Carbon Planet: A Transparent Carbon Offsetter?
by Warren McLaren, Sydney on 03.29.07
At our back-of-house email meetings TreeHugger’s writers have been debating the merits of various carbon offset schemes. One of the reoccurring themes to surface was that of transparency, of where the money was going. Particularly as most such offset companies seem a little coy about this aspect. So it came as a bit of a surprise when digging around Carbon Planet’s website to learn they were remarkably very frank on this point. “People sometimes question Carbon Planet's margin (which is currently running at thirty percent). Why, they ask, should they purchase carbon credits when Carbon Planet is taking ‘so much’.” They go on to say, ”We choose to publish where the money you pay goes because we are committed to transparency and because we want to allay fears of new potential customers that the wholesale price of carbon credits is vastly less (e.g. 1%) than our retail price. However, we do not expect to be criticised for margins of the order of thirty percent. First, the thirty percent is a gross margin, not a profit margin. From that thirty percent we must run Carbon Planet — sales, marketing, web site, supply, the lot, and at this stage the profit is very much smaller than thirty percent.” Elsewhere on the site they even go to the trouble of telling you who they bank with, and which brand of computer they use. Much more on their business model can be found at . ::Carbon Planet’ Philosophy FAQ.
I have met Dave Sag from carbon planet, and his views on the importance of transparency are strong. He is very critical of the way that certain carbon offset organisation operate.
Transparency is one issue, other issues include permenance, leakage, additionality...it's all rather complex. Personally I buy non landuse carbon offsets so that permenance and leakage are not issues, additionality and transparency are still problamatic, i would say that transparency is less of an issue of dealing with a trust; additionality can be assured to a rasonable degree if the projects stick to the WWF Gold Standard.
Complex, but once you have decided on your offset organisation of choice then you can stick with them and have a degree of confidence.
I think carbon credits are great; whats important about them are the project they come from, not the label they are given.
I am a solar energy engineer, and have conducted lots of research into carbon credits. I think that the place of carbon credits is to drive new investments into cleaner technologies and efficient practices.
The carbon credits sold by Carbon Planet do not have any value for our atmosphere at all.
They are registered under the NSW GGAS scheme (which commenced in 2003) and were generated through tree plantings undertaken by Forests NSW in 1997. As this is 6 years before the scheme even started, then it cannot be said that the tress were planted BECAUSE of the scheme. This makes them non-additional. as the business as usual mandate of Forests NSW is to plant trees and manage forests (i.e not logging them). So when you buy carbon credits from carbon planet, you really are buying nothing, or paying for business as usual.
It would be better to support a non-profit organisation like Greenfleet that take over 80% of your money and plant NEW trees with it rather than pay Carbon Planet for doing nothing at all.
I'm sorry Warren, did Carbon Planet say their Gross Margin was 30%? Maybe they were referring to their cost of goods. Currently I can buy 1 tonne CO2 (a NGAC) from Carbon Planet for AUD$23. Now the current market price for an NGAC is less than $7. So I would have to argue that their gross margin is 70%, and their COST OF GOODS is 30%. Compare this to an organisation like Climate Care for example, and they are taking consumers for a ride.
Nice article. I just thought it worth weighing in to some of the comments above however.
First, Bilson, Carbon Planet sells a wide variety of types of carbon credits, not just NSW Forestry credits. The credits we retail direct to consumers have been certified under the NGAS scheme and comprise both sequestration (forestry) and carbon saving credits. You can choose what you'd prefer.
Second, Fredrick, the last batch of NGACs we bought cost us around AU$14 per tonne, so the original % is about right. I defy to you be able to buy a small clip of NGACs for under AU$10 now.
Climate Care is a great company with lots of nice people but they don't transfer the ownedship of the credits they sell. Ditto for most 'offsetters'. Carbon Planet transfers the ownership of the credits it sells. This makes it much more transparent.
Thanks
Dave Sag
Founder and Executive Director
Carbon Planet
http://www.carbonplanet.com