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Is Dave Matthews' carbon offsets provider really carbon neutral?

Celebrities like Dave Matthews have used carbon offset provider NativeEnergy to help them be carbon neutral. But there's great debate about the company's method of selling offsets that have yet to happen.

By Katy Jordan/ Contributor / April 20, 2010

NativeEnergy’s carbon offset investments helped finance the Greensburg, Kan., windmill project. The offset provider caters to celebrities, including Dave Matthews. But there is debate about whether the company's method of selling carbon offsets that have yet to happen is really carbon neutral.

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South Burlington, Vt.

NativeEnergy is the celebrities' choice in offset providers. But the stars might be hard-pressed to say what they are getting.

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The Vermont for-profit carbon offset company lists among its eco-conscious customers Ben and Jerry's, the Dave Matthews Band, Jon Bon Jovi, the Democratic National Committee, and the makers of Al Gore's movie "An Inconvenient Truth." The company is a darling of many environmentalists.

But customers using NativeEnergy's online site to calculate and offset their current carbon footprint at $14 a ton are buying a promise that the environmental benefit will be delivered gradually over the next 20 years. Until then, their climate-changing emissions are not neutralized.

The company's model is unique, and controversial. NativeEnergy mostly sells offsets for projects that have yet to happen or are only in the works. What it calls a "help build" concept is not accepted by the leading independent certification organizations, which typically verify only carbon reduction emissions that actually have occurred. NativeEnergy sells its emission reductions upfront – and says they will be verified later, when they occur.

"It's unique because of the future-value question," acknowledges Bob Sheppard, head of Clean Air Cool Planet, the nonprofit that "retires" NativeEnergy's offsets to ensure they are not reused. Most offset companies sell the carbon reduction from a single year, Mr. Sheppard says. "They buy the life-cycle [of a project], estimating it will run 20 years."

Tom Boucher, a former utility official who helped found NativeEnergy, defends his company's method as an innovative way of building new projects that help the environment.

"If you are simply paying for something that is already happening, it's far less compelling," he says in an interview in NativeEnergy's office. "The power of our help-build model with our upfront payments is [that] it really becomes part of the financing. If you just look to our shortened terms and conditions, or wherever we make a claim around an amount, we always have a reference to 'it's over time.' "

NativeEnergy described itself in 2007 as "a privately held Native American energy company," and now says it is "significantly owned" by native American tribes. Tom Stoddard, a former utility company lawyer and vice president of NativeEnergy, says native ownership is 16 percent. Mr. Boucher and Mr. Stoddard are not native Americans. They say they help finance projects that benefit indigenous people.

Tom Goldtooth, executive director of the Indigenous Environmental Network, based in Minnesota, argues that carbon offsets do more harm than help for native peoples. He says indigenous people from Canada to South America are being pushed off land for incoming carbon projects, and often do not share in the economic benefits created by these offset projects.

They are "just another mechanism to relieve society of the fact that we need to make real changes," Mr. Goldtooth says. "It functions to relieve someone of their guilt."

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