Are you getting your money's worth with carbon offsets?

With the increased prominence of global warming, several recent real estate developments have advertised themselves as "carbon neutral." Generally speaking, what this means is not that the use and occupancy of these units entail no energy consumption, but that carbon credits are purchased to offset the carbon dioxide produced during the life-span of the development. The use of carbon credits, also called carbon offsets, are not limited to real estate. Prominent companies from Dell to Delta offer the purchase of carbon offsets with the sale of their products. For example, an ad campaign featuring Volkswagen Jettas offered carbon credits to offset the first year of driving with the purchase of a new car. While the purchase of carbon offsets has been increasing, not everyone is convinced that they have the desired effect. For instance, in January of 2008, the FTC held hearings to determine whether carbon offsets are a legitimate environmental tool or a form of "green washing," meaning that they are a way of hiding the true environmental effect of a project or of a product while receiving the environmentally-friendly stamp of approval. If you or your business are considering the purchase of carbon offsets, there are several questions you can ask in order to ensure that your money is actually going toward the reduction of carbon dioxide in the atmosphere. Are the amounts of carbon offsets measurable and verifiable? Will the reduction in carbon be permanent? Numerous carbon offset programs fund the additional planting of trees. However, trees remove carbon dioxide from the atmosphere only as long as they remain alive and standing. If the trees are planted and subsequently cut down, then there is no net effect on the amount of carbon dioxide in the atmosphere. Is the activity being funded by carbon offsets additional? In other words, would these activities already occur in the absence of funding from the purchase of carbon offsets? One quick and easy test is to determine whether the activity is profitable; if it is, then it likely would have occurred anyway and you should direct your money elsewhere. Is the reduction in carbon dioxide independently verified? There are numerous agencies that do verify that carbon reduction programs are accomplishing the goals that they set for themselves. If a carbon offset program does claim that it is independently verified, you should also investigate the reputation of organization doing the verification. Ask if the carbon offsets are unique. Make sure they are not being double counted. Some organizations selling carbon emission credits have been found to double count or sell-off numerous times the actual amount of carbon that is being reduced. To date, there has been no regulation of carbon offsets and no governmental verification that the offsets are actually taking place. Due to this absence of control, some carbon offsetters are attempting to band together and establish guidelines for the future sale of carbon credits. For example, the voluntary carbon standard which was released in November of 2007, provides a framework within which the sellers of carbon credits can offer security and uniformity to their buyers. Green-e Climate offers another approach, ensuring the validity of carbon offset purchases by undertaking their own independent investigations of those selling carbon offsets. Both of these systems, however, are in their infancy and have yet-to-be widely implemented. Given the fact that Americans spent over $54 million in 2007 on carbon offsets, and that some experts believe the market for carbon offsets is likely to grow to $4 billion over the next five years, it appears that increased oversight for carbon emission credits is not far-off. But, in the meantime, if you decide to purchase carbon offsets, the only way to ensure that you are receiving value for your purchase is to do your homework. Kevin Walsh is an associate in the environmental law practice group of Certilman Balin Adler & Hyman, LLP, Hauppauge, N.Y.