilt

By Tom Pelton
Silver Spring, MD (August 4 2007)- One Silver Spring nonprofit sells ‘offsets’ to carbon dioxide, but some are skeptical. Eric Carlson sells an invisible commodity: the soothing of guilt over global warming. And these days, business is hot.


His Maryland-based nonprofit organization, Carbonfund.org, which acts as a middleman for donors who want to reduce greenhouse-gas pollution, saw its revenue jump 20-fold last year, to $850,000. The 3-year-old group, benefiting from mounting public concern about climate change, is one of eight or more fast-growing firms across the country that sell “carbon offsets.”
The industry works this way: People who feel bad about the carbon dioxide pollution created by their lifestyles- for example, flying across the country or driving to the beach- give donations to Carbonfund or other groups, which in turn passes the money on to pollution-fighting projects. In return, donors get bumper stickers proclaiming they’ve done their part to “fight climate change.”
Carlson says he uses the money to reduce the amount of carbon dioxide in the atmosphere through the planting of trees (which absorb the heat-trapping gas as they grow), the construction of wind turbines (which generate electricity without spewing pollution) and other projects. So, in effect, Carlson is making money from people’s anxieties about the burning of fossil fuels, drawing a $95,000 salary from his fund this year, compared with $59,364 last year. But he insists he’s also helping people do good.
“Look at the shirt you are wearing. Look at what you ate for breakfast this morning. Making all that produced carbon dioxide. What are you going to do about it?” asked the 37-year-old former U.S. Environmental Protection Agency energy-efficiency program manager during an interview in his spartan offices in Silver Spring. “These are direct action donations.”
But the growth of this new enterprise hasn’t come without criticism, both of Carbonfund’s specific claims and the broader idea of paying someone else instead of cutting your own energy consumption and pollution. One complaint is that Carbonfund tends to make small donations to multimillion-dollar alternative energy projects years after they’re already built and running. This raises questions about whether Carbonfund’s donations are really achieving anything to reduce carbon dioxide, as the donors intended.
For example, Carbonfund last year contributed $8,000 to an $81 million wind farm in Ainsworth, Neb., that was built in 2005; $3,200 last year to a $40 million wind farm constructed three years earlier in Highmore, S.D.; and $4,000 in 2005 to a $16 million waste-to-energy plant built three years earlier in Chino, Calif.
Chris Busch, an economist at the Union of Concerned Scientists, said that Carbonfund should not claim it is reducing carbon dioxide pollution when it gives money to alternative energy projects that would have been built anyway, without its money. “There’s no way that can be an offset,” he said about Carbonfund’s contributions to these projects. “An offset is a project that wouldn’t have happened otherwise without the offset funding…. This is the problem generally with carbon offsets – there are all sorts of claims about them, and a lack of verification.”
Jennifer Boettcher, program manager at the Nebraska-based National Arbor Day Foundation, said her group received $15,050 from Carbonfund to plant trees. But she said the foundation objects to these trees counting toward carbon reduction credits, which she said are controversial because of the lack of standards in the new carbon-offset industry. “We don’t allow people to claim credits or offsets from our tree plantings,” said Boettcher. “There really isn’t a set formula in place to figure out how much carbon is sequestered by trees.”
Boettcher told The Sun in late July that Carbonfund’s trees hadn’t yet been planted in four national forests, although the National Arbor Day Foundation had received the money in 2005 and 2006. After being questioned by The Sun about why his firm claimed credit for trees that weren’t planted, Carlson called Kevin Sander, director of corporate partnerships at the Arbor Day Foundation, who phoned the newspaper the next day, Thursday, and said all the trees had been planted after all. He said he couldn’t say when.
Carlson said his trees would help the environment by absorbing carbon dioxide as they mature. He acknowledged that his group’s payments to the wind farms were made after were they built, but he said they were important nonetheless. Carlson said the subsidies help make wind generation more profitable and therefore competitive with coal-fired power plants.
Carbonfund doesn’t make direct contributions to projects, but instead traffics in what is essentially a stamp of approval that allows people to claim to be good environmental citizens for buying “green power.”
The concept is built on a bit of a fiction. Electricity is electricity. Electrons generated by wind turbines are identical to those generated by coal-burning plants, Carlson noted, and the electricity is all mixed together in the grid that distributes power to people’s homes. But to make extra profit on the side, wind farms sell both electricity and pieces of paper meant to give people the right to brag that they’re buying “green” power, Carlson said. The sale of these “green tags” or “renewable energy certificates” to Carbonfund and others provide wind farms with about 10 percent to 15 percent more cash than they’d make from simply selling electricity, according to utility officials.
Carlson said his purchase of these certificates reduces carbon dioxide pollution because the money will encourage the construction of more wind turbines. “This enables a customer anywhere in the country to support a wind farm,” Carlson said. “You buy the right to say, ‘I’m supporting green power.'”
Davis Bookhart, director of an alternative energy and conservation program at the Johns Hopkins University, said that even if this “green tag” scheme succeeded in creating more wind farms, it wouldn’t reduce the amount of carbon dioxide pollution in the atmosphere. “Last year, the wind industry grew by a record amount- but that doesn’t mean it reduced the construction of coal-fired powered plants,” Bookhart said. “Our demand for electricity is growing faster than the wind industry’s growth.”
On the other hand, one sure way to absorb carbon dioxide is through plants, said Carol Kinsey, executive director of a nonprofit called Seed Tree USA. She said her group worked with a contractor to plant at least 185,000 trees in Nepal last year, and about 90 percent of the money for that came from Carbonfund. “It’s a good way of completing the cycle and putting the carbon back into the earth,” Kinsey said.
Carbonfund operates out of a bare-bones suite of cubicles in an office building in Silver Spring, not far from the home of Carlson and his wife and co-founder, Lesley. There are no photos on his office walls and hardly any furniture. “We like to keep it efficient – the chandelier doesn’t arrive until next week,” he jokes, “and the Jacuzzi doesn’t work.”
Carlson refuses to detail how much money his charity gives out and he won’t release his organization’s most recent financial disclosure forms, which federal laws require nonprofits to show to the public. “We are in a competitive market,” he said, adding that he doesn’t want other firms to “know what we’re doing.”
As a sign of how freewheeling this new industry is, figures vary widely as to how much it really costs to absorb a ton of carbon dioxide from the atmosphere. For example, the AtmosClear Climate Club offers a bargain-basement rate of $3.56 per ton; Carbonfund, $5.50 per ton for most offsets; TerraPass, $11 per ton; and Myclimate, up to $99 per ton, according to a list of 15 offset firms compiled by Ecobusinesslinks.com.
Carlson said the carbon offsets sold by the Carbonfund are trustworthy, in part because they are verified through an independent third party, the Center for Resources Solutions, which created a “Green E” certification logo that Carbonfund posts on its website. But a manager of the “Green E” program, Lars Kvale, said his center hasn’t checked any audits or made any visits to verify any of Carbonfund’s projects, and it doesn’t even have a program to certify carbon offsets. “It’s very much an unregulated market,” Kvale said.
More than 10,000 customers found Carbonfund last year through the Internet. At the Carbonfund.org Web site, customers can pay $99 for a bumper sticker and the right to proclaim they’re “zero carbon.” The payment is based on a calculation that the average American produces about 23 tons of carbon dioxide a year. Carbonfund estimates that it costs about $99 to make up for that amount of pollution by planting trees or generating alternative energy.
People visiting Carbonfund.org’s website can also use an online “carbon calculator.” They can plug in the miles they drive, in what kind of vehicle, how far they fly, and even what kind of wedding they’re planning. The calculator will spit out a dollar figure customers can pay to Carbonfund to compensate for their lifestyle.
To encourage its customers to use less energy, Carbonfund offers conservation tips and advises: “Reduce what you can – offset what you can’t.” Betsy Johnson, political chairwoman of the Maryland Chapter of the Sierra Club, said she paid Carbonfund $30 about a month ago in part to make up for airline flights to visit her mother and daughter. “I have mixed feelings about carbon offsets, because they tend to make people complacent about the energy they are using,” Johnson said. “So I also try to save as much as I can. But with our modern life, there is only so much you can conserve, without going back and living in the woods.”
What are “carbon offsets?”
They are donations that people and businesses make to organizations that promise to use the money to plant trees, fund wind farms, erect solar panels and help create alternative energy.
Why do supporters of them think they will slow global warming?
Trees planted through these donations absorb carbon dioxide as they grow, and this could reduce the greenhouse gases that are blamed for warming the Earth’s atmosphere. Wind farms generate electricity without the carbon dioxide generated from fossil fuel-fired power plants.
Why do critics think they’re questionable?
Skeptics say “carbon offsets,” are meaningless if they can’t be verified, and can serve as an excuse for donors not to reduce their own energy consumption and pollution.
Who sells them?
At least 15 different groups, including the Maryland-based Carbonfund, TerraPass of California and CarbonNeutral of England.
What should consumers do?
Buyers should beware and perhaps read this Tufts University guide to carbon offsets at: http://www.tufts.edu/tie/tci/carbonoffsets/TCI-offset-handout.htm
Related Resources:
Baltimore Sun
Washington Post
Tufts University Guide to Carbon Offsets