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Consumers buy carbon credits to allay greenhouse guilt
San Francisco Chronicle


April 16, 2007

When Cal Broomhead drove to the Grand Tetons and Yellowstone last summer on vacation, he felt pretty bad about the carbon dioxide emissions from his Volvo station wagon.

So he paid $100 to a company that then subsidized a wind energy project that generates electricity without producing greenhouses gases. Broomhead was told his contribution made up for a year of driving about 12,000 miles as well as his household's annual use of electricity and natural gas.

All about carbon offset
San Francisco Chronicle

What is a carbon offset? Carbon offsets - sometimes called carbon credits - help curtail greenhouse gases by putting a monetary value on reductions of greenhouse gases. The offsets represent emissions reduced via green projects such as new wind farms, solar installations or simply controlling fossil fuel pollution. The offset is sold through companies that act as brokers or traders. Individuals and businesses can buy the offsets to help reduce their "carbon footprint."

On the web:

Several online calculators allow you to estimate your carbon emissions:

Some companies that sell carbon credits:

Carbon Neutral Co.:


Climate Trust:



In the new vernacular, Broomhead and his family were "carbon neutral."

"It makes me feel good. It means I'm walking my talk," he said.

A new green fever is sweeping the nation, much of it fueled by worry over global warming. Broomhead and tens of thousands of others are using Internet calculators to determine their "carbon footprint" and then paying to "offset" that damage.

Still to be determined is whether carbon offsets are the new commodity that will truly help the environment - or merely salve the consciences of people who don't want to give up the luxury of big cars, jet travel, overheated homes, blazing lights and gluttonous appliances.

More than four dozen companies worldwide sell carbon offsets, the credits for cutting emissions through green energy projects. And although many seek independent experts who verify that the money is used to cut greenhouse gases, the businesses are unregulated by the government and lack even voluntary standards. That opens the door to fraud and mismanagement, critics say.

Denis Hayes, who coordinated the first Earth Day in 1970, doesn't see harm in individuals buying carbon credits. But it could be like trying to absolve sins by buying indulgences, he said.

"I find it slightly offensive that somebody who literally goes on two safaris a year, drives a Rolls-Royce, has at least three houses, and offsets his carbon emissions for $85 can brag about it," he said. "It's doing some good, but it doesn't in any way compensate for his impact on global warming."

Broomhead, 56, agrees. He has decided to purchase offsets only after taking other steps to lower emissions, such as replacing incandescent light bulbs and inefficient appliances. Broomhead, who manages the energy and climate program for San Francisco's Department of the Environment, has also put solar panels on his house.

Studies show that at the present rate, global citizens will produce 2 trillion tons of carbon dioxide over the next 50 years. At least 642 billion tons must be cut to stabilize Earth's greenhouse gas levels and escape the most extreme effects of global warming - melting ice fields, rising sea levels, widespread extinctions of species, and extreme weather like drought, heat waves and hurricanes.

Much of that responsibility falls to U.S. residents, who on average put out 21 tons a year of greenhouse gas emissions per person. By comparison, the global average is 4.5 tons per person, according to a 2006 report prepared by environmental consultant Trexler Climate and Energy Services.

In response, individuals, businesses and institutions are lining up to turn a carbon deficit into a carbon credit and win environmental grace. Even the opulent Academy Awards ceremony claimed carbon neutrality, and the Earth Day Network, which is organizing Earth Day events across the nation, is weighing ways to offset emissions from world's greenest of celebrations on and around April 22.

This is how it works:

More than 40 profit and nonprofit companies offer online calculators where people can tabulate the greenhouse gas emissions that they cause. By plugging in annual use of kilowatt hours and therms of natural gas, along with miles of car and airplane travel, they get their estimated tonnage. Some calculators take into consideration recycling and other good deeds.

The calculators take the estimated tonnage and charge $10 per ton of carbon dioxide. An individual can produce 1 ton of emission, for example, by flying 2,000 miles in an airplane or driving 1,900 miles in a midsize car.

With the money, the company buys carbon offsets from projects worldwide such as new wind farms, or conversion of cow manure to electricity-producing biogas fuels, or installation of new efficiency measures at power plants. The projects must have the effect of reducing, or offsetting, emissions by either preventing more greenhouses gases from going to the atmosphere or absorbing gases already there.

In the United States, the buying and selling of carbon offsets by individuals and businesses has created a voluntary carbon market. It's voluntary because the government has not joined the 163 countries that signed the Kyoto Protocol, an international agreement that mandates the reduction of greenhouse gases. There are also no federal regulations that require U.S. utilities and businesses to cap and reduce emissions.

It's different in Europe, where the European Parliament has required mandatory cuts, creating a true regulatory carbon market. There, businesses that cut their emissions to below legal caps have a saleable commodity. They can sell their credits to businesses that can't sufficiently reduce emissions.

Transactions in the European Union's cap-and-trade carbon market jumped from $11 billion in 2005 to $30 billion in 2007, according to figures from the World Bank and Point Carbon, an industry analyst.

Some experts predict that carbon offsets will be the world's biggest commodity market in the next 10 years.

Offsets have taken on new significance in this country with the Supreme Court's ruling two weeks ago that the U.S. Environmental Protection Agency can regulate carbon dioxide as a pollutant under the Clean Air Act. The decision opens the way for lawsuits that demand federal regulation.

Congress is considering limits on greenhouse gases, possibly by taxing companies that produce them or establishing cap-and-cut systems.

Oregon is already regulating carbon dioxide, and California is on its way to implementing new laws that require 25 percent cuts in greenhouse gases by 2020. Northeastern states are also putting caps in place.

Portland, Ore.-based Climate Trust, the nation's largest supplier of carbon offsets to regulated businesses, got started a decade ago when Oregon passed its landmark law requiring new power plants to reduce or offset carbon dioxide emissions, stimulating that state's participation in the regulatory carbon market.

Climate Trust also works in the voluntary market because it sells to individuals and businesses that just want to find ways to help reduce emissions.

Mike Burnett, executive director of Climate Trust, agrees with Broomhead and Hayes: People should take other energy-reducing steps before buying offsets, he said.

"You cut waste, invest in efficiency, select renewable choices from your utility, and then offset the rest," he said.

He believes in a carbon market and what it could do to help slow global warming.

"Offsets are a way for us to address the climate challenge at the lowest possible cost to society," Burnett said.



E-mail Jane Kay at jkay(at)
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Stories In The News
Ketchikan, Alaska