Dutch Bank Introduces "Climate Credit Card"
by Collin Dunn, Corvallis, OR, USA on 10. 2.06

Dutch bank Rabobank is aiming to neutralize the purchase of energy-hungry goods and services by introducing a "climate credit card" that puts money into environmentally friendly projects. The climate-conscious card will pay a sum proportionate to the type of purchase into environmental projects run by the World Wide Fund for Nature (WWF), with the level of contribution being decided by the impact the purchase would make upon greenhouse gas emissions. For example, an airplane ticket or fill-up at a gas station would give a greater contribution than an everyday trip to the grocery store or a meal at a restaurant. "We wanted to come up with a way to balance consumer behaviors to a compensation mechanism," said Johan van de Gronden, head of the WWF in the Netherlands. We've seen this kind of thing before, with the Triodos green credit card and AmEx's RED card, and with the Emissary Credit Card concept not far away (we hope), cards that do good may make a real impact in the near future. ::Insurance Business Review via Linton at ::Hugg. More info available at ::Planet Ark
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But surely this is rewarding the wrong behaviour? If I've got this right, WWF (or whoever) get larger rewards by consumers purchasing flights and un-eco-friendly products/services. Am I alone in thinking this is wrong? Shouldn't we be encouraging consumers to purchase environmentally friendly products?
Hi SJABradley
Agreed, but how would you reward purchasers for buying environmentally friendly products? More importantly, how would you encourage them to pay more for an environmentally friendly product whilst also encouraging retailers in stocking environmentally friendly products?
Well, you could for example, put a tax on unfriendly products to deter purchasing those items. That would effectively create a carbon/eco tax. Although that would push consumers in the right direction, it wouldn't necessarily help retailers because their costs for the eco-friendly products are still quite high.
Well, then you could subsidise the costs of the eco-friendly products using the carbon/eco tax. That would effectively reduce the costs of eco-friendly products to encourage retailers in stocking such items.
BUT, would you trust a government to collect carbon/eco taxes, and then set up a massively complicated and bureaucratic system to correctly and fairly distribute the taxes to subsidise all the deserving products in the correct proportions?
Solution = remove the government and tax system from the equation, and you've suddenly created the carbon credit trading schemes. These reward eco-friendly manufacturers/suppliers/projects with carbon credits for eco-friendly results. These carbon credits become a commodity which can be converted into cash to help subsidise their costs.
So where does the cash come from?
It comes from consumers and companies who are seeking to reduce their carbon footprints or impact on the environment.
I know at first glance using carbon offsets seems as though it is not addressing the problem, but it is addressing it more significantly than any other approach possibly could.
At the end of the day, economics is about psychology and behaviour. The "rules" of economics are just observations of human nature. Wanting the world of consumers to just simply purchase the "right" products because it will make them feel fuzzy inside is not going to produce results. But, changing the economic landscape so that products incorporate their "true environmental costs" WILL result in people buying the right products from the right manufacturers.
If you want to see a real change you have to acknowledge that a holistic economic approach is required. Too often money is seen as an evil, because profit seeking has resulted in a lot of environmental problems. But the fact is that money is just pieces of paper or plastic. It only has the moral implication that is assigned to it.
Carbon credit schemes makes money work for the environment and have the capacity to create the benefits we are all looking for, because it addresses all aspects of the consumer and resource chain. How successful it becomes will depend on how universally it is adopted, and the standards that are used in recognising and creating carbon credits.
Rabobank, a dutch bank, is famous for its innovations. So I am not that surprise that they have introduced this pretty unique and useful idea to the credit card market.