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Wednesday, November 25, 2009

Can You Really Offset Energy Use?

After Al Gore won the Academy Award for his 2007 film about the dangers of global warming, he faced an inconvenient truth of his own. Critics pointed out that his big house in Tennessee was using 20 times as much electricity and natural gas as the average house. Gore's response that he had bought so-called carbon offsets to balance his energy splurge focused attention on this notion of atoning for your energy sins.

The idea of offsets is that since you cause global-warming greenhouse gases whenever you drive, fly, or use electricity, you can help balance this by supporting projects that reduce or avoid greenhouse gases elsewhere. Do such substitutions really work? And if you and your family are concerned about the dangers of climate change, should you buy such offsets if you can afford them?

It may be worth considering. The average American household is responsible for putting about 20 tons of carbon dioxide (CO2)—the principal greenhouse gas—into the atmosphere every year vs. about 4.5 tons for families in all countries of the world.

How offsets work

Companies and nonprofit organizations that sell carbon offsets invest part of the proceeds in farms of windmills to generate electricity, thus avoiding new generation by carbon-heavy sources like coal-fired power plants.

The other major investment through offsets is in equipment to keep methane—an even more damaging greenhouse gas than CO2—from being released into the atmosphere from landfills and dairy farms or other livestock operations. Some of these projects also convert landfill methane into electricity. Because climate change is a global problem, reducing greenhouse gases at a Maine landfill, say, is a valid offset to your energy use in another part of the country. As investments in other areas such as solar energy become feasible, offset providers may expand their portfolios.

Skeptics point out that such small-scale projects are hardly sufficient to cope with the danger of global warming. Climate scientists project that the world needs to cut its greenhouse gas emissions by 80% by 2050 to have a chance of avoiding potentially disastrous climate change. And fast-growing economies such as in China, where CO2 emissions have been growing four times as fast as in the U.S., add to the problem. Still, Adam Stern, vice president for policy and strategy of offset company TerraPass in San Francisco, responds that the investments from offsets help fund new technology and projects that might not find financing otherwise. "This support goes to projects that advance alternative energy along with reducing current greenhouse gas emissions," says Stern.

So, if you're concerned about your contribution to global warming, what can you do?

First, cut your energy use ...

Proponents and critics of carbon offsets alike agree that the most important thing you can do for the atmosphere is to reduce your "carbon footprint"—the amount of greenhouse gases your activities produce. Energy economist Charles Komanoff in New York calculates that a typical household can reduce its carbon footprint by about 25%. He suggests you:

• Replace traditional light bulbs with energy-saving compact fluorescent bulbs and buy energy-efficient appliances if you need new ones.
• Car pool or use mass transit, if available, to avoid driving to work by yourself every day.
• Cut back on driving for errands and shopping; plan so you make one trip instead of three.
• Improve insulation, seal air leaks, and take other energy-efficiency measures to cut heating and cooling costs in your house.

"If you take these steps, you save money on gasoline and utility costs instead of spending money on offsets," says Komanoff—whose Carbon Tax Center advocates a national carbon tax to reduce greenhouse gas emissions.

Then consider offsets

Even if you do all those things, you still will be causing carbon emissions. You certainly will still be driving, heating and cooling your house, and, most likely, flying—for business, to visit family, or for vacation. For those activities—with substantial variations—companies and nonprofit organizations are ready to sell you specific offsets.

For instance, going to the TerraPass Web site shows me that my small SUV 2003 Ford Escape, driven a typical 12,000 miles a year, causes 11,938 pounds of CO2 emissions annually:

• TerraPass promises to offset that amount for $59.40.

• A competing company, NativeEnergy, with a less specific calculator, offers an offset for cars in the same mileage range for $72.

  • And the Carbonfund, with a specific model calculator, was lower than either at $27.88.

Variations also were wide to offset a New York to Los Angeles round-trip flight. TerraPass would charge $9.90 compared with $24 at NativeEnergy. Stern of TerraPass says the differential results from a scientific disagreement about whether to count additional effects from airplane emissions coming at a high altitude. Carbonfund lets you make the call whether to count this "radiative forcing"—$13.28 for an offset if you do but only $4.92 if you don't. Carbonfund suggests that its offsets are cheaper because it's a nonprofit organization and has lower overhead.

There are dozens of Web sites selling carbon offsets, but these three are among the best-known based in the U.S. Your local utility may be among those offering offset options. If you do consider offsets, be sure what you paid for is valid. The Federal Trade Commission is preparing to issue new advertising guidelines for offset providers. And the staff of the Tufts University Climate Initiative, which has done a study on the issue, suggests checking these issues with any company or nonprofit where you might buy offsets:

• Make sure the company lists all the wind energy and methane capture projects in which it invests and that there is a clear measurement of electricity produced or methane emissions reduced.

• Confirm that the funding from offsets was crucial to the project—that it would not have happened anyway from other investment or because of state or local regulations.

• To verify these facts, the company or nonprofit should follow a broadly accepted standard and have an independent third party certify its projects. The environmental group Natural Resources Defense Council, New York, cites the Green-e standard developed by the Center for Resource Solutions, San Francisco, as an especially good measurement. Another yardstick, developed in Europe, is known as the Voluntary Carbon Standard. All three of the Web sites mentioned here have certification following one or more of these standards.

Certainly any solution to climate change will take sweeping government action beyond what any individual can do. But if you can cut your energy use and support projects that are reducing or avoiding greenhouse gases, you can believe you are doing your part.

Jerry Edgerton is an automotive writer whose work has appeared in Money and other national magazines. He also is the author of "Car Shopping Made Easy."

Published May 19, 2008