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POLICYWATCH:
Examining Carbon Offsets

07/2008

By Tristan Korthals Altes

The people involved in designing, constructing, and operating buildings all emit greenhouse gases by virtue of their jobs. While to a great extent, these emissions canít be entirely avoided, some in the sustainability industry have made efforts to neutralize their impact. Lord, Aeck & Sargent Architecture, headquartered in Atlanta, had already purchased renewable-energy credits to offset the environmental impacts of electricity used in its offices. In 2007, it also began purchasing carbon offsets for the remainder of its carbon-emitting activities, such as work-related transportation, and declared itself carbon-neutral.

Examining Carbon Offsets
Image courtesy Jim Frazier
Voluntary carbon offsets are finally getting some oversight.
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“It would be obscene not to do it,” says Jim Nicolow, who heads the firm’s sustainability initiative, summing up the logic for buying the offsets. Offsets are surprisingly inexpensive, he says, noting that going carbon-neutral is more affordable for a design firm like his than for companies that use more energy, like manufacturers. Still, Nicolow expresses reservations about offsets. “The fear is that people do this, and they think they’re done,” he says, pointing to the widely held sense that offsets should not be used as modern-day indulgences, allowing for environmental impacts without changing behavior.

Bolstering the relevance of that moral question is the practical issue of whether offsets really accomplish what they’re supposed to. The offset market is sensitive to this question and any hint of fraud, and as a result, it puts a lot of emphasis on examining offsets through the lens of “additionality.” This concept sums up the sentiment that offset purchases are supposed to create carbon reductions that wouldn’t have happened in their absence.

Despite its unwieldy name, the concept of additionality can be found in almost any type of incentive that brings about a certain behavior. When the federal government offers a tax credit for installing renewable energy systems, it’s betting that additional installations will take place as a result. When a clothing retailer offers an end-of-season sale, it’s trying to bring in additional customers.

Measuring additionality in each and every case with every purchase would be tough. But that’s the goal of the carbon-offset industry, in which the quality of its product depends on demonstrating that each and every offset sold results in additional carbon reductions. Ensuring quality in an industry with a lot of ambiguity takes oversight, and two groups have recently stepped in. The nonprofit Center for Resource Solutions, which already offered the popular Green-e program for renewable-energy credits, recently launched Green-e Climate, a certification and labeling program for carbon offsets. Green-e Climate requires a series of additionality tests, including financial, technological, and regulatory, that screen out non-additional offsets. Some observers question whether Green-e does enough, but it has started to form some industry consensus, with four companies so far offering Green-e-certified offsets.

The Federal Trade Commission (FTC) may also bring the clout of federal regulation to the field.

The FTC recently kicked off a planned revision of its regulations for environmental claims with a hearing on carbon offsets and renewable-energy credits. FTC’s process will take months, and so far it hasn’t signaled what approach it may take on protecting consumers from fraudulent claims on topics like additionality. For now, due diligence is still a prerequisite not only for offset sellers but also for buyers.

Alec Appelbaum writes about design and cities for Architectural Record, New York, Fast Company, and others. He lives in Lower Manhattan, where his neighbors are trying to get inefficient heating under control.

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This article appeared in the July 2008 print issue of GreenSource Magazine.

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