Fed Regulators Investigate Carbon Offsets

By Published On: January 11, 2008

Realizing that the carbon offset market is growing rapidly and is unregulated, the Federal Trade Commission launched a series of workshops to investigate the new industry January 8. “The sale of carbon offsets if marketed truthfully can provide interested consumers the opportunity to . . . reduce emissions,” said Deborah Platt Majoras, commission chair. “Our job is not to substitute our judgment for that of consumers’ or to save them from making bad choices,” she added. Offsets are available from numerous entities, including Virgin Airlines, Pacific Gas & Electric, and non-profit organizations. Consumers can pay these groups in an attempt to reduce emissions elsewhere to decrease the amount of carbon gases their activities produce–be it from using a flat screen television or driving. The money is supposed to be invested in actions that reduce global warming–from planting trees, to create a carbon sink, to cleaning up coal-fired power plants. The government’s concern is that there are a lot of offset offers available, but no concrete way to confirm that consumers’ money is actually being invested in carbon reduction measures. On top of that, there is no way to quantify just how much greenhouse gases are being reduced, even if the investments are bona fide. In addition to consumer protection, the commission also discussed the right of free speech versus truth in advertising, and whether claims regarding carbon offsets could even be regulated. The issue of secure carbon offsets is gaining much support, as evidenced by the packed all-day meeting. Industry, non-profits (such as the San Francisco-based Green-e program, which for years has been trying to verify claims of renewable energy credits), and academia staked out their positions to federal regulators. For instance, Rob Schasel, PepsiCo director of energy, said. “PepsiCo is committed to buying green energy to match 100 percent” of what it takes to manufacture the snack “Sun Chips.” The FTC is taking comments on carbon offsets.

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