TreeHugger: Carbon offsets are controversial. Some welcome them as a cost-effective way to reduce emissions, while others worry that by selling 'carbon neutrality' at the swipe of a credit card, they provide an excuse for 'business-as-usual'. What role do you see offsets playing in the wider move towards a sustainable economy?
Adam Stein: We're in a phase where people are waking up to the threat of climate change, but most of us haven't yet considered very deeply what is going to be required to actually prevent the worst effects of global warming. This is true even in much of the environmental community, where many proposed fixes are too narrow to address the full scope of the problem. So we end up with a lot of either/or formulations for how we should move forward. Should we offset or conserve? Is the future in wind or solar? The questions aren't always put so starkly, but every time I hear someone insist that offsets are a "distraction," I have to wonder, a distraction from what?
There is no single solution to global warming. If we are to reduce carbon emissions 80% by 2050, we need to make progress on several fronts simultaneously. Socolow's concept of stabilization wedges is the most useful way of framing the matter. Each wedge represents a gigaton of carbon reductions. We need to implement at least seven wedges, and the sooner, the better.
Conservation might make up one or more wedges. Improvements in efficiency could make up a few more. But the bulk will come in the form of low-carbon energy. That's where offsets can play a useful role as a funding mechanism for energy sources that aren't yet cost-competitive with coal. (Carbon sequestration could someday be important as well, and offsets are really the only funding source for sequestration projects.)
TH: What moves is the offset industry in general, and Terrapass in particular, making to ensure that it fulfills this potential? How do you avoid becoming a fig-leaf for inaction?
AS: Well, I'd be remiss if I didn't point out that inaction doesn't seem to need a fig leaf. Inaction is still the norm. Particularly for those of us dedicated to this cause, it's very easy to forget how far removed most Americans are from this issue.
But I agree that one of the primary benefits of offsets are as a mechanism to engage and educate individuals. If we market offsets responsibly, we can make the most of that engagement. Once people make an initial step — whether that means buying offsets, installing CFLs, or whatever — they commit themselves to fighting climate change. People like to be consistent in their actions and beliefs, so it's good to make that first step as easy as possible. Then you come back to them with other things they can do. TerraPass does this in a number of ways. We try to ensure that every communication we have with our customers carries a strong, practical conservation message.
TH: When you say 'offsets', many people still think about tree planting, yet Terrapass does not invest in tree planting schemes. Why is that, and is there a place for trees within a wider offsets portfolio?
AS: Tree planting projects unfortunately are not a credible way of generating carbon offsets. The primary issues are the timing and permanence of the carbon reductions. Trees can take 100 years to grow, and we really have a window of only about 10 years to get on top of this problem. There are also more fundamental scientific questions about whether managed forests really absorb carbon, problems with monoculture forests, questions about the albedo effects of trees, and so on.
Of course, trees are an incredibly important part of the ecosystem, and deforestation accounts for about 20% of global warming, so I would very much like to see these issues resolved. Forest preservation (rather than planting) has some potential. Only 6 CDM projects — out of almost 1,800 — involve forestry. It's still early days for trees.
But right now, the focus has to be on transforming the economy to low-carbon energy. That's the prize that offset dollars are best put toward.
TH: Offset providers face a particular challenge, in that they offer an intangible product - customers pay money, yet it can be hard to be 100% sure that that money results in the emissions savings that are promised. How can this be regulated, and should it be a case for voluntary industry standards, government legislation, or a combination of the two?
AS: Voluntary industry standards, definitely. For all of the attention it has received, the voluntary offset market is tiny — probably less than $10 million annually in the U.S. A ton of policy innovation is still taking place, and industry can move a lot more nimbly than government to address these issues. The first Green-e retail offset standard should be available this summer. It will reflect the cumulative input of dozens of stakeholders, and it will represent a real leap forward in transparency and consumer protection.
Perhaps when the market matures a bit more, there will be room for regulation. I'm certainly open to the idea, but the devil is really in the details. A lot of the issues that people care about most, such as additionality, aren't all that simple to legislate.
TH: What is the most important thing that those buying offsets can do, to ensure that their supplier is as reputable, and effective, as possible?
AS: Look for independent verification that suppliers are doing what they say they do. That's gotten a little trickier these days, because now almost everybody claims to be verified. Try to determine the credibility of the verification agency and look for a published verification report.
Look for organizations that can identify the specific projects they fund. Ideally, organizations should tell you exactly how many offsets they've purchased from each project. You should be able to review their complete portfolio and purchase history.
Avoid tree-planting projects as a source of offsets. It's great if you want to support tree projects as a form of habitat preservation, but don't count on them if your primary interest is climate change.
Check the timing of the carbon reductions that you are purchasing. This is a subtle point, but some offsetting companies may not actually be promising carbon reductions until several decades after you make your purchase. Sometimes there are acceptable reasons for the delay, but obviously this is not an ideal practice.
Finally, you should always feel free to pick up the phone or send an email to an organization that is asking for your money. A credible supplier will answer your questions.
TH: TerraPass appears to be growing rapidly, including appointing Erik Blachford as your new CEO, and greatly expanding your presence on the West Coast. What is the significance of these moves, and where do you see TerraPass in 10 years' time?
AS: From our customers' point of view, the significance is that we'll be able to expand our efforts at education and outreach. We're as much a web company as we are an offset retailer, and there is just a ton of room for innovation in sites that feed the public desire for tools and information regarding green living. We get so many great questions and requests from our customers, and now we have resources to address them. A seasoned executive like Erik will help us think big while making sure that we grow smartly.
Ten years? Ten months seems like a lifetime. Let's see — in ten years time, most of the world economy will be carbon-constrained. The global carbon trade will have worked through its initial hiccups, and a thriving voluntary market will exist alongside the regulated market. TerraPass will be one of several trusted brands helping individuals make choices that lessen their impact on the environment, sort of a Good Earthkeeping Seal of approval.
That, or we'll be manufacturing electric cars. Who knows?
TH: If you could persuade every person in the world to do one thing to help combat global warming, what would it be?
AS: Hmm. Getting back to what I said before, there's no one thing that applies equally well to someone living in New York and someone living in Shanghai. If I could get every American to do one thing, it would be to vote green and let your legislators know that you support a national carbon tax or cap-and-trade system. We need coherent policy to coordinate our response to this problem and to ensure that our efforts are up to the task. America has to lead on this issue, and so far we haven't been.
That seems a little dry though. My second wish would be that every American get a bike and use the damned thing. I can't think of a simpler technology that has so much to offer body, soul, and environment. The things are miracles on wheels.