Part 1 of this two-part series explores the relatively new e-commerce practice of voluntary carbon-trading among businesses. This second installment takes a look at some of the online options for consumers who wish to reduce their carbon footprint.
That the term “carbon offset provider” has become part of the business lexicon may be an indicator that companies are finally getting serious about neutralizing their impact on the environment. Consumers are finding that the Internet can be a valuable resource in their own smaller-scale efforts to follow suit.
Indeed, organizations like 3Degrees, NativeEnergy and TerraPass have developed Internet portals that support thinking, living and buying “green” — that encourage individuals to do their share to clean up the planet, even if it’s something as small as driving less or powering down the thermostat.
There are online funds for planting trees, and there are sites for purchasing eco-friendly toys and energy-miser appliances, to name just a few examples.
3Degrees aims to empower companies and consumers to use clean energy and participate in green projects.
It offers Green-e Energy Certified Renewable Energy Certificates and carbon offsets that have been verified by third-party auditors.
NativeEnergy focuses on farmer-owned, community-based renewable energy projects.
NativeEnergy’s Web site lets individuals calculate their own environmental impact and provides an inlet for getting involved in various projects.
TerraPass offers “green” gift certificates, ideas for saving energy around the house, and eco-friendly shopping for gifts specifically tailored for men, women or children.
TerraPass also is extensively involved in numerous agriculture and environmental projects, from dairy farms to landfills. The company makes carbon offsets available to individuals and businesses.
All three bring options and diverse portfolios to their clients.
Venerable Equals Trustworthy?
Consumers interested in reducing their carbon footprint should look for large companies that have been around awhile.
CantorCO2e, an emissions trading broker, has been in the carbon offset business since the 1990s.
“As far as I know, all the big guys are very reputable,” Jon Stack, a spokesperson for the company, told the E-Commerce Times. “You can trust what you’re buying. I haven’t heard of anybody getting ripped off.”
The next step for the individual is to decide where he or she wants carbon offsets to come from, Stack said.
“Maybe it’s methane capture from agriculture projects or landfills,” he suggested.
There is plenty of information on the Web.
“A lot of these online sites try to educate people,” said Stack. “There’s all kinds of people that sell different stuff with different price points. You definitely want to do your homework.”
Aside from the benefit to the environment, there are profits to be made by trading in emissions, Stack pointed out.
“That’s the whole point of the carbon market — to entice people to do the right thing by letting them make money,” he said. “If you figure out a way to sell credits and make money, hopefully your neighbor will benefit. You give them the most cost-effective tool they can get — and also allow people to make money by doing the right thing.”
Buyer Beware
However, consumers are well-advised to keep their wits about them when entering this still-unfamiliar territory.
“I don’t think consumers are yet equipped to make these investments wisely and likely will be defrauded more often than not, as a result,” Rob Enderle, principal analyst with the Enderle Group, told the E-Commerce Times. “Their better path would likely be to invest in lowering their own carbon footprint because, at least this way, they can be generally assured of the result.”
A consumer who feels badly about driving a Hummer can find some way to compensate, Enderle said.
“They likely should think about putting in solar in their home, or simply being more aggressive in turning down their heaters and using public transportation,” he said. “That’s probably a much more sure way to assure they are doing their part to leave a world for their children than sending money to an entity they can’t yet be sure of.”
Where there are potential profits, there is potential for fraud, said Charles King, principal with Pund-IT.
The best strategy is to deal in measurable commodities, he told the E-Commerce Times.
“I think the value of offsets is largely in how quantifiable they are — for example, I flew X-miles last year, so I’ll buy X-dollars worth of offsets,” King said. “That’s a much more definable and verifiable exchange than planting trees or doing volunteer work.”
A little government regulation might help, he noted.
“With a bit of luck, we’ll see this whole area get a makeover during the next few years,” said King. “The soon-to-be-past administration hasn’t been particularly friendly to market regulation, but regulation and effective policing to weed out bad seeds are exactly what an emerging market like carbon offsets need to gain legitimacy.”
The carbon-trading system is not exactly ripe for abuse, in his view, but “certainly for serious misunderstanding. It’s an area that should be approached with a stern degree of caveat emptor.”
Will It Work?
Trustworthiness aside, it’s questionable that the carbon-trading concept can achieve its ultimate goal, said Jonah Stein, principal with ItsTheROI.com.
“On the one hand, I am in favor of any system which helps address the underlying issue,” he told the E-Commerce Times. “On the other hand, unless the ‘costs’ of all environmental impacts are built into the purchase price of goods we buy, and the money collected is used for mitigation and restoration, we will not achieve any progress in fixing the environment.
“Oh yes — and as long as the population of the planet continues to grow, we are not going to restore any type of balanced ecosystem,” he remarked.
Stein once contemplated setting up a Web site to sell carbon offsets. “From the environmental point of view, the question is, do these programs actually decrease the amount of carbon released to the atmosphere, or simply assuage the guilt of the middle class and allow us to blindly continue to consume?”
The public needs to learn more about this type of tool for cleaning up the environment, said Laura DiDio, principal of Information Tech Intelligence Corp.
“It’s not something that’s on the tip of the average consumer’s or CEO’s tongue,” she told the E-Commerce Times. “It’s not the first thing you think of. Obviously, if you’ve got something where you’re in a really dirty industry, it may be getting some thought.”
However, even industries not generally regarded as “dirty” would do well to get involved in the trading of carbon offsets, noted DiDio.
“In the high-tech industry, we’re thought of nominally as a clean industry, but running these computers — they run hot,” she said. “Then, you get bigger applications, which require more power. The technology may not be dirty, but it can be a power hog and end up with more carbon emissions.”
There is room for high-tech businesses in the carbon-trading sphere, she added.
“I was at a recent supercomputing show that was devoted to this,” said DiDio. “There were a lot of sessions devoted to green IT. There’s a big business case to be made for going green. It’s a practical thing to do, more people are learning.”
The system is ripe for fraudulent activity, she acknowledged, but she believes it can be policed.
“Some of it is legitimate, but anytime you have something like this, it’s going to be ripe for abuse and fraud,” DiDio said. “You ask, ‘Who’s running this? Where does it go? And who’s certifying this? That’s another thing.”
Consumers Have Options
The North Dakota Farmers Union joined the Chicago Climate Exchange (CCX) because it has a system that works well, said Liz Mathern, program specialist for the NDFU’s carbon offset program.
It’s not available to individuals, she told the E-Commerce times, but she noted there are legitimate alternatives.
“There are Web sites you can go on and offset your trip to wherever,” said Mathern. “Their portfolios are partly made up of CCX financial instruments, which are made up of different projects. So there’s maybe not direct participation by consumers on the CCX — but they are providing a product available to consumers through, maybe, some of these other groups.
“My understanding is there are also liquidity providers who will work with individual investors who want to purchase that way,” she concluded.
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