How to Buy Personal Carbon Credits That Count

By Sierra Black on 12 November 2009 (Updated 6 June 2013) 21 comments
Photo: shock264

The notion behind carbon offsets, or credits, is simple. You're living your life, and if you're living in the developed world, you're probably producing more greenhouse gases than you're consuming. While you're driving to work, or planning your wedding, someone else is working to design alternative energy technology or replanting a tropical forest. The carbon exchange market lets people and businesses invest money into those green projects based on how much carbon they're producing. People are using this system to offset the "carbon cost" of everything from weddings to international travel to political campaigns. (See also: 25 Eco-Friendly Changes You Can Make Today)

There is a carbon market, like the stock market, called the Chicago Climate Exchange, where carbon credits are bought and sold. Each credit represents a financial investment equal to the cost of removing one metric ton of C02 from the atmosphere. The notion of carbon marketing first got traction with the Kyoto Protocol in the late 90s, which requires large businesses and governments to cap carbon production and trade carbon credits to balance out their carbon emissions. The U.S. still does not participate in Kyoto, so for now all our carbon trading is strictly voluntary. The Chicago Climate Exchange is a legally binding system, though, in which participating companies are required to do what they say they'll do to offset climate change.

Several rock stars and politicians, our current president among them, have made their commitment to carbon neutrality the stuff of headlines. Buying carbon offsets is part of how they do it.

But carbon offsets are not just for celebrities and big business. There are dozens of companies that broker these carbon credits in small numbers for green-minded individuals and families. I recently bought a new-to-me car after a brief assay into the world of car-free living. I'm sure there are mamas out there who can cheerfully tote two car seats and two little kids four blocks down a busy street in the rain to a Zipcar lot, but I am not that woman. I am the kind of Mama who wants to put her money where her mouth is on climate change, though, so I started looking into buying carbon offsets for the driving I'll be doing.

Let me tell you, it's a jungle out there. There are dozens of companies offering "carbon credits" to individuals, and numerous, competing third-party systems to “verify” their work. There is no single accepted standard for verifying that these companies actually carry out the projects they claim to be investing in. Determining the benefit of these projects can be even trickier. To make matters worse, a project might technically meet the standards for getting greenhouse gases out of the air, but do so at a high cost to the local economy or indigenous culture.

There is a Gold Standard endorsed by the United Nations and the World Wildlife Federation. This standard takes into account not only the efficacy of the projects being funded, but also the accuracy of the carbon exchange accounting and the impact these projects have on other factors like local cultures and economies.

Like any marketplace, there are good carbon offset deals and bad ones. One company charges less than $3 for a carbon credit, while another charges over $20. What's the difference? The cost difference is not closely tied to the benefits the project grants. Remember, each carbon credit is supposed to be good for 1 ton of CO2 removal, whether it costs to $3 or $20 to get the job done.

How can you sort this out and know your carbon credits really count? Start with the United Nations excellent, free e-book on the topic, Kick the Habit. This quick read will bring you up to speed on the basics of carbon offsetting, and help you understand the emerging standards for this market. It also gives some great resources for choosing an offset company to work with.

Based on their findings and recommendations, we opted for Climate Friendly to buy our new-car carbon offsets. An Australian-based company, Climate Friendly won high marks for accuracy and efficiency. They also have one of the lowest overhead budgets, so more dollars go directly into the projects they fund. The one downside: unlike some of their competitors, they won't be sending us a cute sticker to put on our windshield. I bet stickers aren't the most sustainable thing on the planet.

The good news: after radically changing our lives to reduce our driving, we only had to pay about $50 a year to offset the driving we still do. A very worthwhile investment, in my book.

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Guest's picture

I don't believe a word of the hype about carbon credits. It sounds like another investor swamp to me.

John DeFlumeri Jr

Guest's picture
Julie

Completely agree with you, John. But let them throw away their cash ;-). It makes much more sense to INVEST that money in a company whose values align with yours than it does to put it in a big pool where you just KNOW it's not all going where it ought.

Guest's picture
Chris

We are living in a world where up is down, left is right, and common sense is non-existent. This is such a scam and you have bought into it. Why don't you take the $50 and plant your own tree? Are you too lazy? This whole carbon market scam is playing on people's emotions and laziness. People are being duped into feeling like they have to do something to offset their emissions, but they are too lazy to do anything about it. Sounds like a great little scam to me.

Guest's picture
Guest

Its a scam to make people feel good.

And of course, gives them something to hold out over the lowly commoners.

Send me only 25 bucks and I grant you twice as many offsets!

Guest's picture
Guest

How irrelevant is this?

Guest's picture
Kaytee Cobb

Hi Sierra,

Any chance I can print a shortened version of this article in our office's monthly newsletter? I would, of course, credit you and WiseBread.

Thanks!

Guest's picture
Rosa

This is awesome, Sierra. I hope you write a followup on how you got your car useage down so low.

I don't buy straight up carbon offsets, but we added $600 to our charity budget this year for a charity called Floresta that plants foodbearing trees and teaches agroforestry. They have started advertising themselves as a carbon offset lately but it's sort of like Cheerios advertising that they are fat free - nothing changed, planting trees is what they do. They claim it's about $1/tree.

@Chris - I don't plant my own trees because I live in an established urban neighborhood (where I can bus or bike to everything I need) and we are all full up on trees. No more room.

Guest's picture
hahaha

hahahahahahahahaha...no wait, I want to stop laughing long enough to tell you this this article is just plain silly...hahahahahahahahaha...what a great afternoon laugh, thanks!

The only thing carbon credits offset is common sense!

Will Chen's picture

Hi Kaytee, I'm emailing you regarding the reprint.  Thanks!  Will

Guest's picture
Jim

I don't understand why people are declaring this as a scam. This is like any other non profit charitable giving, either you agree with the cause or you don't. If you disagree with the cause that doesn't make it a scam. If someone sees value in reducing carbon emissions then why not give money to a group that does so?

If the people declaring it a scam have any more concrete basis for that claim than cynicism then please share the details.

Is it the *best* way to do this? Who knows. It may be the most efficient. Sure I can plant a tree in my yard but what if I could pay $20 to some nonprofit that would then plant 50 trees in some 3rd world country?

Guest's picture
Tom

... as with so many things, the idea behind carbon credits is being perverted. Recently, legislation passed in the EU making regular light bulbs illegal. Now we're forced to use energy saving bulbs, which allegedly use less energy. On the face of it they do, but that doesn't factor in the production and disposal costs and the fact that these bulbs contain small amounts of mercury.

Anyway, because of these new energy saving bulbs less CO2 is - allegedly - being produced, thus less carbon credits have to be bought. The sensible thing to do now would be to remove the carbon credits from the system to reflect the lower amount of CO2 being produced. What is actually being done is that companies are buying up these "excess" credits so they can pollute more. Bottom line, the overall CO2 emissions stay the same.

Guest's picture
Guest

Re #10: Even better than "paying $20 to some nonprofit that would then plant 50 trees in some 3rd world country" is paying money to ensure acres of valuable Amazon rainforest aren't cut down in the first place. Eg, CoolEarth.org offers the only carbon offsetting scheme that has the stamp of approval from James Lovelock, creator of the Gaia hypothesis. Certainly, it offers more bang for the buck: $100 will keep 260 metric tonnes from being released in the atmosphere.

Guest's picture
Guest

I've been reading and subscribing to the RSS Feed of Wisebread for a very long time, but I will consider this the nail in the proverbial coffin for me.

Wisebread has always been about common sense solutions and "Carbon Credits" are just as big of a scam as buying swampland in Florida in the late 70's/early 80's

For those who want details that Carbon Credits are a scam

The Financial Times found that companies and individuals “rushing to go green have been spending millions on ‘carbon credit’ projects that yield few if any environmental benefits” (ft.com).

The newspaper’s environment correspondent, Fiona Harvey, wrote of “widespread failings in the new markets for greenhouse gases, suggesting some organizations are paying for emissions reductions that do not take place.” In other cases, organizations profit by selling credits for environmental projects they would have undertaken anyway.

The most simple explanation of the effects of the carbon credit scam I have ever seen is the following;

With Carbon Credits, the amount of CO2 emitted will not go down, but your costs will go up, making the only net effect economic: you will be poorer and whatever man-made effect exists on the climate will continue to exist and worsen.

Also, this is a really good article on the topic http://www.monbiot.com/archives/2006/10/19/selling-indulgences/

Carbon Credits don't count for anything, other than throwing away money and making yourself "feel good" and that's not very environmentally or financially "WISE"

After this blatantly ignorant piece by Ms. Black, I will be unsubscribing from the feed and removing Wisebread from my favorites because the next thing you know, they'll be encouraging people to purchase Time Shares and start selling Amway... Wisebread has Officially Jumped The Shark!

Guest's picture
Bill - The Carbon Credit King

I can sell carbon credits for HALF of what any of those fly by night companies can! I do not have to support a jet set, huge house living lifestyle like Al Gore.

Send me an email and I can absolve you of all of your carbon sins for one low price.

Guaranteed results! Offer ends soon, shipping and handling not included!

Guest's picture
Rosa

This is amazing, the vitriol that came out about this.

I mean, I really hate Christmas. I hate having to buy gifts for people, I hate having to travel in winter weather, I hate the whole commercial crapfest. It's a HUGE money sink.

I know lots of people who feel like me - and yet none of us are going around calling Christmas a scam or telling people they're stupid for wasting their money buying crap for people who either love them anyway or don't love them at all.

Hope y'all are invested in some greentech companies so when the cost of climate change hits you have something to pay for basics with.

Guest's picture
Usul

Actually I think I'll invest in lumber processing companies. If this carbon credit thing takes off, they will have a much bigger supply in the years to come.

Guest's picture
Jim

Actually the doubters do raise a good point. Carbon credits are not well regulated and there are many being sold that are of dubious value. So it is important to research the company or organization before hand and make sure that what you're paying for is legitimate. Above the Guest commenter cited an article from the Financial TImes. That same paper has an article citing a study that found that only 30 of 170 carbon credit programs studied had 'quality'. So there are a lot of low quality programs out there. But they did cite 30 that are quality programs. To declare it a 'scam' outright is to ignore the 30 good ones cause a bunch of bad ones exist. But there are a lot of low quality providers it seems. So if buying carbon credits then its important to make sure the projects are independently validated and that they are 'additional' (i.e. wouldn't have happened anyway), permanent, and generaly transparent.

Sierra Black's picture

This was exactly the point of my article: to help people find resources to wade through all the noise and find the small amount of signal.

You can't simply make sure they are independently validated. There are dozens of different companies that validate carbon sequestration projects, and they vary widely in their standards.

The UN Gold Standard I mentioned in the above article is, as its name suggests, felt to be the most rigorous by the environmental organizations and scientists that created the concept of carbon trading in the first place.

Even within that standard, there's wide variance. Tufts University has done excellent research on this. I used their table, which is also included in the UN e-book on the topic, as a guide in choosing a carbon offset for my recent car purchase.

They list the following as the most important questions to pose any company: 

1. Does the company invest in projects that truly reduce emissions and at the same time benefit the local population and ecosystems?
2. Are your emissions calculated correctly?
3. How is your money used?
4. Does the company work transparently?

 

 

 

Sierra Black - embracing the wild heart of parenting at www.childwild.com

Guest's picture
Guest

What is the koolaid flavor of the day? This global warming scam is destroying our country's economy. You people that buy into this are our of your minds!

Guest's picture
Huh

Here's a great idea, just accept the fact that what happens is cyclic, we are but a tiny pimple on earth's ass, insignificant, and it's time once again to wipe everything off the face of the earth and start again, and not in a 2012 kind of full of crap kind of way, that's another idiotic notion only second to this one. Well unless of course you believe the universe is only 6000 years old, then this is the first time. :)

Can you imagine how much energy it took to spread this article world wide, the power wasted on servers spewing this crap out, the energy wasted turning on millions of desktops and laptops just to read this stuff. Just imagine the colossal carbon footprint that was created to spread this post, unbelievable.

Hey, does everyone notice we don't do the ozone hole bull crap thing anymore, I guess its closing up all on its own or they just lost interest.

I would post more but I'm peddling as fast as I can and my legs are killing me :)

Guest's picture
Rosa

Huh, we don't hear about the hole in the ozone layer because the ozone layer is recovering, because most of the chemicals that were causing it to thin were banned in the Montreal Protocol - 'way back in 1987.

See, when you see a problem and you change your behavior to address it, it gets better - the reversal of ozone loss is an argument for acting against climate change, not for pretending it will just go away.