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Do carbon offsets live up to their promise?

Consumers purchase them to relieve greenhouse-gas guilt, but there's no easy way to keep offset companies accountable.

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Compounding an offset's inscrutability is its intangibility. Unless you're willing to visit Uganda in 20 years to verify the existence of a new tree, a carbon offset is arguably invisible. "The carbon market is particularly difficult because of that issue," says Mark Trexler, president of Trexler Climate + Energy Services in Portland, Ore., the firm commissioned to author Clean Air-Cool Planet's (CA-CP) guide to carbon offsets. "You're dealing with stuff in the future in many cases that hasn't happened yet."

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CA-CP's "A Consumer's Guide to Retail Carbon Offset Providers" attempts to wrangle a semblance of order from what one industry insider calls the "Wild West." It ranks offsetting companies on factors like transparency, third-party certification, their efforts to educate consumers, and how well they prove they're not selling the same carbon offset more than once.

CA-CP's ranking effort is the first in what's likely to be a burgeoning industry effort at standardization. Two San Francisco organizations, Business for Social Responsibility and Ecosystem Marketplace, recently joined forces to write guides on the voluntary carbon market, and Ecosystem Marketplace is about to release a book on the topic. This spring, the Center for Resource Solutions in San Francisco plans to release a certification standard it hopes will be universally adopted.

Central to the CA-CP report – and to the debate on how to gauge an offset's quality – is the topic of "additionality." Additionality is determined by answering a deceptively simple question: Would a project have happened anyway? If yes, the offset cannot be said to have additionality. If no, then it qualifies as a true offset. Simple – except that no one agrees on what could have happened.

"You put a bunch of climate wonks in a room, it's the one [topic] they're going to talk about most," says Mr. Bayon. "And it's the one that has bedeviled every single climate discussion I've ever seen."

But while experts disagree on the effectiveness of the carbon market at averting global warming, nearly everyone agrees on two points. First, the fact that people are beginning to factor in the cost of their carbon footprint when doing business is good. "You're starting to put a price on the emissions of carbon," says Bayon. "That cost begins to filter into your operations. And you start saying to yourself, 'Should I throw that 10 or 20 bucks out of the window?' "

Second, the more money invested in renewable energy, the better. "That has an important effect in the aggregate," says Bogdan Vasi, assistant professor at Columbia's School of International and Public Affairs in New York City. "As more and more people make these choices, they are creating a market, and slowly it's shifting the proportion of renewable energy to fossil-fuel energy."

But ultimately the carbon-offset market is more a phase than a destination, says Jonathan Isham, professor of international environmental economics at Middlebury College in Vermont. "We really want a world where, in a generation, we don't need offsets anymore," he says. "Once we get the legislation we need, prices will reflect the social costs of carbon."

More trees not necessarily the way to a cooler earth

Everybody loves trees. They're beautiful, big, and green. Unfortunately, planting them may not be the best approach to reduce global warming, say scientists. While a tree does suck up carbon, its net cooling effect depends on latitude, according to a collaborative study from Lawrence Livermore National Laboratory in Livermore, Calif. Only trees planted at tropical latitudes have a net cooling effect. Those at temperate latitudes actually warm the planet.

And unless a forest is permanent (and who can guarantee that?), trees only temporarily sequester atmospheric carbon. When they burn or decompose, the carbon they contain is released back into the atmosphere. In tropical countries, where trees are most effective as a cooling agent, they're often up against poverty and political instability. "Does some guy wake up and say, 'Now I'm the dictator of the country. I want a golf course?' " says Michael Dorsey, a professor of environmental studies at Dartmouth College in Hanover, N.H. "There's the big issue."

Still, a tree's value shouldn't be discounted. While not the ideal carbon solution, they do increase biodiversity and decrease soil erosion. Most important, their natural appeal makes them ready-made symbols. "We do support tree-planting projects to get our employees engaged," says Erin Meezan, director of environmental affairs at Interface Inc., a textile company with an environmental bent. "It's one of the easiest things for people to understand. If you start getting into anaerobic digesters and underground injection, we lose them."