Ford Motor Company and TerraPass announce Greener Miles partnership

  • April 25, 2006
  • News
  • Comments Disabled

Mr. Fancy brand Greener Miles decalsThe news just broke over Reuters. Ford Motor Company and TerraPass have a joined in a partnership to market TerraPass-branded carbon offsets to all drivers of Ford, Lincoln, and Mercury cars and trucks.

We’re calling the joint marketing program Greener Miles. You can read the Reuters scoop here, or get the official version put out by Ford’s friendly and capable PR people (when formally announced). I’m sure dozens of other versions will appear over the next few days.

We’ll be analyzing the deal ourselves from a few different angles in the days to come. For today, though, we’ll just some provide some highlights and context:

  • The products we’re selling have new names and spiffy new decals, but they are otherwise unchanged. We’re still selling carbon by the ton. The same amount of carbon goes into each TerraPass, and the price remains the same.
  • We’ve selected two wonderful renewable energy projects to be the first beneficiaries of the offsets sold under the Greener Miles program. The first is the Ainsworth Wind Facility in Ainsworth, Nebraska. The second is the Haubenschild dairy farm, near Princeton, Minnesota. (If you’re ever having a bad day, you should check out this slide presentation about the Haubenschild farm. It will cheer you up.)
  • Ford derives no revenue from the sale of TerraPasses through the Greener Miles program. Ford is funding the program as part of their broader initiative on climate change.
  • TerraPass receives both some money and some in-kind promotion from Ford to promote the Greener Miles program to Ford customers.
  • The deal is exclusive for a short period. Then TerraPass is welcome to make similar arrangements with other automakers.

We’re pretty sure this deal is the first of its kind, which means we’re facing a lot of unknowns. No one at Ford or TerraPass really knows how people will react to the news, although we’re pretty sure that some will be enthusiastic, some will be critical, and many will just be confused.

For us, this day marks the culmination of a year of negotiation, months of effort designing the program, and many sleepless nights. It also comes hot on the heels of our biggest sales week ever, pushed along by the triple whammy of Earth Day, Yahoo!, and a front-page article in the New York Times. So you’ll excuse us if we retreat to the hotel bar for a little while and just stare at our hands.

Obviously we’re very excited about this opportunity to bring carbon offsets to a much larger audience, and we’ve got a bunch of interesting marketing programs in the works to help us get the word out. As I mentioned, we’ll also be using this space to provide our own thoughts on what the deal means for Ford, for TerraPass, for consumers, and for the environment.

Finally, a few word of thanks. First, thanks to the Ford team for also putting in long hours to make the deal happen, for demonstrating patience with an overeager partner, for taking a risk on a small company, and for taking a risk on a big idea. And most of all, thanks to our 5,500 TerraPass members, who have gotten us this far.

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adam

Comments Disabled

  1. rsomers - April 26, 2006

    This is an interesting way to monetize a combination of guilt and complacency. I suggest terrapass expand their business model to include offsets for other things people feel bad about but are unwilling to change. Obvious candidates are spouse and child abuse (offset by donations to social service agencies, shelters, etc) and crimes such as murder and assault (offset by donations that increase police forces).

  2. Kevin Whilden - April 26, 2006

    Excellent news. Exactly how much of a vehicle’s lifecycle emissions will be offset?
    Also, did you try asking Ford to drop their lawsuit against California’s plans to regulate greenhouse gas emissions from vehicles? That would be also be a significant win.
    Good luck!
    Kevin Whilden

  3. Adam - April 26, 2006

    Rsomers — I think we’ve heard this tune before, but we never get tired of sticking up for carbon offsets, which we think are one important tool for addressing climate change, along with greater conservation, renewable energy, and a host of strategies.

    This has been said better elsewhere, but there is no single solution to global warming. The notion of stabilzation wedges is one of the more useful frameworks we have for breaking the problem into achievable steps. No credible expert seems to share your view that a little belt-tightening is all we need.

    From the earth’s point of view, a pound of carbon dioxide is a pound of carbon dioxide, whether it comes out of a Hummer, a hybrid, a cow, or a volcano. Along with conservation, buying a TerraPass is one tangible thing people can do to lower carbon dioxide emissions today.

  4. Adam - April 26, 2006

    Good question, Kevin. One of the things we plan to discuss here soon is Ford’s environmental record — what we like, and what we’d do differently. Suffice to say, we’re not fans of the lawsuit. (And also suffice to say, Ford isn’t exactly soliciting our opinion on this topic.)

  5. Sparks - April 26, 2006

    Comment 1 is rediculous. This isn’t spousal abuse. What would you do, end all fossil fuel use today? Right. That kind of disruption kills. Literally. The global economy wouldn’t collapse, it would practically disappear. You don’t care about that? “The economy” sound too impersonal? Think about this: its how we grow our food, distribute food, go to work, manufacture medicines, operate hospitals. The list is enless and there’s not enough alternative energy to run but a very tiny portion of it. Even if we were all happy to live in grass huts and never venture futher than we can walk, billions would die from such an abrupt end to fossil fuel use. The answer is to reduce use as best as we can, try to compensate for what we can’t reduce, and work toward a future with better reduction and better compensation. That’s what Terrapass does.

  6. rsomers - April 26, 2006

    I appreciate the fast response, Adam. To be clear, I did not advocate “a little belt-tightening”. Good attempt at a strawman argument, though.
    We do agree that investment in alternative energy sources is a crucial element. If you can drive that by selling stickers, great!

  7. Mike - April 26, 2006

    Congratulations to Ford and TerraPass! I am a Ford driver, but I am also very concerned about our nation’s dependence on fossil fuels and excessive CO2 emissions. I recently bought a TerraPass for my 2002 Ford Mustang, because I was very concerned with the traditionally low fuel economy of my car (when compared to hybrids and the like). I absolutely love my Mustang and think Fords are great American cars, but until today I had vowed that my next car would use far less fossil fuels, even if that meant purchasing a hybrid from another company like Honda. Hopefully this new agreement between TerraPass and Ford will encourage Ford to focus on improved fuel economy for all their vehicles. If so then I can, with good conscience, continue to buy my favorite car, the Ford Mustang, in the future.
    Way to go TerraPass and Ford!

  8. rsomers - April 26, 2006

    Thanks, Sparks, for comment 5 and the refresher on economics. I have a bit of training in that subject and never suggested giving up all fossil fuels and destroying the economy. Instead, I intend to continue investing in companies that develop alternative energy sources. For that I expect to generate a financial return. You, in contrast, will get a sticker. Enjoy.

  9. biff cuthbert - April 26, 2006

    While i willingly submitted myself to the slaughter, I felt that after the 45 minutes I spent on the interview Anthony D. left an awful lot of my good comments on the cutting room floor [ not to mention the photo shoot: all they got is the bumper sticker on my "Tonka" & missed the "money shot" of my beautiful Akitas]. But like any good reporter, DePalma sets up his article like a slalom run, his interviewees take a few runs and when they miss too many of the gates, he either eliminates them or he moves the gates to shape the interviewer to the goal of his article. That said, I hope the thrust of the article doesn’t encourage whiny “concerned citizens” like rsomers – frustrated with grinding their teeth & fixated on “life style changes” as the only answer, they fail to look at the incremental good of carbon offsets and other efforts to educate the public & our fearless, clueless leaders – as Arlo Guthrie said in his song, Alice’s Restaurant, pretty soon “…they may thinks it’s a movement”. My personal reason for participating in the interview was to help get TerraPass in the New York Times and to encourage my Land Rover dealer [owned by Ford as is my Volvo] to offer TerraPass. Two out two is not bad – closer to the tipping point. Thanks to Tom Arnold for being on top of correspondence, and Tony DePalma for pursuing the article.

  10. Steve - April 26, 2006

    Several days ago, I questioned in my blog whether “offsets” really “offset” greenhouse gas emissions (see “Offset My Ass” http://nylawline.typepad.com/greencounsel/2006/04/offset_my_ass.html). Offsets are certainly beneficial, should be encouraged, and may even help build a renewable energy economy, but except in certain circumstances (sequestration, planting new trees), they do not directly negate the impact of (i.e. “offset”) the C02 that is otherwise being emitted.

    From Terrapass’s point of view, this announcement is very positive. But for the rest of us? Ford isn’t even buying the offsets themselves, they’re just marketing offsets to their customers.

    So Ford is helping to burn the world with its core products and they’re marketing offsets??? Can Ford say “hybrid”? Can they say “Fuel Efficiency”? Can Ford say (let’s go on a limb here, I know you guys at Ford are smart) “80 MPG”?

    Perhaps Ford could advertise a way to “Greenwash Your Mustang”?

  11. rsomers - April 26, 2006

    Thanks Biff. Now that I’ve dropped acid and listened to Arlo Guthrie, I see your point. Oh wait – that was 25 years ago, I don’t grind my teeth and I never said a word about “life style changes.”
    Ad hominem, strawman and argumentum ad ignorantium…I guess they don’t teach debate classes in organic clam school. Now that you’re a media star you may want to brush up on some of that stuff.

  12. Adam - April 26, 2006

    Steve — some of your points are legitimate, and some we don’t see eye to eye on. The fuel efficiency of Ford’s fleet obviously could be better, and we happen to think that improving their vehicles’ efficiency would make both good environmental and good business sense. In our opinion, the world is moving toward more efficient vehicles, and the company would do well to get ahead of this trend. So on this point, we agree.
    On the other hand, Ford has made some strides that we think are worth acknowledging. They are the first US automaker to come out with a hybrid (and still the only US automaker offering a full hybrid). It’s also the first company in the world to offer a hybrid SUV, which is actually pretty important, because there’s a much greater environmental benefit from moving someone out of a non-hybrid gas guzzler than out of a non-hybrid Corolla. Obviously Ford still has a long way to go, but they are moving in the right direction.
    Finally, I think I see what you’re saying regarding the different types of offsets — you’re drawing a distinction between sequestration offsets and other types — but this distinction is definitely out of step with current thinking on the matter. Energy demand is rising so rapidly that any action that reduces demand creates real reductions in emissions. Also, your specific example of sequestration through trees is considered problematic for a number of reasons, which is why TerraPass will never purchase these types of offsets.
    Anyway, thanks for your thoughts on the matter. Offsets are a complicated topic, and we hope to dive more deeply into the science of them in upcoming posts.

  13. Adam - April 26, 2006

    rsomers — you seem keen on the topic of rhetorical fallacies, so surely you won’t mind my pointing out that your original comment was an obvious appeal to ridicule, and a fairly tasteless one at that. Are we to surmise that you see some sort of equivalence between driving a car and beating a child?
    So if your comments aren’t well-received by others, I think you might consider that people are reacting to your tone. This blog is not a formal debate, it’s a conversation. Please speak in the same manner that you would when addressing someone face-to-face. Thank you.

  14. rsomers - April 26, 2006

    Well said and well reasoned, Adam! Best of luck with your venture.

  15. Steve - April 26, 2006

    Adam,

    Thanks. I don’t dispute that Ford is taking some positive steps. However, more fuel efficiency (as well as reducing Ford’s footprint in materials, construction and waste stream) would be even better. Cars are what Ford makes; and Ford (and the rest of us humans) need to make them cleaner and more efficient — and soon. To the extent that marketing “offsets” provides cover for us not to do the hard work sooner – that’s a negative, and potentially a large one.

    The point I’m making about the different type of offsets is this: If I emit X tons of CO2 and I want to be carbon neutral, I need to do something directly to take that CO2 out of the atmosphere to be a true offset. To pay a subsidy to wind power, for example, is good; but the wind power is largely carbon neutral (ignoring C02 emissions in production) and it doesn’t negate my carbon emissions. In order to negate them — to truly “offset” them — I would need to do something that is actually carbon negative, not just carbon neutral.
    Please tell me how I’m wrong here. On the Terrapass website it says “TerraPass funds clean energy projects that reduce industrial carbon dioxide emissions.” http://www.terrapass.com/howworks.html . Clean energy projects can only reduce CO2 emissions if they replace carbon-emitting energy production. If we all increase our energy demand and some of that demand is met by clean energy, we haven’t reduced emissions. Creating less emissions than we otherwise would have used by using fossil fuels is not less emissions — unless you believe that I earn $15 every time I forego buying a new CD that I want to buy.
    You say that “Energy demand is rising so rapidly that any action that reduces demand creates real reductions in emissions.” I agree. But projects that encourage inefficient use while at the same time support renewable energy, don’t do that. This is one reason why I think the Ford project is problematic.

    On the other hand, if the project leads to more renewable energy, and convinces Ford that being green has so many benefits that they become a world leader in creating a clean, renewable and sustainable future, it will be a huge success. I hope it is.

  16. veektor - April 26, 2006

    Ford should be congratulated for doing this, although people can unload on Ford for not being perfect. I think it’s a great right step. As the happy owner of a Ford hybrid (although not employed directly or indirectly by Ford), I welcome any step by such a company to help Terrapass.

  17. biff cuthbert - April 27, 2006

    I am sorry my comments caused an ugly flashback to a bad trip for some: the response reminds me of that moment when the first tree frog, “peeper” emerges in early spring just before the last sub-zero, killer cold snap – so loud at first, and then, nothing. My informal, conversational response was not intended for any one person, but to take a gentle poke at those who see only the negative, embedding themselves in the fabric of otherwise constructive, civil discussion. This is the first internet exchange for me, but I can see how blogs, with their seemingly casual format open us up to be targets.
    But this just gets off topic: isn’t there some virtual back alley where those looking for a fight rather than a discussion can go duke it out?
    The response to the New York Times article is overwhelmingly positive. And as has been pointed, out new participants buying carbon offsets will look for other ways to reduce their carbon footprint.
    Which brings me back to the Peepers – after the final cold snap, the survivors all come out in a deafening chorus of approval & hope for spring.

  18. Adam - April 27, 2006

    Hi Steve,
    We very much agree with your comments regarding the importance of developing more efficient cars and of not using offsets as a cover for avoiding real change. The good news is that Ford is actually a pretty good exemplar of the right way to do things. Over the past 5 years, they have reduced their own carbon emissions from manufacturing by 15%, or about 1.5 million metric tons. This is simply a huge number, and it’s significant that Ford even measures and tracks this number. Most companies don’t.
    On top of this conservation, Ford has taken the next step and used carbon offsets to bring its total carbon footprint from the manufacture of its hybrid vehicles all the way down to zero. This is the patter we like to see: conservation to reduce waste, followed by offsets to balance the rest.
    Again, this is not to suggest that Ford is perfect, or even close to it. But these kinds of steps convinced us that Ford is sincere and is a partner that we could work with.
    Regarding your question about the nature of offsets, there’s a bit of ugly industry jargon that gets to the heart of the issue you’re raising. It’s called “additionality,” and it refers to the notion that for an offset to really be a true offset, the carbon reductions have to be “additional” to what would have happened if the offset had never been purchased.
    It’s a complicated topic, but it’s an important one. For now, I can point you to some other resources online, but I promise a fuller post on this issue coming soon.
    http://www.climateneutral.com/pages/additionality.html
    http://www2.vrom.nl/pagina.html?id=9629
    And here’s a link that talks about additionality specifically in the context of wind. The crux of it is that wind energy isn’t quite cost-competitive with coal, but a subsidy from your TerraPass is used to make up the difference. The wind energy then displaces coal energy from the grid, resulting in real CO2 reductions.
    http://www.climatetrust.org/offset_wind.php
    OK, back to the conference booth!

  19. rsomers - April 27, 2006

    Thanks Biff! I’m reminded of that moment when the first organic clam, “gurgler”, emerges in the late spring with a couple of great marketing ideas for TerraPass:
    1)Some customers may want a way to display their offset when they’re not driving. (Think of Dr. Ullrich who, like me, bicycles to work). For them, I suggest a lapel pin – you could call it a “TerraPin”.
    2) As long as we’re discussing Arlo Guthrie, he could update “The Motorcycle Song” to include the lyric “I don’t want a pickle…I just want an offset for my motorsickle.”

  20. Steve - April 27, 2006

    Thank you Adam, that’s very helpful. I still have serious concerns about Ford and there still seem to be some gaps in the offset system, but hopefully they are more in the description than in the actual mechanics. It’s crucial that green mechanisms deliver as promised. I look forward to hearing more details.

  21. riotofreasons - May 1, 2006

    [Ed. note -- I just rescued this comment from the spam filter, about two and a half weeks after it was posted. Sorry for the mix up. The IP address of the poster was incorrectly flagged by our spam killer.]
    I am a terrapass subscriber and I feel this is good news. Although, Ford needs to go a lot further.
    I was wondering if this same model could be applied to air travel. One simple click on the airline website or any travel website(like travelocity) and folks get to buy carbon credits to offset their flight emissions.
    William McDonough & Partners recently announced that they would try and offset their 1 million annual airline miles by purchasing credits from Conservation Funds -Go Zero- program
    http://www.mcdonoughpartners.com/newsletter/0604/0604.html
    http://www.conservationfund.org/?article=3128
    The airline industry needs to bear part of the burden. Not just the consumers.

  22. TheAutoProphet - May 4, 2006

    Adam,
    Shouldn’t TerraPass offer an offset product that offsets the energy used to manufacture a vehicle? It is a tricky study, you would need to figure out how much energy was used mining ore, making steel, welding steel, etc., but I bet some academics have done this.
    “TheAutoProphet”

  23. llg - May 11, 2006

    Prophet, that would be a GREAT idea! Why don’t you approach Scientific American to come up with some money for this fascinating research project and then have an exclusive right to publish it??
    llg
    P.S. Sorry SA, I don’t mean to suggest how you spend your money but do it, it’ll knock the sox off readers everywhere as well as raise awareness for those who matter.

  24. Adam - May 12, 2006

    Hi guys –

    Sorry, should have responded sooner. This research has been done already. The rough number I have in my head is that 10% of the carbon content of a car is from manufacturing, 90% is from fuel consumption while driving. Obviously this figure is highly dependent on how a car is driven, but on average is roughly correct.

    Incidentally, Ford is bundling manufacturing offsets with all of its hybrid vehicles. They’ve done the math on carbon consumption for producing the 2007 Escape Hybrid and 2007 Mariner Hybrid, and they’re offsetting the emissions through wind energy purchases. They’re not very good at publicizing these efforts, but I found a brief mention of it here.

    (This manufacturing offset program, by the way, has nothing to do with TerraPass.)

  25. eco-bob - May 21, 2006

    I notice on http://www.multinationalmonitor.org that the Ford Motor Company made the “10 Worst Corporations of 2005″, aren’t you concerned Ford’s environmental record and your joint marketing effort may be labeled as a “greenwashing” or an obvious attempt to nullify Ford’s deteriorating reputation with environmentalists. It’s also been reported that Ford is heavily lobbying against tougher fuel standards.

  26. Adam - May 22, 2006

    Of course we’re concerned about this. We went into this partnership with our eyes open about Ford’s past environmental record (both the positive and the negative) and about the public perceptions of Ford. The incident with CEI has underscored the risks.
    In the end, three factors primarily convinced us to go ahead with the partnership.

    1. The partnership is part of a broader carbon strategy within Ford that we think is a good one. In other words, it really isn’t just greenwashing. Ford has thought a lot about climate change, and they’ve taken a lot of positive steps. Obviously, they still have a long way to go, particularly in the efficiency of their fleet.
    2. We see a lot of potential for good to come out of the partnership. Ford sells 7 million cars a year. The potential for consumer education is huge.
    3. Ford understands that we will continue to speak frankly about our disagreements with them, and they’re OK with that.

    Speaking of disagreements: it isn’t just being reported that Ford is lobbying against tougher fuel standards. It’s well known that Ford has joined in a lawsuit with all the other major automakers to prevent California from passing tougher fuel standards. We wish they’d drop the lawsuit.
    All I can say is that we continue feel that the potential benefits make the partnership worthwhile, and we manage the risks on a day-to-day basis.

  27. rich d - January 14, 2007

    I own seversl Ford 550 Diesel Buses 2005,2006 are there aby retrofits for bio diesel?