Carbon Offsets and Carbon Credit - What is This New Green Marketing?

By Kathleen Boylan

More and more companies are marketing their products as climate friendly, carbon neutral or offering carbon offsets. Many airlines now offer their customers the option to 'offset' the carbon footprint of their travel. Soon you will see carbon neutral ketchup and pineapples in grocery stores. What does this green marketing strategy really mean? To start off it is important to understand why carbon is being used to sell products and to quantify the greenness of certain products over others.

The term "carbon" refers to the molecule carbon dioxide. When humans breath out they release carbon dioxide. It is something that is natural to our ecosystems - when released naturally. Trees usually take in this carbon dioxide and utilize it. So do our soils and bodies of water. Trees convert carbon dioxide and release oxygen which we and other animals breath in to live.

Carbon dioxide levels naturally shift as a result of the interaction of numerous biological processes on the earth. The problem with carbon dioxide is the type. With industrialization came the increased release of man made (not natural) carbon dioxide, methane, nitrous oxide and other gases from industries like: petroleum extraction and refinement; large agri-business and chemical fertilizers; construction and landfills containing numerous chemicals; manufacturing plastics; and numerous others. These man made industries are not natural and therefore do not have natural ways to offset their impact. Worst industries like pulp and paper, agribusiness and petroleum extraction remove forests, destroy soils and water systems, throwing off the natural balance nature has created to remove carbon dioxide.

You do not need to believe global warming theories to conclude that Mother Nature is under stress and needs a serious pink happy pill or we are headed for a major feminine melt-down. So let's put all those debates aside and just look at carbon footprints and offsets as a simple way of measuring, for the world of business, the negative effect on our planet from doing business.

Imagine a basement in a house. When we add carbon to our world it is like adding water to our basement. The more and more we add, the bigger and bigger the problem. When we talk about carbon offsets it is similar to figuring out ways to remove the water from the flooded basement, preventing the basement from becoming flooded or even better, building better basements so flooding won't even be an issue.

When governments begin to measure the carbon impact of man-made industries they can hold companies accountable for their impact on our planet. Governments around the world are looking at how to cap, meaning limit, how much these companies/industries should (if at all) impact our planet. Once they set these limits, companies will be forced to pay fines, to change their impact and/or purchase carbon offsets. Bad companies will be able to offset some (or all) of their impact by purchasing carbon offsets from companies and organizations who are doing things which reduce carbon emissions in the world. The success of this model depends on a few variables.

Companies who are reducing their carbon emissions, are creating carbon neutral products, or are selling carbon offsets to customers, may be perceived by the market and consumers as caring for the planet. It is left to be seen how consumers will respond to this form of corporate responsibility/marketing. Will it increase sales or attract and retain new customers? This will largely depend on consumer confidence in the legitimacy of these carbon offsets in taking care of the planet.

If you are going to be purchasing carbon offsets as a company (or as a consumer) do not be fooled by so-called 'non-profit' status of an organization. Non-profits and for-profit companies can both be trading carbon offsets. A non-profit may simply spend all of its revenues by its year end. It does not mean it is a charity.

Investigate the organization or company who is selling the offsets. Determine who approved their carbon offsets as legitimate. There are internationally recognized third party verifiers to audit traders of carbon offsets. This ensures that the organization selling carbon credits is not double selling them or is not fabricating the source of their beneficial carbon credits. Not all carbon offsets are of equal value. One of the most common carbon offsets is the ones common from tree planting. Where are the trees being planted? What kind of trees? Why are there no trees in that location? How will those trees be protected over the next 100 years? Am I paying to have trees planted because a logging company did not honour its commitment to re-plant what it took down?

Ideally the purchase of carbon offsets to make your company, product or service carbon neutral should help projects and green companies that would otherwise not survive in today's economy. For example a gas company may choose to purchase carbon offsets from a compost making business, that has no government funding or legislation to drive business to them. The compost business is taking a green business risk. Carbon offsets from the gas company become an extra source of revenue to help keep them in business while the market adjusts to bring up the interest in compost sales. The gas company still needs to take steps to reduce its carbon impact but in the meantime it purchases carbon offsets.

When someone promotes their product or company as carbon neutral or carbon positive, it should be easy to determine how. Companies who can educate their consumers and quantify in a transparent way their climate friendly actions, will retain loyal customers. In this day and age, it won't be long before consumers can tell the difference between the companies committed to sustainable environmental change and those interested in boosting short term sales with green marketing claims.

Kathleen M. Boylan is the founder and owner of The Waste Reduction Store. Kathleen is a speaker on making sense of green claims. A savvy business woman, Kathleen is also a long time environmentalist with international experience in Africa, Asia and Central America. Kathleen built her green import and export business from the ground up. She now trains others on how to source and market green products in an ethical way and promotes the need for businesses to create compost. Kathleen lives in Winnipeg Canada with her two sons and stand-up comic husband, Dan Licoppe. She can be reached through: http://www.wastereductionstore.com

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