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All About Carbon Offsetting

Nov 1, 2007
2007 / November 2007

Ever since Hurricane Katrina and An Inconvenient Truth made global warming part of our everyday dialogue, it feels like rarely a day goes that we don’t hear about the urgent need to save our ailing planet.

Not surprisingly, the travel industry is often front and center of the climate-change exchange. Travel, whether for business or pleasure, is an unavoidable part life for millions of people, who take millions of trips that produce millions of tons of carbon dioxide and other climate-harming greenhouse gases. According to the United Nations, the average American produces 20 tons of carbon dioxide per year (approximately six times the world’s average) from travel, transport and everyday household activities. Air travel, in particular, is a popular poster child for eco-unfriendliness.

“Approximately 8 to 10 percent of all carbon dioxide from transportation comes from air travel — that’s a pretty big number,” said Stephen R. Connors, an energy researcher at the Massachusetts Institute of Technology Laboratory for Energy and the Environment. “We use millions of gallons of jet fuel a day. And the fact that it’s being combusted at 30,000 feet has a broader environmental impact than a Greyhound bus on an interstate.”

But a growing industry of carbon-offset companies claims to have the solution. By entering your trip details into a carbon-offset company’s online calculator, you can find out the amount of carbon dioxide your travels produce. With another click of the mouse, you can make a donation to a specific cause, such as planting trees or developing energy-efficient sources in the United States or abroad. That donation makes your travels “carbon neutral,” by negating an amount of emissions equivalent to those of your flight.

Airlines have forged partnerships with carbon-offset companies in an effort to go green. European companies led the way: Silverjet, the British all-business-class carrier, bills itself as the world’s first carbon-neutral airline. The price of a Silverjet ticket includes a mandatory donation to a project (such as subsidizing the cost of energy-efficient light bulbs in Jamaica) sponsored by the United Kingdom-based CarbonNeutral Company. SAS flyers can also offset emissions through the CarbonNeutral Company, and British Airways flyers can do the same with Climate Care, another U.K.- based offsetting company.

U.S. travel companies have followed suit. This summer, Delta Air Lines became the first U.S. airline to offer offsets with plane tickets. Customers can opt to add on $5.50 for domestic round-trip flights or $11 for international flights. The donations go to the Conservation Fund, an environmental nonprofit that plants trees in the United States and abroad.

Also this summer, Continental Airlines announced a partnership with the nonprofit Sustainable Travel International. After purchasing their tickets, travelers can use the STI calculator to determine their offsets and donate to a renewable energy or sustainable development cause.

The increased interest in carbon-offsetting has led the carbon-offset market to become even greener — in terms of cash flow. A 2007 study by New Carbon Finance and the Ecosystem Marketplace found that the U.S. “over-the-counter” voluntary carbon market (consumer-purchased offsets) was worth more than $54.9 million in 2006. And it’s growing.

“The numbers for the first six months of 2007 were as much as was traded as in all of 2006,” said Ricardo Bayon, director of the Ecosystem Marketplace. “I’d be surprised if the 2007 market didn’t double what it did in 2006. I wouldn’t be surprised if it tripled.”

But there’s a shade of gray hovering over all the green and goodwill. Though the voluntary carbon market has existed since 1989, it’s still unregulated — and currently in the “Wild West, buyer-beware” phase, according to the New Carbon Finance/Ecosystem Marketplace study. Right now, there’s no set standard that lets consumers know they’re buying quality offsets that truly make a difference.

There’s also no standard formula to determine how much carbon your travels emit. A 2006 Tufts Climate Initiative study evaluated 13 carbon-offset companies for air travel emissions, and found large discrepancies in their carbon calculators. When looking for the amount of carbon dioxide emitted during a round-trip flight from Boston to Frankfurt, the study found that results varied from 1.43 tons (from the U.S.-based company TerraPass) to 4.14 tons (from the German offset provider Atmosfair.)

Adding another layer of confusion is the fact that some offset companies are nonprofits, while others are for-profit.

Environmental groups and the scientific community also are at odds about how much good offsets do. Some believe that offsets raise awareness about global warming and climate change. They also believe that as the carbon-offset market grows, there will be more incentive for the federal government to set regulations for a carbon cap. (The United States did not ratify the Kyoto Protocol and currently has no federal regulations for carbon dioxide. However, several states, including Oregon and California, have procedures to regulate their emissions.)

“This is a multi-decade issue,” Connors said. “We’re talking about how to transform our energy-consuming infrastructure between now and the middle of the century, and you don’t just flick a switch. You make small, incremental changes and those have a big impact. Offsets are a good way to get the ball rolling.”

But there’s another camp of environmentalists who believe that offsets essentially allow people to purchase pollution absolution.

With all these murky variables, how can consumers know that their dollars will actually make a difference?

To answer those questions, consumers should consider these factors when researching offset providers.

The first is price: Depending on the company, carbon offsets can range substantially in price. Among the companies in the Tufts study, offset prices ranged from $5.50 to $27.40 per ton. However, Anja Kollmuss, head author of the study, saw no correlation between higher prices and offset quality. It’s just “very cheap” offsets — below $5 per ton — that customers should question.

Also consider the type of project. Generally, renewable energy projects, such as investing in solar panels or wind farms, and energy-efficient projects, such as distributing energy-saving appliances in developing countries, are favored because they usually have measurable, lasting results that prove their effectiveness. Forestry projects, though popular with consumers, are somewhat controversial in the offset market. The amount of carbon dioxide trees take in varies depending on their age. Plus, if the trees are neglected or destroyed, their stored carbon is released back into the environment.

The methods used to calculate emissions also are important. In general, the more factors carbon-offset calculators consider, the more precise the offset amounts will be. For example, some calculators let users designate the aircraft they’re flying on, or whether they’re in business or economy class. (Business- and first-class travelers are responsible for approximately two to six times more emissions because their larger seats prevent more people from taking the flight, thus diminishing fuel efficiency, according to Kollmuss. Larger seats and extra electronics also contribute to a disproportionate amount of the flight’s weight in comparison with an economy seat. If you’re flying first or business class, and a calculator doesn’t take that into consideration, Kollmuss suggests doubling or tripling your emissions.) With these considerations in mind, Continental plans to launch a new calculator specifically configured to its aircraft fleet. In July, Air France added a more detailed carbon-emissions calculator to its reservations Web site.

Then there’s the question of nonprofit versus for-profit offset organizations. The Tufts study found that a company’s status does not give an indication of the quality of that organization’s offsets and projects. A better measure of a carbon-offset company’s quality is approval by an independent third party, such as the Gold Standard, an initiative of the World Wildlife Fund, or the Voluntary Carbon Standard.

Finally, you need not limit donations to offset companies in your own country. Since travel — and greenhouse gases — affects the whole planet, offsets purchased from the Germany-based Atmosfair, for example, are just as effective as offsets bought from a U.S.-based provider.

Though all parties involved — airlines, offset providers, environmental groups — acknowledge that the voluntary carbon-offset market is still being shaped and improved, positive changes have already occurred.

Earlier this year, British Airways was chastised when it became known that the company only offset 3,000 tons of carbon — less than .01 percent of its emissions — after more than one year, according to the Guardian. Critics charged that project failed because the airline wanted to protect its image and not perpetuate the fact that air travel produces greenhouse gases, and that therefore its carbon-offsetting opportunities were virtually hidden on its Web site. That has since changed, and British Airways has promoted its carbon-offset program on its home page.

Other airlines and carbon-offset industry insiders have noted the incident as a lesson to be learned. “There’s no question that the more accessible you make [the carbon-offsetting information] the better,” said Brian T. Mullis, president of STI. “Continental is making it really readily apparent that offsetting is an option they want their customers to consider. As a result, I think you’re going to see much higher opt-in rates.”

There are other ways to reduce carbon emissions when you travel. The National Resource Defense Fund encourages travelers to take nonstop flights whenever possible, since take-offs and landings burn more fuel than cruising at full altitude. Kollmuss says that when possible, people should avoid air travel altogether by utilizing phone or videoconferences, and email.

But when traveling is a must, carbon offsets can help.

“It’s certainly not the solution to global climate change,” Mullis said. “But the solution to global climate change is complex, and [carbon-offsets are] one part of a greater picture.”

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