Why is Wal-Mart lobbying against carbon-offset guidelines?

Why is the mega-retailer so afraid of having offsets defined?

The front of a Wal-Mart Store in Clearwater, Fla.

Wal-Mart has been taking many major steps go green in recent years. The mega-retailer has taken steps to assess the carbon footprint of some of its products, and it has become the largest buyer of organic cotton and of locally grown produce. It has been pushing suppliers to reduce packaging and has even introduced biodegradable containers for some of its products. It has boosted the fuel-efficiency on its truck fleet, one of the world's largest, and has built super-energy-efficient stores. It has promoted sustainable fisheries and even tried to green its jewelry.

Most remarkably, in October 2005 the Wal-Mart's CEO, Lee Scott, announced that the company's goal is to transform itself into one that runs on 100 percent renewable energy and produces zero waste.

Now you can chalk all this up to public relations, but, as environmental writer David Roberts once pointed out, all these steps seem to go way beyond what's required for a successful greenwashing campaign. They could have just taken out a few ads in Outside and called it a day. I think Wal-Mart's execs are, in some sense, genuinely committed to the environment, even if it's just because they've discovered that being less wasteful saves money.

So you can imagine my surprise when I came across Wal-Mart's comment on the Federal Trade Commission's attempts to standardize carbon offsets.

The FTC is attempting to update its Green Guides, which outline the rules for companies' environmental claims about their products. These are the guidelines that say that you can't label a paper bag "reuseable" if it falls apart on the third use, that you can't call a plastic container "recyclable" if facilities for recycling that type of plastic are not available for most people, that you can't call a pesticide "non-toxic" if it will arguably damage people's health, and so on.

For this update, the FTC seeks to issue guidelines about claims that a company's (or product's) carbon emissions have been offset – that is, that the gases emitted are made up for by putting money toward a project, such as a forest or a wind farm, that keeps an equivalent amount out of the atmosphere.

The FTC also wants to clarify the concept of renewable-energy certificates, or RECs, tradeable credits that represent proof that 1 megawatt-hour of electricity was generated by renewable energy.

Currently, the carbon offset and REC markets are largely unregulated. Potential buyers face an assortment of for-profit and nonprofit companies, independent certifying agencies, projects, and prices. And, as the Guardian pointed out last year, sometimes the money spent on an offset doesn't even make it to the project.

Wal-Mart occasionally partners with companies that attempt to offset their emissions, such as Dell computers or a fair-trade coffee producer.

So when the FTC solicited comments on its process of defining carbon offsets and RECs, Wal-Mart wrote in, saying that the company would prefer keeping things casual for now [PDF].

There are currently four proposed U. S. regional greenhouse gas cap-and-trade programs, approximately thirty mandatory U.S. State renewable portfolio standards, and voluntary REC and carbon offset markets, all with varying, and sometimes conflicting, requirements. As a result, standards for what constitutes an offset or a REC are not necessarily consistent from one provider to another. In addition, these current programs could all change or be eliminated with the enactment of federal legislation, or they could continue in forms that supplement any forthcoming federal programs. Although some may urge otherwise, the Commission should resist the temptation to define what constitutes an eligible offset or REC. Doing so would require the Commission to resolve highly technical environmental debates that are beyond its expertise.
Rather than attempting to define offsets or RECs, the Commission should rely on the flexibility inherent in the "reasonable basis doctrine." The fact that standards may differ from one seller to another simply reflects the fact that there is no consensus about what does, or should, constitute a carbon offset. Different authoritative and expert institutions have adopted different, but reasonable, approaches. Although the Commission should insist that all carbon offset claims are supported by a reasonable basis, FTC precedent provides no reason to choose one reasonable approach over another.

See the circular logic here? Wal-Mart is arguing that we should not seek to come up with a firm definition of RECs and offsets because there doesn't yet exist a firm definition of RECs and offsets. But it's this very ambiguity that prompted the FTC to seek clarity on the subject in the first place.

Wal-Mart Watch is having none of it. The union-backed advocacy group is calling the company on what it sees as its fear of comittment.

Wal-Mart’s attempt to keep offsets guidelines vague shows the company is more interested in marketing potential than actual environmental change. Unspecific standards would allow the retailer to ‘commit’ to carbon-neutrality, without providing much real documentation. A responsible, sustainable corporation would place the necessity of carbon-offset clarification and oversight in front of the bottom-line.

Call me pollyannish, but I'm not ready to believe that Wal-Mart executives are as environmentally heartless as Wal-Mart Watch makes them out to be. In fact, I was so puzzled by what seems to me to be a fear of committment, that I did a very un-blogger like thing: I called them up. They said that they would get back to me on Friday, so stay tuned.

Update: Still haven't heard from Wal-Mart, although one of their PR people emailed me to say they haven't forgotten about me. I did, however, get a note from William Bert, a spokesman from Carbonfund, a leading nonprofit purveyor of carbon offsets. Here's what he had to say:

I think what Wal-mart was getting at in their comments was this: there are decades of accumulated scientific experience and hundreds of stakeholder organizations that have participated in developing the standards for the voluntary carbon offset industry, and since the FTC is not a scientific body it should resist attempting to resolve the competing opinions of dozens of scientists and expert organizations. That’s a job for the EPA, our government’s official environmental science agency.  Carbonfund.org would support the EPA, with its scientific expertise, bringing stakeholders together to formalize standards.

Another update: True to their word, Wal-Mart got back to me with a statement. Here's what they have to say:

Wal-Mart supports a national effort to reduce greenhouse gas emissions – including the enactment of a well-designed cap-and-trade system. Wal-Mart believes that a well-designed cap-and-trade system will foster competition, innovation, and business-to-business and business-to-consumer transactions.
We believe that the most important things for our company to do are: 1) reduce our own carbon footprint so we can be sure that our efforts have measurable, real results, 2) reduce the carbon impact of our supply chain, 3) help our customers’ reduce the carbon impacts of the use of the products we sell, and 4) provide support and constructive input into the public policy process.
We have a very aggressive goal to reduce our own footprint, including:
1. Make our truck fleet 25% more efficient by 2008; and 100% more efficient by 2015
2. Reduce GHG from 2005 and earlier existing stores, clubs and DC’s by 20% by 2012
3. Open a viable store prototype that is up to 25-30% more energy efficient by 2009
Additionally, Wal-Mart is in the early phases of developing a program to reduce the carbon associated with the manufacture, shipment, and use of the products we sell.
In order to have the best collaborative decision in the formal definition of what constitutes a Renewable Energy Certificate (REC) or an offset, there are several governmental entities and highly technical experts with vast environmental expertise that could and should be included in these important regulations, to enable the flexibility of new innovation and technology that is occurring daily across the world.
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