Consumer; Attention Shoppers: Carbon Offsets in Aisle 6
Are you buying groceries at Whole Foods? You can pick up a $5 or $15 ”wind power card” as well. The money goes to Renewable Choice Energy, which uses it to support wind farms.
Taking a vacation? Book it through Travelocity, pay $10 to $40 more, and Travelocity will give the money to the Conservation Fund to plant enough trees to offset your share of the carbon that your plane, rental car and hotel stay will produce.
Call it Phase 2 of the corporate response to global warming. Companies that have been touting their own environmental responsibility are now saying to their customers, ”If you are concerned about global warming, don’t just put our money where your mouth is, put up some of your own.”
In the environmental community, the trend is playing to mixed reviews. Environmentalists fear that companies are ”absolving themselves of guilt for making gas guzzlers or being energy hogs,” as Daniel F. Becker, the director of the Sierra Club’s global warming program, put it. They fear that consumers who ease their consciences by writing a check may be less inclined to turn down the thermostat, car pool or weatherproof their homes.
Actually, most of the companies that are charging consumers for green energy have cleaned up their own acts. ”We’ve got solar roofs, we buy biomass, we do carbon credits, we compost waste and recycle our cardboard,” said Michael Besancon, the chairman of Whole Foods Market’s green mission task force. ”Why not make it easy and seamless for customers to be green, too?”
Similarly, Dell has been buying renewable energy and offering free recycling of computers. Soon it will have a program in which customers can pay an extra $2 for a notebook computer or $6 for a desktop. Dell will funnel the cash to the Conservation Fund and the Carbonfund, which will plant trees that absorb carbon dioxide. The idea is to offset emissions from producing the electricity used to run the computer.
”We’ve taken responsibility for design, manufacturing and end of life disposal, and now we’re offering consumers a convenient way to offset the climate implications of their usage,” said Tod Arbogast, Dell’s director of sustainable business.
But the concern that donations will create complacency is not as easily addressed. ”Helping consumers buy offsets is feel-good environmentalism that lets people duck out of responsibility for changing their behavior,” said Michael J. Brune, the executive director of Rainforest Action Network.
Mr. Becker of the Sierra Club is blunter: ”People view offsets as papal indulgences that let them make environmentally bad decisions.”
It is not a hollow concern. Sian Mooney, a professor at Boise State University who has written about the economic implications of climate change, said that her home was not well insulated, she did not buy green energy and she did not always rent ”green” cars. She spends $100 to $150 on carbon credits each year.
”It gives me ‘warm and fuzzies’ for doing something good,” Ms. Mooney said. ”But the way to get real carbon reductions is if people like me cut back on airplane flights and such.”
Most environmentalists concede that consumers are unlikely to make radical changes. But many also contend that the programs let consumers vote with their pocketbooks for carbon constraints.
”If the public shows that it cares enough to pay extra for greenness, it just might spur Congress to finally pass legislation,” said Eugene Linden, author of ”The Winds of Change,” which traces the effects of climate change on past civilizations.
The show of public support might also speed up the development of alternate energy sources, said Robert A. Sheppard, deputy director of corporate programs for Clean Air-Cool Planet, an environmental education group with a guide to Web sites selling carbon offsets. ”If consumers buy enough renewable energy credits, it will eventually expand the market for green energy,” he said.
That may be happening already. More utilities are giving residential customers the ability to pay extra for green power – electricity that is generated by windmills, solar cells or animal waste. They are not suggesting that the actual electrons flowing to the consumer’s home were generated from renewable sources, but that utilities will use the money to add green power to their grids.
In some cases, they charge more per kilowatt hour; in others, they charge a flat fee for such energy. For example, the Sacramento Municipal Utility District gives residential customers the choice of paying an additional $6 a month for all-green energy, or $3 for half-green.
”When we set this up, the issue was energy independence, but curbing global warming has become just as important,” said Michael Zannakis, who runs the program for the utility.
Some utilities are including a line on the monthly bill that details the carbon emissions that most likely resulted from a customer’s energy use. A few suggest that customers tack on money to their check, which the utility will channel to projects like wind farms to lower the carbon load.
Pacific Gas and Electric, which gets half its energy from clean sources like hydropower, will soon begin ClimateSmart. The program will tell consumers how many pounds of carbon their household was responsible for, and suggest an amount, typically less than $5 a month, to add to their bill. Pacific Gas, which is adding nearly $1.5 million of its own money to neutralize its own carbon footprint, will use the funds to buy – and take out of circulation – carbon credits from projects in California.
Californians could do that on their own by going to a Web site or brokers that sell carbon offsets. Yet a survey by Lippincott Mercer showed that many consumers did not buy carbon offset credits because they considered it too much trouble to go to third-party sites.
The Pacific Gas program will let consumers pay for their credits and electricity at the same time. Just as important, ”We’ll have plenty of smart lawyers negotiating the contracts, and making sure that every penny of our customers’ money is going for sequestering greenhouse gases,” said Wendy Pulling, the director of environmental policy.
Unlike utilities, consumer companies generally do not pay for their go-green programs.
Hertz charges customers who want to reserve a fuel-efficient ”green” car an extra $3 to $5 a day to guarantee that Hertz will not trade them up to a gas guzzler if there are no green cars on the lot. Richard D. Broome, vice president of corporate affairs, said that the incremental cost covered the logistics of ensuring that the cars were available.
Similarly, Ikea will begin charging 5 cents for the throwaway plastic bags it used to give away; the money will go to American Forests to plant trees. The reusable blue bag that it once sold for 99 cents will be just 59 cents, Ikea’s cost. ”We go through 90 million bags in the United States each year, and they just wind up littering the planet,” said Mona Liss, an Ikea spokeswoman.
Some companies are looking for ways to make money by easing consumer guilt. This year, G.E. Energy Financial Services and the AES Corporation formed a partnership to develop greenhouse-gas emission projects and to sell the resulting carbon credits to other companies. ”That could certainly include retailers, who might sell the credits to theirown customers,” said Kevin Walsh, a managing director of the General Electric unit.
That is assuming that consumers want to buy. Most of the programs are too new to gauge whether people will do so. And in the business community, skeptics abound.
”I just don’t see an awful lot of people ponying up for sustainable products,” said Paul V. Tebo, an environmental consultant who was DuPont’s vice president for health, safety and environment until 2004. Neither does William F. Banholzer, chief technology officer of the Dow Chemical Company. Consumers have long professed concern about chemicals leaching from landfills, he noted, yet Dow could not get customers to pay more for biodegradable flame retardants.
”If consumers really cared enough to pay a premium for green, everyone would buy fluorescent light bulbs and diesel-engine or hybrid cars,” he said.
Still, the chances that companies will back away from the programs are slim. ”Companies are recognizing that as long as price and quality are good, a green pitch can push the customer to their side,” said Andrew Winston, author of ”Green to Gold,” a book that details how companies turn environmental issues to their competitive advantage.
Environmentalists note that the let-the-consumers-pay programs might have a beneficial long-term effect. As Eileen Claussen, president of the Pew Center on Global Climate Change, put it, ”These programs get the idea across that individuals are neither blameless nor helpless, and can really make a difference.”