The TH Interview: Tom Arnold of TerraPass on the Future of Carbon Offsets

Men install solar panels on a roof.

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TreeHugger arranged this interview with TerraPass representative Tom Arnold during recent blog-roversies over the usefulness of carbon “offsetting:" a controversy that will likely continue, reflecting the difficulty, we think, of explaining the complexities in sound bytes and blog chunks. We completed our discussion with Tom following Al Gore’s 2007 Oscar Award; a period during which cable-TV talk show host Glen Beck also interviewed Tom Arnold live, as discussed here. TerraPass provided the carbon offsets for all Oscar ceremony participants, as explained here. With no further ado, here is Tom Arnold, Chief Environmental Officer, TerraPass.

TreeHugger: How did you get involved with TerraPass?

Tom Arnold: I walked into a classroom in grad school at the University of Pennsylvania. Really. 41 students started TerraPass as a response to a professor's challenge. Six weeks later we had 156 customers, were profitable, and had spent only half of the professor's gracious $5,000 loan. I've been leading the team since the end of the class. Adam Stein, who does most of the blogging, was also in the class with me. This Friday, we crossed 40,000 customers.

TH: People are getting more emotional, some almost frantic about the threat of climate change. That might make it even harder for the market to comprehend the value of TerraPass services. Can you tell us what you are planning to help customers better understand the service and its benefits?

TA: Our research shows that people are really worried about climate change, but feel so frustrated by the enormity of the problem. Five million people saw An Inconvenient Truth, and most of them sat at the end of the film wondering what they should do.

For TerraPass, being relevant for customers means answering that question. Part of it is well-designed calculators, part of it is TerraPass stickers and tags, and part of it is plain old information delivered in a weekly newsletter.

TH: Your website is your primary point-of-sale, is that right?

TA: It's the primary way that people see that there is a "there there" behind TerraPass. It's where our community hangs out, and where you probably send friends.

Partnerships have been pretty important for our growth. We're seeing as many as a thousand people a week select TerraPass when they buy a ticket on Expedia. That's the type of partnership that companies like TerraPass can use to get millions of people involved. That being said, we're investing a lot in the web experience, and thats where most of the growth should come from.

TH: Do your foresee marketing Terrapass in other settings, or with video clips for example?

TA: We've experimented with some video, and we have some great cow-power footage coming out soon. Interestingly enough, our audience wants podcasts as well, which means I have the perfect excuse to finally get a pod on which to cast.

TH: Being a for-profit entity with roots in a top-rated business school gives TerraPass extra pin-stripe points. Are there any drawbacks to that brand image in maybe the TreeHugger market segment?

TA: Uh, did you notice I said "grad school" at the top? There are big pluses from some members, but we have to prove every day that we're genuine, concerned about the issue, and doing the right thing. We believe in the concept of Mission Driven Businesses, but there's no doubt that we're out on front with a lot to prove. We've been fortunate so far to have an enthusiastic and understanding customer base. We're looking to carefully grow that and nurture that into an effective community.

TH: How sustainable do you feel the Terrapass business model is? Let me rephrase that if I could. Where do you see your business in 20 years?

TA: 2027? CO2 will be 425 PPM, but Kyoto phase III will be kicking in a big way, with time frames for reduction well into the latter half of the century. Consumer emissions will be left mainly out of the regulated picture, but the voluntary market will be thriving, with 10's of millions of consumers participating in the marketplace at rates similar to recycling rates of today. TerraPass will be a big player (along with NativeEnergy, Virgin, and Capital One) and will have also branched out into other ecosystem services. And we'll be digging up our old podcasts and laughing at them. I think Michael Jackson will finally expire around this time.

Okay, back to reality. The real question is... Is this a business where success means shutting down the business? We don't think so -- climate change is huge 100 year problem and the drive to reduce our emissions is only going to increase.

TH: We've written a fair amount about "planetary engineering" options like marine iron seeding. Some call these options "geo-engineering." There's a tendency to view them as overly aggressive or having frightful unintended consequences. At the other end of the mitigation spectrum is something everyone loves: tree planting. Can you tell us what attributes you look for when seeking out new projects?

TA: The problem with geo-engineering issues is that they delay action. They are kind of like the hydrogen car. Its been just 5 years from launch for about 20 years now.

We're into American clean energy. It sounds simple, but high quality reductions from Wind and Cow-Power are sitting right under our collective noses. If we are going to get on top of climate change, we have to change our energy infrastructure. These projects have the added benefit of adding to our energy independence, which can help bring more supporters. (If you don't believe me, read the CNN-HD transcript and see Glenn Beck complement TerraPass)

We're actually not fans of tree planting unless you are very serious about the science of it (Pacific Forest Trust leads the pack, in our opinion). A lot of tree planting (and even some renewables) are sold as a front loaded instrument, where reductions are claimed in year one for a 20, 40, or even 100 year period. With just 10 years to stabilize emissions, we don't think this is the best use of precious consumer dollars.

Of course, we believe in verification at the project and entity level. We were the first to publish our verification report. TerraPass is also a strong believer in independent standards. The squabbling and report writing from industry participants is baffling to us -- imagine our how our customers feel! We're happy that the CRS GHG Standard is reviewing ample comments and that this summer we can have a productive stakeholder based discussion on the appropriate standards for companies like TerraPass and NativeEnergy.

Closing thoughts by the author: The University of Pennsylvania Professor Tom refers to certainly deserves the "Power of One" award.

A voluntary offset provider certification standard, the CRS-GHG as outlined here, for judging performance and documenting management systems in place certainly is the best way to settle controversies. TreeHugger will report on the final version. Perhaps Tom will join us again for that occasion.

Image credit: TerraPass, Blue Canyon project.