Quotes of the Day
On a cold hillside at the edge of western Wales' Cambrian Mountains, more than a thousand saplings, all planted in the last couple of months, are taking root. The trees are local — beech, ash, oak, alder and willow, among others — but the money behind them isn't. Green-minded airline passengers from as far away as the U.S. and New Zealand are stumping up $20 per plant, hoping the trees will absorb from the atmosphere an amount of carbon dioxide (CO2) equivalent to their share spewed out during a flight. To Ru Hartwell, project director of Treeflights.com, which offers the service, it's a "self-imposed green tax — something altruistic for the planet."
Treeflights.com is just one beneficiary of a growing environmental subindustry known as "carbon offsetting." Typically, one of this new breed of companies first calculates the amount of greenhouse gases an individual or business generates by flying, driving or heating and lighting a home or office. Customers then voluntarily pay that firm to invest in projects that will cut carbon emissions by an equal amount. (Energy-hungry Americans generate about 20 tons of CO2 per capita per year; Britons, about half that). So for anything between $4 and $40 to offset the equivalent of one ton of CO2, a consumer in, say, Germany might help schools and hospitals in Eritrea switch from fossil-fuel electricity generation to solar panels. The simplicity of the idea is appealing. Consumers and businesses worldwide voluntarily offset an equivalent of 6 million tons of CO2 in 2005, forking out $43 million in the process, seven times the amount spent the previous year. (Even British Prime Minister Tony Blair is ponying up, after coming under pressure to offset his family's New Year travel.) By 2010, that figure could soar to 400 million tons worth up to $5 billion, according to consultancy ICF International.
But is what's good for the carbon offsetting business good for the environment? That's open to debate. Voluntary carbon offsetting is an unlicensed industry, and without a common regulator to police the projects and companies pledging to shrink emissions, offset providers have come up with a raft of competing rules and practices, not all of them with the credibility customers expect.
Take tree planting. Although experts agree that trees do suck up CO2 from the atmosphere, there's still no consensus on just how much a forest can absorb in its lifetime. Scientists estimate that, depending on the soil and climate, a hectare of 1,000 trees can process between five and 10 tons of CO2 each year. But the longer the time span, the harder the absorption is to predict. Some companies, such as London's Carbon Clear, say they invest not just in planting trees, but also in ensuring they thrive. But others may not be so diligent and disease, fire and logging can all shorten a tree's life. "You can never be sure the atmosphere sees the benefit," says Dietrich Brockhagen, managing director of atmosfair, a Berlin-based offset provider that avoids reforestation schemes.
For businesses keen to brandish their green credentials, this uncertainty is troublesome. In October, Britain's Advertising Standards Authority upheld a complaint against Scottish and Southern Energy (SSE) after it was unable to prove its claim to absorb through tree planting the 140,000 tons of CO2 produced each year by customers. An SSE spokesman admits that scientific uncertainty made it impossible to verify that the 150,000 trees it had planted in the U.K., Brazil and Guatemala covered its assertion.
While some firms, like PC maker Dell, are still willing to sponsor major reforestation initiatives, others aren't taking chances. HSBC steered clear of trees when it successfully offset 170,000 tons of its emissions for the last quarter of 2005 through investments in renewable energy projects. "However many trees we planted around the world, we could not keep up [with global CO2 output]", says Francis Sullivan, the bank's environment adviser. HSBC looks, he says, for more efficient uses of its money, such as its investment in a wind farm in New Zealand. Tree planting, Sullivan says, "is a distraction." Many green groups agree. In a recent report, Friends of the Earth, Greenpeace and WWF advised consumers to shun reforestation in favor of projects that "support the transition to non-fossil-fuel-based energy."
But even that is easier said than done. How can ordinary consumers be sure that their contributions toward, say, building solar greenhouses in the Himalayas is money well spent? Without global or even national regulators becoming involved, standards in the offset industry have become a free-for-all. It seems obvious, for example, that a project should reduce emissions below the level that would have occurred without that project, a condition known as "additionality." But that's not always the case. Thanks to hazy interpretations of that proviso, "at least half" of current projects wouldn't meet a uniformly strict assessment, says Michael Schlup, director of the Gold Standard Foundation in Basel, Switzerland, an organization dedicated to eradicating just such inconsistencies. His group unveiled what's designed to be a rigorous, industry-wide protocol in May, and says that around 20 projects are currently applying the code. A rival benchmark Voluntary Carbon Standard is expected to be drawn up soon by the International Emissions Trading Association and the U.K.'s Climate Group.
A finite number of major global standards would be good news for consumers, even if they've been a little slow in coming. Big corporations and governments already benefit from a common system of approving offset projects under the auspices of the United Nations Framework Convention on Climate Change. With a common set of rules, voluntary offsetting could see its ranks of followers — and the market's credibility — grow further. That's fine, say many environmental advocates, but they also say customers should be focusing more on cutting emissions in the first place. "Offsets can be seen as an easy way out for governments, businesses and individuals to continue polluting without making changes to their behavior," say Friends of the Earth, Greenpeace and WWF in their recent report on offsetting. So if offsetting does have a role to play in preventing mankind from cooking the planet, at best it's a supporting one. Up in the hills of Llanybydder, Hartwell says he makes it clear to his customers that offsetting is only a small part of the fight, and that such frankness costs Treeflights.com "a lot of custom." But he says that's O.K. — he's still got plenty of trees to plant.
- ADAM SMITH | LLANYBYDDER
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