News

With climate change dominating headlines and people increasingly concerned about the impact of their individual activities, more and more consumers are turning to so-called carbon offsets to assuage their enviro-guilt.

But the burgeoning offset market still looks a little like the Wild West of yesteryear, and consumers are faced by a confusing mass of offset options vying for their money.

Simply put, a carbon offset represents the equivalent of a tonne of carbon dioxide — the main greenhouse gas — being removed from the atmosphere, for example by planting trees or by preventing CO2 from escaping into the air. Carbon offsets, or credits, were initially designed to help companies and governments reduce the tally of their greenhouse gas emissions; a manufacturer could shell out money to plant trees, for example, rather than invest in smokestack scrubbers.

Now, consumers are also buying offsets — either because they want to reduce their personal "carbon footprint" or because buying certain credits can force businesses to reduce their emissions further. In the past two years, dozens of companies have sprung up to sell offsets. In theory, if you create a tonne of carbon dioxide by flying, driving, barbecuing or doing almost anything else, you can buy an offset and become "carbon neutral" — that is, not contribute to global warming.

But it's an unregulated industry. Some offset projects aren't particularly effective, or harm the people and economies where they take place. As a result, not every offset is created equal. So, what's a simple consumer to do?

Before, the only option was to plow through hundreds of pages of documents and become a carbon-offset expert yourself. But now, there's a new sheriff in town. Actually, there are a few policing agents at work, in the shape of standards agencies that certify legitimate credits. It's an important job, considering that spending on carbon offsets topped $100-million worldwide in 2006, before the real rush began.

Lee Hunter, a technical editor in Ottawa, was one consumer who recently contributed to the growth of the offset market. He bought offsets from PlanetAir, a Canadian not-for-profit company that began selling them to consumers last August. It was set up by the Unisfera International Centre, a not-for-profit sustainable development consulting company based in Montreal.

Mr. Hunter will be going to an Edmonton conference in June and knew that air travel creates a lot of greenhouse gases, so he weighed his options. "I wasn't really aware of any alternatives," he says. "Not going [to the conference] would be the most environmental thing to do, but would surely restrict my professional development options."

So he turned to carbon offsets — and found a complicated market filled with different options, each with a website making an argument in its favour. A colleague suggested PlanetAir; after reading about the company, Mr. Hunter spent about $45 to offset the 1.25 tonnes of greenhouse gases for which his plane seat would be responsible.

PlanetAir currently sells offsets for projects that, for example, replace diesel generators with wind turbines in Madagascar, or burn sewer gases to generate electricity in South Africa.

From a consumer perspective, buying an offset can feel risky. When you buy a book or a toaster, you have something physical and tangible at the end of the process. With offsets, you're effectively paying someone to not produce a certain amount of greenhouse gas.

Mr. Hunter says he was reassured when he read that PlanetAir buys credits certified by Gold Standard, based in Basel, Switzerland. It is one of the new not-for-profit groups certifying carbon offsets, and is "the strongest in the world," says Paul Lingl, a climate change campaigner with the David Suzuki Foundation.

Gold Standard was set up by an international consortium of groups, including the David Suzuki Foundation, the World Wildlife Fund, Greenpeace and the Alberta-based Pembina Institute. Its aim was to answer concerns about an unregulated market and a feeling that the Clean Development Mechanism (CDM), which certifies projects under the Kyoto Protocol, wasn't stringent enough, Mr. Lingl says.

The Kyoto Protocol allows countries to reduce their emissions in several ways. One is to start projects in developing countries that reduce the amount of greenhouse gases entering the atmosphere. CDM rules govern the projects that generate offsets which countries — and now individuals — can purchase. The CDM incorporates accounting standards, standards for monitoring and assessing projects, and a registry.

Gold Standard starts with the CDM requirements and then adds further tests for "additionality" — essentially, whether a project would have happened anyway, in the course of business as usual. Gold Standard gives preference to projects that benefit local residents. For example, one project built a 4.5-megawatt biomass plant in rural India. Instead of waste being burned in fields or left to rot, it is now burned to generate electricity, and ash from the plant is used to make organic fertilizer. The project also created 500 local jobs.

Gold Standard is just one of a growing community of standards groups that oversee and certify offsets. Another major one is the Voluntary Carbon Standard (VCS), set up by companies in the emissions trading industry and the Business Council for Sustainable Development. Others include VER+, created by the German Tuv Sud Group; and the Chicago Climate Exchange in the United States.

Each set of standards differs slightly. Gold Standard emphasizes sustainable development, while the Chicago Climate Exchange accepts a wider variety of projects, such as carbon capture and storage, which sees carbon dioxide pumped into oil wells.

"There are some standards that are more stringent than others," says Anja Kollmuss, a researcher at the Stockholm Environment Institute's U.S. centre and co-author of a recent report, Making Sense of the Voluntary Carbon Market.

Which set of standards is the best?

"It depends on what people are looking for," says Ms. Kollmuss. "There's no clear-cut answer ... There's no way to say, 'This is the best.'"

Her report favours Gold Standard and the CDM. It is somewhat critical of the Voluntary Carbon Standard, which is weaker on secondary benefits such as sustainable development but has strong forestry standards, says Ms. Kollmuss. Forestry projects are often frowned upon because trees are susceptible to fire and disease; it's also difficult to prove that the reforestation wouldn't have taken place without money provided through the offset project.

Other programs Ms. Kollmuss is watching include Plan Vivo, which has some interesting sustainable development projects. One weakness, she suggests, is that it certifies offsets based on storing CO2 through, for example, native and fruit trees planted on farms.

Even the International Organization for Standardization (ISO) and the Canadian Standards Association have joined in the offset game. They recently introduced the ISO 14064 series of standards, which focus on documentation and accounting. If you're going to sell offsets for CO2 emissions, you have to be able to show what the emissions were at the outset and measure how much they were reduced.

Although the sheriffs are moving to bring some rules to this developing market, it's still a bit of a Wild West show. And consumers still need to do their homework before using offsets to erase their carbon trail.

---

Offset standards

When buying carbon offsets, make sure they are certified and also verified through a third-party audit. Look for companies selling offsets that are registered under one of these programs:

• Clean Development Mechanism: Created for emissions trading under the Kyoto Protocol, CDM is the largest of all the standards programs. It incorporates accounting standards, those for monitoring and assessing projects, and also a registry. It was also meant to stimulate investment in developing nations and encourage countries such as Canada to provide clean technology to the developing world.
• Gold Standard: Set up by environmental groups from around the world, it is based on the CDM but with beefed-up "additionality" tests, tighter restrictions on the types of projects it certifies, and sustainable development criteria to ensure projects are actually good for people who end up living with them. Gold Standard offsets can be bought online at: www.planetair.ca; www.less.ca; www.myclimate.org; www.climatefriendly.com; www.Atmosfair.de
• Voluntary Carbon Standard: Similar to CDM and Gold Standard, but with an eye to creating a lower-cost system. Set up by companies in the emissions trading industry and the Business Council for Sustainable Development, it accepts a wider variety of programs than Gold Standard and does not have the sustainable development criteria.

---

Tips for offset buyers

• Work to reduce your own greenhouse-gas emissions. Take public transit or ride your bike to work, walk to the grocery store, turn down the air conditioning, plant a tree.
• Look for offset projects that reduce emissions, such as a plant that burns methane from a farm (methane is a much stronger greenhouse gas than carbon dioxide), rather than ones that capture or store greenhouse gases, such as tree planting projects.
• Make sure the offsets you buy are certified.
• Read the fine print.
• Ask lots of questions.

Special to The Globe and Mail

---

This article in Green Solutions incorrectly identified the David Suzuki Foundation, Pembina Institute and Greenpeace as founders of the Gold Standard on carbon offsets. In fact, they are supporters. Gold Standard was set up by the World Wildlife Fund, SouthSouthNorth and Helio International.