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What’s the FTC got to do with carbon offsets?
Even a year ago, it would have been hard to imagine that the Federal Trade Commission (FTC) — the federal agency responsible for protecting consumers from misleading marketing claims — would have any reason to wade into the world of climate change and cow power. But last week I went to Washington to represent TerraPass at an FTC hearing on carbon offsets.
Media stories in 2007 expressed concern about possible risks to the public from an unregulated voluntary carbon market. Last July, a Congressional committee (before which our CEO Erik Blachford testified) asked the FTC to examine the offset industry.
All this led to a remarkable event on January 8: on a winter day in Washington when the temperature fittingly reached 72 degrees, 250 people crammed into a hearing room to talk about carbon offsets.
TerraPass was delighted to be one of only three offset retailers invited to share their opinions with the FTC in person. For carbon wonks not able to get to DC, the proceedings could be watched on a live webcast (see agenda (pdf) and video and transcripts).
The workshop consisted of presentations and panel discussions with about 25 experts from offset retailers, environmental and consumer groups, federal agencies, lawyers, and economists. Invited speakers shared their views on the carbon offset phenomenon and helped the FTC consider what guidance it might provide to consumers and industry participants.
I was impressed to see leaders from the Center for Resource Solutions and the International Emissions Trading Association discuss their recently released offset standards. The Green-e Climate Standard (pdf) and the Voluntary Carbon Standard (pdf) developed over the past two years, with extensive stakeholder involvement, showed the progress the offset industry has made in policing itself. We are heartened by these developments, but at the same time, TerraPass believes that some government oversight from the FTC and/or the Environmental Protection Agency (EPA) would bolster the credibility of the voluntary carbon market.
During my panel, I described what we do to protect our customers when they purchase offsets from TerraPass:
- Select carbon reduction projects that meet the most rigorous protocols;
- Conduct independent verification procedures;
- Fully disclose our projects on our web site and include a Product Content Label with every TerraPass;
- Submit to annual audits confirming that consumer purchases are matched by an equivalent amount of carbon reductions;
- Guarantee vintage matching: carbon reductions occur in the year customers buy them.
I encouraged other offset companies and organizations to develop comparable policies. I also welcomed the FTC’s involvement and added that we can all be stronger if this federal agency adds its imprimatur of confidence for consumers — and weeds out any bad actors that aren’t playing by the rules.
Carbon offset providers that meet the tough standards TerraPass follow are delivering an important service to individuals (closing in on 100,000 at TerraPass alone) that want to be part of solutions to global warming. Conserving energy, adopting new technologies when they become affordable, and buying high quality, independently verified carbon offsets are promising ways to reduce greenhouse gases now. As climate science presents an even more urgent picture of the risks of inaction, we need to enlarge the community of people choosing innovation over complacency.
The FTC has asked interested parties to submit written comments later this month (TerraPass will publish its comments on this blog, too). It’s good to see the FTC exploring how it can help the offset industry and protect consumers. TerraPass is also pleased to be a trusted source for best practices regarding offsets. I will keep you posted as this story unfolds.