Carbon Offsets: Analysis of Present Techniques

By Andrew Carter

With “global warming” and “climate change” commonly used terms, more people than ever are environmentally aware. Accompanying this awareness is a desire to reduce personal impact on the atmosphere.

Carbon Dioxide is present in precariously high amounts in the Earth’s atmosphere, and is one of the largest contributors to global warming. CO2 is produced from many common anthropogenic processes, such as fossil fuel combustion, transportation, manufacturing and agriculture.

There are limited regulations on CO2 emissions. Despite this, interest is moving to life style changes and towards finding ways of personally compensating for carbon production. This has allowed for a voluntary abatement market to emerge. Businesses around the world are using carbon abatement and sequestration projects to reduce atmospheric CO2. Some sell the amount of carbon removed/prevented from the atmosphere as an offset credit. Other businesses can purchase these credits to compensate for the amount of CO2 they emit into the atmosphere, making them “Carbon-Neutral.” Consumers are beginning to choose carbon-neutral businesses and this fact is helping drive the carbon trading market.

The offset market provides an option for individuals as well, offering different credit options for the amount of carbon to be offset.

In all cases, it is possible to approximate the overall carbon emissions released for a single person, family, or business with up-to-date data and detailed calculations of simple lifestyle characteristics, such as electricity and fuel consumption.

The following is a case study of four major carbon offset projects. It analyzes their personal carbon calculators, project approach, and product costs. This will allow you to compare them with the Ocean Arks carbon sequestration project in Costa Rica.

Case Studies

Terrapass
www.terrapass.com

405 El Camino Real
#234
Menlo Park, CA 94025
(877) 210-9581

Terrapass is one of the most successful carbon off-set projects in the United States. The easy to use website and relatively low-cost credits provide the consumer a viable option in terms of offsetting their carbon emissions.

The company provides three types of offset products: The Home Pass, Road Pass, and Flight Pass. Each of these passes has a detailed calculator to determine approximate carbon emissions, which are presented in pounds/yr.

To offset the amount of Carbon Dioxide the consumer allots, Terrapass provides funding towards numerous atmospheric carbon dioxide prevention programs. 33.3% of offsets are provided by funding towards wind-power projects internationally. 66.6% of the offsets are credits provided by agriculture and landfill methane abatement programs, biofuel programs, and purchases from the Chicago Climate Exchange.

Due to the wide span of providers for carbon offset credits, it is difficult for the customer to determine what is actually being accomplished by the product provided by Terrapass. There is no designated location where funding will be spent, so there is no real way to determine if the project is actually succeeding or if the money given to Terrapass is actually being spent on carbon offsets.

Cost:
Cost: Avg. $10.00 per credit (ton CO2), though lowers slightly with increased order.

Carbon Planet
www.carbonplanet.com

Level 4, 170 North Terrace
Adelaide SA 5000
Australia
+61 8 8232-9132

Carbon Planet is an Australian company established in 2000 which began trading carbon credits to the public in 2005. They are certified by the New South Wales Greenhouse Abatement Program (NGAC) which is a program widely used in Oceania, as well as some areas of Europe and the United States (Department of Environment and Climate Change, NSW).

Carbon Planet specifically deals in reforestation to provide carbon offsets, which is uncommon when looking at most other projects. They have been planting trees since 1990, and, in compliance with the NGAC, were not planted on cleared old growth forest land. The group states that the plantings are in northeastern New South Wales Australia, ranging from Taree to the Queensland border.

One characteristic of this program that is specifically interesting is that they provide the promise that if the tree representing a purchased credit comes into harm within 100 years of purchase, it is replaced (at no cost to the customer) with another source (be it another tree, or possible funding of another program).

This group does not provide an online calculator, but allows for an average human carbon emission estimate or custom audit to determine how many credits are to be purchased.

Cost:
AU$23 per credit
USD $19.05 / credit (Ton CO2)

Products Offered:

• Subscription (monthly basis)
  • Either average carbon emission per person (estimated by country) or custom tons/month input, provides option of ongoing payment.
• Lifetime offset
  • Either average carbon emissions per person (estimated by country) or custom tons/month input, allows for offset of life until now, or for whole life (assuming average lifespan of 80 years)
• Carbon Credit Packages
• Starter Pack:
  2 Carbon Credits (2 tons CO2)
  AU$60 (USD $49.70)
• Car Pack:
  5 Carbon Credits (5 tons CO2)
  AU$115 (USD $95.27)
• Flight Pack:
  Per flight entered

Carbon Fund
www.carbonfund.org

10001 Dallas Avenue
Silver Spring, Maryland 20901
(240) 556-1908

The Carbon Fund is a non-profit organization, based out of Maryland, which provides offsets from various different sources.

The group follows the motto “It’s your carbon. It ought to be your choice where it goes.” This means that the customer has the choice of which CO2 oriented project their money goes towards (Carbon Fund 2006). The options given to the customer are: renewable energy, energy efficiency, restoration projects, or the whole grouping of them. Unlike other projects available, the Carbon Fund lists the specific projects the funding is going towards, as well as the certification processes showing the legitimacy of each project.

The renewable energy projects are the Ainsworth Wind Energy Facility in Nebraska, The Chicago Zero Energy Solar Homes project in Illinois, the Highmore Wind Farm in South Dakota, The Bishop Ranch Solar Project in California, Elk River Kansas, a Biomass Digester/inland Empire Utility Agency of California, Weatherford Wind Energy Center in Oklahoma, and a wind facility in Edgeley, North Dakota.

The “energy efficiency” credits are solely provided by the Chicago Climate Exchange, which supports companies which have improved energy efficiency and decreased CO2 emissions.

The reforestation projects include the Gallatin Natinoal Forest of Montana, Sequoia National Forest and Six Rivers National Forest of California, mangrove restoration in India in response to the 2005 tsunami, and community agroforestry education in Nepal.

Due to the wide span of projects the Carbon Fund works on, it is possible for them to charge a much lower cost per credit than many other offset projects. For example, reforestation in Montana alone is much more expensive (and also more quantifiable) than agroforestry education in Nepal, but when paired the average cost is much less. Although this group gives detail on the programs the customer supports, it does not allow for an easily quantifiable number for many of them, which makes the program less appealing.

Cost:
Approx. $4.90 / credit (ton CO2)

Products Offered

• Annual Car Offset
  • (differentiated into “green” car, efficient car, full-size car, and SUV”)
• Annual Personal and Family Offsets
• Monthly Personal and Family Offsets

(All priced at approximately $4.90 per ton CO2)

Native Energy
www.nativeenergy.com

823 Ferry Road
P.O. Box 539
Charlotte, VT 05445

(800) 924-6826

Native Energy is a majority Native American owned private company, based out of Charlotte, VT, offering carbon credits for personal or organizational usage. After credits are purchased from this group, money is put towards specific projects listed on their web-site. The current projects include Owl Feather War Bonnet Wind Farm, Wanner Family Dairy Farm Methane Project, Alaska Native Village Wind Project, and a Farmer-Owned Distributed Wind Turbines project.

As can be noted, as well as with previous projects they have worked with, the focus of Native Energy is specifically on offsetting carbon through funding of Wind power as well as methane diversion (Though methane and carbon dioxide are different compounds, they are both greenhouse gases, which is where this justification comes from).

The calculator provided on the website is difficult to use and extremely basic, but allows for personal input of tonnage of CO2 emissions. It seems that the group chose an arbitrary number of $12.00 per ton of CO2 to allow for an easy annual calculation, since there is no justification of price, and no way of figuring how much carbon is actually reduced from funding of these projects. The customer is allowed to choose between funding of wind energy, methane reduction projects, or a “50/50 blend” of the two. The website also does not allow any monitoring of the impact the customer’s purchase has made, making it difficult to understand what the group is really spending the money on and if an accurate amount of carbon is actually offset.

Cost:
$12.00 / credit (ton CO2)

Products offered:

• credits on a ton-by-ton basis

Carbon Calculator

This calculator was created to allow the average consumer to understand the factors that play into their carbon emissions, as well as how the prices are calculated. Sources for all of the data are provided, as well as justification for all of the calculations. Short descriptions support each subject to describe why the information they are providing is important. Equation cells are locked so that individuals cannot alter the data and skew the results. Clients should report their annual CO2 burden (in tons) to Ocean Arks, who will determine the cost per year.

Supplemental Readings

For further information on the basics of carbon dioxide emissions and offset projects, please use the following resources:

• CO2 Emissions. Climate Change: Earth’s Climate System. UCSD. <http://earthguide.ucsd.edu/virtualmuseum/climatechange1/04_1.shtml>
  Detailed descriptions on the basics of CO2 emissions and climate change. Excerpts from course at University of California, San Diego.
• CDIAC. Carbon Dioxide Information Analysis Center. Office of Biological and Environmental Research. Department of Energy. <http://cdiac.ornl.gov/>
  US Department of Energy center devoted specifically to Carbon Dioxide information. Large database of information on the many aspects of atmospheric carbon dioxide.
• CO2 Science. Center for the Study of Carbon Dioxide and Global Climate Change. <www.co2science.org> Education Center has up-to-date updates on carbon sequestration news and technology, as well as in-depth information on carbon dioxide emissions and global affect.

Further References

• “Average Annual Emissions and Fuel Consumption for Passenger Cars and Light Trucks” US Environmental Protection Agency. March 7, 2006. http://www.epa.gov/otaq/consumer/f00013.htm>
• Co2- Mobile.exe. GHG Protocol Initiative. October 2001. Updated January 2005. <http://www.ghgprotocol.org/templates/GHG5/layout.asp?type=p&MenuId=OTAx
• “Ecobusinesslinks.com Carbon Offset Survey” EcoBusiness Links Environmental Directory. April 28, 2007. <http://www.ecobusinesslinks.com/carbon_offset_wind_credits_carbon_reduction.htm>
• “Fuel and Energy Source Codes and Emissions Coefficients” Energy Information Agency. US Department of Energy. April 2000. < http://www.eia.doe.gov/oiaf/1605/factors.html>
• “Greenhouse Gases, Climate Change, and Energy.” National Energy Information Center. US Department of Energy. April 2, 2004. <http://www.eia.doe.gov/oiaf/1605/ggccebro/chapter1.html>
• “Greenhouse Gas Reduction Scheme” Greenhouse Office. Department of Environment and Climate Change. New South Wales Government. <http://www.greenhouse.nsw.gov.au/>\“Personal Emissions Calculator” US Environmental Protection Agency. November 30, 2006. <http://www.epa.gov/climatechange/emissions/ind_calculator.html>
• Turley, William. Forwarded E-mail Communication. April 24, 2007.
• “Your Carbon, Your Choice.” The Carbon Fund. 2006. <http://carbonfund.org/site/pages/our_offset_projects/>