Last week the Federal Trade Commission, which evaluates advertising claims, held a public hearing on green marketing, focusing specifically on carbon offsets and the way they are marketed and advertised to consumers. Carbon offsetting sounds like a great way for people to embrace environmental responsibility, but are consumers being misled?

The Offset Economy

Carbon offsets have become a popular option for travel companies, including some major airlines and automotive companies. By purchasing offsets from partnered providers, consumers are told that they can make up for the environmental impact of emissions produced by their travel by contributing to reforestation programs, wind farms and more.

According to an article in the New York Times, consumers spent more than $54 million on such programs last year. The FTC’s hearing raised the question of whether the claims behind carbon offset programs can be substantiated, and whether the programs are performing at the level they’re promising consumers.

For example, according to the Times article, planting a tree costs carbon offset suppliers approximately $5, and that tree must live at least 100 years to compensate for the emissions it should offset. The issue in question is whether industry advertising makes these types of details clear to consumers when they’re making the purchase.

Choosing a Provider

Right now, no set of standards or certifications exists for carbon offset providers such as TerraPass, LiveNeutral and CarbonFund. That’s not to say, though, that such providers aren’t looking for ways to educate consumers.

Adam Stern, senior advisor for business development and environmental policy at carbon offset provider TerraPass noted, “TerraPass welcomes the FTC’s interest in exploring how it could help the carbon offset industry and protect consumers.” When asked if more consumer education was needed, he added, “The more information consumers have, the smarter buying decisions they can make.”

The FTC plans to announce more public hearings on green topics in 2008. How can consumers best evaluate carbon offset programs when deciding where to invest their money until stricter guidelines are put into place?

In December 2006, the non-profit organization Clean Air, Cool Planet issued a report entitled “A Consumers’ Guide to Carbon Offsets for Carbon Neutrality,” in which they scored various carbon offset providers on a scale from 1–10. The report offers a list of questions to ask when you’re considering purchasing offsets from a provider, including whether the offsets result from specific projects and whether the offsets have been evaluated by a third-party standard as a credible source.