With All That Is Going On in the World, Carbon Taxes Have Dropped from the Radar, But Beware of Legislation Pushing for Carbon Markets in 2013

How to Buy Personal Carbon Credits That Count

Originally Published on November 12, 2009

Sierra Black (Boston, Mass.) - The notion behind carbon offsets, or credits, is simple. You're living your life, and if you're living in the developed world, you're probably producing more greenhouse gases than you're consuming. While you're driving to work, or planning your wedding, someone else is working to design alternative energy technology or replanting a tropical forest. The carbon exchange market lets people and businesses invest money into those green projects based on how much carbon they're producing. People are using this system to offset the "carbon cost" of everything from weddings to international travel to political campaigns.

There is a carbon market, like the stock market, called the Chicago Climate Exchange, where carbon credits are bought and sold. Each credit represents a financial investment equal to the cost of removing one metric ton of C02 from the atmosphere. The notion of carbon marketing first got traction with the Kyoto Protocol in the late 90s, which requires large businesses and governments to cap carbon production and trade carbon credits to balance out their carbon emissions. The U.S. still does not participate in Kyoto, so for now all our carbon trading is strictly voluntary. The Chicago Climate Exchange is a legally binding system, though, in which participating companies are required to do what they say they'll do to offset climate change.

Several rock stars and politicians, our current president among them, have made their commitment to carbon neutrality the stuff of headlines. Buying carbon offsets is part of how they do it.

But carbon offsets are not just for celebrities and big business. There are dozens of companies that broker these carbon credits in small numbers for green-minded individuals and families. I recently bought a new-to-me car after a brief assay into the world of car-free living. I'm sure there are mamas out there who can cheerfully tote two car seats and two little kids four blocks down a busy street in the rain to a Zipcar lot, but I am not that woman. I am the kind of Mama who wants to put her money where her mouth is on climate change, though, so I started looking into buying carbon offsets for the driving I'll be doing.

Let me tell you, it's a jungle out there. There are dozens of companies offering "carbon credits" to individuals, and numerous, competing third-party systems to “verify” their work. There is no single accepted standard for verifying that these companies actually carry out the projects they claim to be investing in. Determining the benefit of these projects can be even trickier. To make matters worse, a project might technically meet the standards for getting greenhouse gases out of the air, but do so at a high cost to the local economy or indigenous culture.

There is a Gold Standard endorsed by the United Nations and the World Wildlife Federation. This standard takes into account not only the efficacy of the projects being funded, but also the accuracy of the carbon exchange accounting and the impact these projects have on other factors like local cultures and economies.

Like any marketplace, there are good carbon offset deals and bad ones. One company charges less than $3 for a carbon credit, while another charges over $20. What's the difference? The cost difference is not closely tied to the benefits the project grants. Remember, each carbon credit is supposed to be good for 1 ton of CO2 removal, whether it costs to $3 or $20 to get the job done.

How can you sort this out and know your carbon credits really count? Start with the United Nations excellent, free e-book on the topic, Kick the Habit. This quick read will bring you up to speed on the basics of carbon offsetting, and help you understand the emerging standards for this market. It also gives some great resources for choosing an offset company to work with.

Based on their findings and recommendations, we opted for Climate Friendly to buy our new-car carbon offsets. An Australian-based company, Climate Friendly won high marks for accuracy and efficiency. They also have one of the lowest overhead budgets, so more dollars go directly into the projects they fund. The one downside: unlike some of their competitors, they won't be sending us a cute sticker to put on our windshield. I bet stickers aren't the most sustainable thing on the planet.

The good news: after radically changing our lives to reduce our driving, we only had to pay about $50 a year to offset the driving we still do. A very worthwhile investment, in my book.

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