Excellent advice for anyone interested in buying carbon offsets. I asked Google about it, and found this post by TerraPass about additionality. Good reading, and the explanations seemed very well-thought-out to me.

Not to mention that you can see exactly where TerraPass spends their money here. All in all, they strike me as being thoroughly transparent, diligent, and thoughtful in their approach to what they see as both a problem and an opportunity. Good for them. I’m sure that there are other carbon market players that are better, but probably even more that are much worse.

A (much more reputable) company like NativeEnergy ensures this “additionality” component. Without the offset revenues, projects like a wind farm on tribal lands or a methane digester on a family farm would not happen for lack of capital.

Go ask TerraPass exactly where your money is going when you buy offsets…and ask for a guarantee that the projects they’re allegedly bringing to fruition wouldn’t have happened anyways!

On the other two-thirds where carbon credits are purchased and retired – it is a way of knowingly offestting CO2. However, does it seem silly to anyone else we have people paying for firms to NOT produce anything? Also, the cost of running a firm or generating electricity just increased from fewer CO2 credits available on market because others want to drive big cars? Carbon trading sounds like a good plan for specific industries but when its interfered with from movie-stars and their want of a mansion and limo? It sounds completely destructive to me. If Al-Gore wants to buy C02 credits from a market for cars so someone else is paid not to drive thats fine – but to keep large unnecessary cars on the road by retarding actualy productive capacity? Am I crazy to think thats a really stupid idea?

Sale Number One in your list (selling clean energy directly to consumers) should, and apparantly does, disqualify any further sales of the carbon offsets from that electricity. Green-e.org is one of the third-party certifiers used by TerraPass and other carbon offset retailers like CarbonFund.org, and their certification standards explicitly say the following: Eligible RECs (TRCs) or renewable energy can be used once and only once; making a claim (e.g. “we’re buying wind power”) is one example of a ‘use’ that results in retirement. See http://www.green-e.org/getcert_re_stan.shtml for a summary or http://www.green-e.org/docs/Green-e_National_Standard.v1.pdf for the full shebang.

Sale Number Two in your list – government subsidies – undoubtedly happens. Contra Tom Arnold’s comment above, even though TerraPass isn’t getting any subsidies, the clean power producers that they buy their offsets from are (presumably – I haven’t checked to see if the specific vendors they buy from are actually getting government subsidies, but if you really want to check they are listed at http://www.terrapass.com/projects/tour.wind.html as Garwin McNeilus, Solano High Winds, and Ainsworth Wind). I think you could argue equally well that this is a “second sale” or that it’s just a plain old subsidy. After all, we don’t usually say that dairy farmers are selling the same gallon of milk twice just because they’re getting government price supports. But that’s really just a semantic argument; whatever you call it, the effect is clear – distortions in the markets for both power and carbon reductions, ultimately making the TerraPasses (and other such offsets) underpriced. Those subsidies should be ditched. For that matter, so should the milk price supports.

Sale Number Three in your list is just the normal sale of offsets to consumers. You compare it mockingly to for-profit venture capital, but I don’t think the scorn is justified. People routinely voluntarily contribute funds for projects they think are worthwhile without expecting any monetary return (the Bill and Melinda Gates Foundation springs to mind). In an anarcho-capitalist society, that’s exactly the way that public goods would be provisioned; that’s the model we should be supporting and promoting as opposed to taxes and bureaucratic decisionmaking.

The comparison to the International Star Registry really is offbase. The ISR doesn’t sell what they lead people to believe they do, since as you say no actual naming body accepts their names. But when you buy a TerraPass (or an offset from some other similar organization) you actually have reduced the amount of carbon emitted, which is exactly what they are selling.

By the way, this ignores the ability of such a company to resell the same credits to multiple certificate holders, since the whole CO2 credit thing is pretty damn hard to audit and no one is even trying.

“Hard to audit” appears to be correct. See http://green.itweek.co.uk/2006/10/firms_urged_to_.html for a summary of a Guardian article describing some of the issues. “No one is even trying” is flat wrong, however. A quick googling shows: “The Climate Group is currently working on an international set of voluntary standards”, The CarbonNeutral Company has developed a protocol that includes independent auditing ( http://www.carbonneutral.com/uploadedfiles/Quality%20assurance%20standards%20for%20carbon%20offset%20programmes%20with%20The%20CarbonNeutral%20Company.pdf ), Environmental Resources Trust and Green-e are both in the business of auditing, verifying, and certifying emissions reductions, and the UK is developing (or has developed?) a carbon audit regime. This is all good to see. Third-party certification by multiple competing and cooperating private certification bodies is what we anarcho-capitalists have wanted to replace the FDA and the SEC and their ilk for a long time.

Either anthropogenic global warming caused by CO2 (AGWCO2) is a problem or it isn’t.

If AGWCO2 isn’t a problem, then your criticism is best addressed at those claiming that it is a problem. TerraPass is in that case selling a product that some people like but don’t actually need and probably doesn’t work: the environmental equivalent of Doc Friendly’s Liver Tonic or some such. The Doc Friendly company doesn’t have to be watering the product down for it to be a dumb idea.

If it is a problem, then the responsible, moral thing to do as an individual is to take steps to mitigate the pollution one causes, despite the fact that the government isn’t forcing you to do so. It’s the same reason you don’t litter in a park or leave your garbage on your neighbor’s yard, even if there’s nobody there to put you in jail for doing it. Buying carbon credits allows one to make good use of division of labor in a capitalist economy by paying someone else to reduce emissions more cheaply than one could one’s self, as judged by one’s own subjective preferences.

You perceive a lot of people as wanting to buy offsets for smug, trendy, self-aggrandizing reasons. That may be a valid criticism, I don’t know. The point remains that, if AGWCO2 /is/ a problem, then the “smug jerk” crowd is doing the right thing, even if it’s for the “wrong” reason. It’s pretty analogous to giving to charity. Some people do it to make a big show, but it’s still the right thing to do. (And frankly, I’d rather people spend money on carbon credits than on subsidized hybrid cars. That way at least my market for cars is ever so slightly less distorted.)

“…(since I have been on a [role] with new business models)…”

Evolution has not prepared us for typing text into a computer. It seems that the first sample that the brain comes across of a word that sounds right is the one that ends up on the screen.

Regards, Don

TerraPass only sells once and then simply retires the credits. We are third party audited to show that we bought both the correct amount, and retired them. We publish that report on our site.

As for the other “chances”:

1) We don’t get involved in the sale of electricity, but we do make an agreement that the wind farm selling those electrons can make no claim to the “green” attributes of the electricity.

2) No government subsidies. We pay taxes, in fact.

3) We don’t finance projects

We’re very confident that you are buying real, measured acheived and additional reductions. Thats why 40,000 consumers trust us to help them take action on this issue.