Vermont Attorney General Calls For Regulation Of “Carbon Offset” Claims

January 28, 2008 - Vermont Attorney General William H. Sorrell announced today that he and nine other state attorneys general have written to the Federal Trade Commission to ask that the FTC develop guidelines for businesses that sell carbon emission offset credits. The request came in a letter from the Offices of the Vermont and California Attorneys General on behalf of themselves and their counterparts in Arkansas, Connecticut, Delaware, Illinois, Maine, Mississippi, New Hampshire and Oklahoma.

Citing the challenge posed to human society by global warming, the letter notes that consumers and businesses are looking for ways to reduce their “carbon footprint”—the amount of carbon dioxide (the major cause of global warming) they emit into the atmosphere. One response to the crisis is the growing market in carbon offsets. Ordinary activities, such as driving cars and running power plants, produce greenhouse gases that trap heat from the sun, causing global temperatures to rise. Under a carbon offset program, consumers can buy emissions credits, which support specific environmental projects that reduce CO2 elsewhere in the environment.

The problem, according to the Attorneys General, is that the lack of common standards, along with intangible nature of carbon offsets, make it difficult for consumers to verify that they are receiving what they paid for and creates the potential for deceptive claims.

For example, while there is a consensus that carbon offsets should support projects that are “additional,” there is no agreed-upon definition of “additionality.” Some believe that the money raised from the sale of carbon offsets should underwrite only projects that would not have occurred but for the offsets. Others claim that it is sufficient for offsets to support projects that perform with lower emissions than the vast majority of competing projects. Standardizing this requirement is key to the integrity of the carbon offsets market, and to consumer confidence in it.

Some estimate that the national market in carbon offset credits will reach $4 billion within the next three or four years. Among the recommendations to the Federal Trade Commission are the following:

# Conduct research on consumers’ understanding of carbon offsets and on whether requiring certain disclosures would be sufficient to allow informed decision-making.
# Engage in public education and outreach to ensure that consumers understand the nature of carbon offsets.
# Until standards are developed to regulate carbon offsets, undertake interim enforcement efforts to prevent overly broad environmental claims, to require that more narrow claims be supported by reasonable evidence, and to ensure that offset projects do not double-sell credits.
# Consider whether “renewable energy certificates”—proof that energy was generated by a renewable source—should count as carbon offsets. These certificates may not qualify as offsets because renewable energy does not always displace traditional energy sources.

The letter from the Attorneys General is available at www.atg.state.vt.us/admin/redirect.php?ID=1416. For more information on the FTC’s review of carbon offsets, see www.ftc.gov/bcp/workshops/carbonoffsets/index.shtml.

Source: Vermont Attorney General

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •    •    •