Attorneys General Seek Sharper Guidelines for Carbon Offsets
Federal Trade Commission's recent deadline for comments on the
marketing of carbon offsets and renewable energy certificates has
brought comments from California Attorney General Edmund G. Brown Jr.
Citing the potential "to manipulate the system," Brown recommended that
FTC sharpen its guidelines for businesses that sell carbon emission
“As more Americans try to offset their carbon emissions, the danger
grows that some individuals will attempt to manipulate the system.
Consumers must feel confident that they actually get what they pay
for—real carbon reduction offsets," Brown said.
Under a carbon offset program, consumers can purchase emissions
credits—which reflect specific environmental projects that reduce
carbon dioxide and other greenhouse gases elsewhere in the environment.
The national market for carbon offset credits is expected to reach
$100 million annually within the next four years. Currently, the market
for these offsets is volatile, largely unregulated, and has serious
potential for fraud.
Recently, the Federal Trade Commission requested comments, by
January 25, 2008, on the marketing of carbon offsets and renewable
In a letter sent to FTC, Brown and several other state attorneys
general outlined potential problems. Other states joining the letter
include: Vermont, Arkansas, Delaware, Maine, Mississippi, Oklahoma,
Illinois, Connecticut and New Hampshire.
Among their recommendations are the following:
• Conduct research on consumers’ understanding of carbon offsets,
• Ensure that offset projects do not double-sell credits or claim credits for practices that are already required by law,
• Engage in aggressive education and outreach to ensure that consumers
understand the nature of carbon offsets and the potential for fraud.
The states also called for a clearer definition of what qualifies as
a carbon offset. The U.S. Environmental Protection Agency asserts that
offset credits can be backed by projects that will go forward
regardless of whether emissions credits are sold. An alternative offset
definition would only allow the sale of credits from projects that
would not otherwise have gone forward.
For more information on FTC's review of carbon offset markets, visit http://www.ftc.gov/bcp/workshops/carbonoffsets/index.shtml.