Attorneys General Seek Sharper Guidelines for Carbon Offsets

The 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 offset credits.

“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 energy certificates.

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

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