Ballpark Estimate: $5.50 to $29 per ton of CO2
Protecting the environment has become big business in the 21st century. Everywhere you look, there are eco-friendly products and services that promise to save the planet and make you feel good about being part of the global effort. Carbon offset providers are a small but rapidly growing worldwide industry. Today, there are dozens of companies in the United States, many partnered with bigger businesses and corporations, that will help you calculate your carbon footprint, determine an appropriate carbon offset, and allow you to spend your money to benefit the environment and buy some peace of mind. But, as always, there are plusses, minuses, and questions concerning these companies and the products and services they sell.
What Are Greenhouse Gases (GHGs)?
Greenhouse gases, both natural and manmade, trap heat within our atmosphere and are causing the earth’s surface temperature to rise. There are six gases that primarily contribute to global warming: carbon dioxide (CO2), methane (CH4), nitrous oxide (NO2), perfluorocarbons (PFCs), hydrofluorocarbons (HFCs), and sulfur hexafluoride (SF6).
What’s Wrong With Carbon Dioxide?
We’re producing too much of it. Humans, plants, animals, and other organisms naturally produce CO2, and plants absorb it as part of the process of photosynthesis. But when we talk about air pollution, we’re talking partly about carbon dioxide. Vast amounts of carbon dioxide (and other GHGs) are produced by industrial processes, burning fossil fuels, and deforestation.
What’s the Story on Methane?
Methane has a global warming potential 21 times higher than carbon dioxide. Humans are responsible for about 60% of global methane emissions due to fossil fuel production, waste management (both human and farm animals), landfills, rice cultivation, biomass burning, and more. Methane is also emitted naturally from wetlands, permafrost, freshwater and saltwater, soils, wildfires, and other sources.
Why Are Rainforests So Important?
Tropical rainforests help cool the planet by absorbing vast amounts of carbon dioxide and producing clouds that reflect sunlight and heat away from the earth. Experts say that between 25 and 30% of the world’s GHG emissions are the result of deforestation. The World Bank reports that 85% of Indonesia’s 3,014 million tons of CO2e emissions are caused by fires and deforestation, making it the third worst offender in the world for GHG emissions (behind China and the United States).
What Is a Carbon Footprint?
A carbon footprint is an estimate of greenhouse gas emissions associated with a particular activity, Cost To Buy Carbon Offsetsservice, or product. When all GHGs are considered, the footprint is expressed in “CO2 equivalent” units, or CO2e units. According to the U.S. Department of Energy, each American resident is responsible for 23 tons of CO2e emissions every year “throughout the economy.” That means that each year, everything we do: work, play, drive, heat or cool our homes, vacation, shop, cook, watch TV, go to school, hang out at the mall and, of course, breathe produces 23 tons of carbon dioxide (and other GHGs) per person. Online calculators will estimate your carbon footprint for specific activities such as driving, airplane flights, home activities, or special events. Ideally, you can neutralize your carbon footprint through the purchase of carbon offsets.
What Are Carbon Offsets?
A carbon offset is a way to reduce greenhouse gas emissions in one location thereby offsetting (or neutralizing) GHG emissions that are occurring somewhere else. For instance, you might use an online calculator to figure out how much carbon is released into the atmosphere from your daily commute to work over the course of a year. You can then pay toward an environmentally beneficial project which reduces carbon emissions elsewhere in the world. The main purchasers of carbon offsets are governments and large corporations, but it is now possible for individuals and smaller businesses to neutralize their carbon footprints as well.
Most calculators allow you to estimate carbon emission figures for your car(s), airplane flights, and running your home. Some calculators also estimate offsets for events like weddings, business meetings, or the manufacture of various products.
The problem with carbon calculators and carbon offsetting in general is that there is no regulation and consistency between providers. Costs and calculations vary widely depending on the calculator and provider you’re using. For instance consider the following scenarios:
Round Trip Airfare From New York to LA
- Emissions estimate: 0.75 to 2.1 tons of CO2
- Cost to offset: $10 to $36
- Emissions estimate: 7.5 to 9 tons of CO2
- Cost to offset: $44 to $232
Running an Average U.S. Household for a Year
- Emissions estimate: 5 to 8 tons of CO2
- Cost to offset: $34 to $177
Other Offset Examples
- $127 to $667 to offset your total emissions for 1 year
- $71 to $99 to offset your SUV for 1 year
- $35 to $76 to offset your mid-size car for 1 year
- $19 to $36 to offset your fuel efficient or hybrid car for 1 year
One of the best calculators we found is at Conservation International, where you have your choice of quick, simple, or detailed calculations for home, driving, and travel, and quick calculations for road trips, weddings, family gatherings, and more. They also feature a gift option.
Don’t Shop by Price!
Until carbon offset costs are better regulated, the best way to choose your offset provider is not by price but by reliability, trustworthiness, and personality (see below for standards). If you like the environmental projects available through your provider, but your carbon offset total is beyond your budget, purchase fewer offset credits, rather than search for a less expensive and possibly less reputable provider. The old adage “You get what you pay for” may certainly apply to carbon offset companies. If a deal seems too good to be true, be skeptical. Think about it: Is your first priority to save money or to save the planet? Here’s a sampling of what’s out there:
- Conservation International – Protect tropical rainforest acreage in Indonesia, Madagascar, Philippines, Brazil, and Columbia.
- TerraPass – Capture methane at landfills in Maine or Arkansas and use it to create clean, renewable energy.
- Native Energy – Fund renewable energy projects (wind farms, solar arrays) in Iowa, California, Alaska, or Texas.
- MyClimate – Help in the construction of the first wind farm in Madagascar. Convert waste materials with low thermal value (formerly burned or left to rot in fields) into efficient fuel for the production of energy in India
- Carbonfund – Reduce tailpipe emissions generated by 18-wheelers across the U.S.
- E-Blue Horizon / The Conservation Fund – Contribute to reforestation and conservation projects in the United States
How to Choose a Carbon Offset Provider – Quality Standards
The most important feature when choosing a carbon offset provider is the quality of their carbon reduction projects. Because you are dealing in intangible, distant, and difficult-to-measure entities, complete confidence in your provider is essential.
- Additionality – Are your offset funds essential to the project’s inception or continuance, or would this project have happened anyway?
- Baseline Emission Levels – Is it possible to determine levels of GHG emissions prior to the start of the project, so real measures of success can be ascertained later?
- Wide-Ranging Benefits – Has research been done to ensure that environmental damage (emissions or other pollution) will not occur in other locations as a result of this project? Will the project benefit the environment and/or the community in other ways?
- Permanence – Are there guarantees against failure of the project? What is the timeline of the carbon offsets? Are there major barriers (financial, legal, political) that may impede the success of the project?
- Transparent Disclosure And Trust – A reputable provider will clearly and painstakingly explain every aspect of the operation so you have no doubts. They should also guarantee that your offsets are owned by you and/or retired, and will not be resold to another consumer.
- Monitoring And Verification – All projects should be monitored and verified (throughout the course of the project) by one or more independent third parties (CDM, VCS, Gold Standard, and others). In addition, the projects should be registered to provide a paper trail for further verification.
- Education – Aside from or in conjunction with the carbon offset programs they offer, one of the most important responsibilities of a provider is to educate customers and others about global warming and the need for strong and effective global warming policies in the future.
Other Things To Consider – Practicality and Personality
Once you have established the high quality and reliability of your provider’s GHG reduction projects, consider the following before making your final decision.
- Ease Of Use – “Bundling” offsets with products or services has become a great way for businesses (on both sides) to increase market share. Many airlines now offer the option to fly “carbon neutral.” Car dealerships offer options to offset the car you buy, rent, or lease, and will include the offset purchase price on your invoice. But bundling can make offsets too easy to buy. You may not take the time to research the provider carefully. If your carbon offsets sponsor a poor quality project, you’ve wasted your money.
- Timing – Be aware that some projects may be in the planning stage. Your donation may be going toward organization and start-up. Or, you may be financing a “vintage” project that has been going on for a while but needs your funds to continue functioning.
- Portfolio – Some providers specialize in one particular activity such as wind farms, methane capture, or tree planting. But a number of providers sponsor a selection of projects, and their projects change over the months and years. Some, but not all, providers allow you to choose which projects you want your offset credits to sponsor.
- Non-Profit vs. For-Profit Providers – While many of us feel good about supporting non-profits, it turns out that in the carbon offset business, there are pros and cons to both sides. There are some instances, for instance, where non-profits limit their reduction projects to reflect the organization’s mission statement, and sometimes use offsets to fund projects already in play, creating concerns about additionality. On the other hand, non-profits often have close ties to the location or people who will receive the project, and may be better able to oversee the day-to-day functioning and anticipate potential problems.
There are, of course, ways to abuse the idea and practice of carbon offsetting. One issue is that people will simply buy themselves a guilt-free lifestyle while continuing to ignore environmentally smart choices. There is also a concern that the system caters to people with disposable income and excludes a huge segment of the population who care deeply about the environment but can’t afford to participate in carbon offset programs. Finally, as more and more organizations and businesses use the “carbon neutral” label as advertising, there is concern that this will actually become meaningless, representative only of money exchange rather than the modification of behavior to reduce emissions.
From a practical standpoint, there have been situations where the carbon reduction projects failed to thrive or caused more harm than good. In an effort to cut costs during a tree-planting project, there was an incident where a fast-growing invasive species was planted, causing damage to native forests and the nearby human communities. In other instances, projects have caused political and social disturbances among native populations. Sometimes the projects themselves work fine, but the land they’ve been established on was intended, by local communities, for something else. There is a story of a small wind farm erected in a field in Africa where wind rarely came through. Again, thorough research on the part of consumers as well as providers will make for more successful projects all around.
Looking to the Future
In June 2008, a new trade organization, the International Carbon Reduction and Offset Alliance (ICROA) was established to create an international code of practice for the sale of carbon offsets. Members of the alliance include carbon offset providers from the United Kingdom, Australia, and the United States. Goals include:
- Providers must meet requirements established for the Clean Development Mechanism (CDM) of the Kyoto Protocol, the Voluntary
- Carbon Standard (VCS), and the CDM Gold Standard (GS)
- Set emissions targets based on scientific assessments
- Be transparent in communicating emissions reduction strategies, practices, goals, and achievements
- Adhere to strict, set quality requirements for offset projects
For more information, see the Internationial Carbon Reduction and Offset Alliance(ICROA).
Will Buying Carbon Offsets Rid the World of Greenhouse Gases?
No. Without a doubt, the most important and valuable result of carbon offsetting is to educate and motivate us to change our lifestyles. Becoming “carbon neutral” doesn’t mean simply buying offsets each time we participate in an activity that creates carbon emissions. It means changing the ways we behave and the products we use. Carbon offsetting is certainly a step in the right direction, and it’s a great way to fund important and worthy projects, but it’s useless if we continue to buy gas-guzzling cars and depend on traditional forms of energy.
Carbon offsets are fun and easy. We can accomplish the task in a few minutes of computer time, they make us feel good, and they’re a great topic for conversation. The hard part is changing our behavior, our political priorities, and the way our country functions in order to decrease greenhouse gas emissions around the world.