It’s like the Oscars for the Patagonia set. Every April, just before Earth Day, San Francisco’s environmental community comes together at the city’s Opera House to laud six grassroots activists from around the globe, whose stories enrage and inspire. The prize offers recipients $150,000 to use as they see fit and international recognition that confers respect on their endeavors, pressures their local governments to act, and even bolsters their personal safety.

This year’s ceremony was particularly poignant as it was the first without prize founder Richard Goldman, who died last fall at age 90. Goldman and his wife Rhoda founded the prize in 1990, with one of its goals to inspire others. To that end, the ceremony is always attended by a group of local young people. The Goldmans’ adult children continue to be closely involved with the prize, continuing its legacy.

All the winners have done great work, but the stories of two particularly moved me.

Francisco Pineda.Photo: Goldman Environmental PrizeNinety percent of El Salvador’s water resources are tainted by industrial and municipal wastewater. While exploring new gold mines, Canadian mining giant Pacific Rim sucked up all the water from the creek that Francisco Pineda used to irrigate his crops. He organized his neighbors into the Environmental Committee of Cabañas, fighting the government to rescind the company’s mining permit. The government eventually responded, halting the mine, but Pacific Rim is suing in international court, calling into question national sovereignty. Three of Pineda’s colleagues were murdered for their activism, and now he lives with round-the-clock police protection.

Each year at least one of the recipients has been threatened with violence. This never fails to shock me: that the powerful are willing to kill to continue polluting or deforesting, and that these activists persevere in the face of great personal risk. For these ordinary, extraordinary people, their cause becomes bigger than themselves, than even the preservation of their own lives. But to Pineda, his fight is a matter of life and death. “We can live without gold, but we cannot live without water,” he said in his acceptance speech.

Raoul du Toit.Photo: Michelle GaddZimbabwe is a failed state whose people suffer endlessly under Robert Mugabe’s egocentricities. Against this backdrop of weak governance, corruption, and economic chaos, Raoul du Toit noticed the poaching and habitat threats to the highly endangered black rhino. He moved rhinos to a safer area, established breeding programs, and increased their population four-fold since 1992. Successful conservation requires involving the local community, and du Toit’s group educates children about environmental awareness, instills local pride that this iconic animal shares their home, and links financial support for schools to rhino births. Still, his efforts have suffered setbacks, such as when poachers killed 100 rhinos and hacked off their horns. A video showed the desecration: a bloody, minivan-sized animal on its side, legs jutting stiffly into the air, while a baby rhino stood by for days, trying to nurse. The most recent poaching victim, last week, was found with its horn hacked off its face, still alive, he told us. The audience gasped.

“Animals deserve better from the human race,” he said, his voice breaking. Offering us a tidbit of good news, he revealed that his organization had raised the baby and released it back into the wild, where, as a young adult, it continues to thrive.

Hilton Kelley.Photo: Goldman Environmental PrizeAs always, this year’s stories are overwhelming David-vs.-Goliath tales about seemingly insurmountable odds. Goldman winners are average people who notice environmental injustices in their backyards and can’t sit idly by. Their struggles always serve as a little kick in the pants that perhaps we could all do a little more. This year’s winner from North America, Hilton Kelley, is fighting the petrochemical pollution pressed up against his hometown of Port Arthur, Texas. Wearing a striped, electric blue silk suit, he said, “When you feel compelled to fight, never think that one person can’t make a difference. One person sparks an idea. Start to work toward solving it. Many will strive to join you.”

But ingenuity alone is not enough. Our electricity regulatory system is in need of widespread reforms to allow the fruits of ingenuity access to the grid.

Fortunately, the Federal Electricity Regulatory Commission is on the move, under the leadership of Chairman Jon Wellinghoff, a lawyer from Nevada with a deep background in renewable energy and ratepayer advocacy. This morning he held a reporter’s roundtable to discuss some of the rules the FERC is implementing to get us on the path to a clean, secure energy future. I first wrote about his vision last November.

Historically, our electricity system was built around central generation to supply demand. Our evolving energy system is much more complex, incorporating myriad components, from variable renewable energy technologies like wind and solar, including very small systems; to storage technologies like batteries, compressed hydro, flywheels, and even dishwashers; to new types of transmission that take power directly from source generation to demand centers without access along the way. Today Wellinghoff spoke about removing regulatory barriers to ensure that all of these resources can get access the grid and play a competitive role in the energy markets.

Implementing change in the electricity sector is no mean feat. By design, it’s inherently conservative because keeping the lights on is paramount. Yet Wellinghoff keeps pushing the FERC inexorably forward, swaddled in happy talk about market competition.

This stuff is arcane, yet critical to creating a sustainable energy future. So if you’re for renewable energy, pay attention!

Transmission: A rule proposed last June would change the way transmission is planned and paid for. Perhaps the most contentious element of that is removing the “right of first refusal.” Historically, utilities have had the right of first refusal (ROFR) to build planned transmission lines that went through their territories. Wellinghoff would revoke that in the interest of market competition, a theme he returns to constantly. Not surprisingly, some utilities are less than thrilled.

Solar and wind are the most widely accepted forms of renewable energy by environmentalists because they lack downsides like destroying river ecosystems (hydro) or cutting forests or diverting food to energy (types of biomass). Still, they have a dramatic weakness when compared with traditional fossil fuel energy source: they are intermittent, or variable. The sun doesn’t always shine, and the wind doesn’t always blow.

Variable energy resources: In a rule proposed last November, FERC would allow transmission providers to charge variable suppliers (like wind and solar farms) for the increased regulation services their forms of generation require to maintain reliable power. Variable suppliers would also be required to give transmission providers meteorological data to help them deliver reliable power. In exchange for these little gifts, FERC would require generators to schedule their transmission at 15-minute intervals, rather than the standard hour, so they can more rapidly respond to variability.

The energy sector is moving to balance this variability in other ways as well, by increasing capacity of energy storage and by getting customers to smooth out demand a bit.

Energy storage: A lot of money and brains are being invested in energy storage technologies right now. But where’s the payoff? Storage operates in a gray zone, providing both supply and demand services as it is used to regulate frequency. Because it doesn’t fall neatly into an existing category, investors can’t receive adequate compensation for their service. A proposed rule on compensation for frequency regulation services was put forth in February this year.

Demand response: Demand response would help stabilize the grid by encouraging energy customers to, say, run their dishwashers late at night when power is less expensive or by improving appliance technologies to allow water heaters, air-conditioners, refrigerators and the like to incrementally regulate their demand. A rule ordered last month will now allow market price payments to people (in regional markets that allow it) for providing this service – when it is cost effective. That is, when it is cheaper to pay individuals rather than traditional balancing services like ramping gas power plants up and down.

Smart grid: The FERC is working with the National Institute of Standards and Technology to standardize the smart grid, with the goal of ensuring seamless function of interstate transmission and electricity markets.

Distributed generation: Last fall the FERC clarified how California can use a feed-in tariff to encourage the development of small-scale, renewable energy generation in a way that does not conflict with federal laws and regulations.

Before the Public Utility Regulatory Policies Act (PURPA) was passed in 1978 as a response to the oil embargo, only utilities could own and operate electric generating plants. PURPA allowed utilities to buy power from independent companies, but only if the cost was less than the rate at which utilities could generate the power. This was called the “avoided cost.” Although part of PURPA’s raison d’être was to incentivize renewable energy, at current prices, few renewable generators are able to compete with new natural gas plants. But now, California (and other states) can measure avoided cost separately for each energy technology, comparing solar apples to apples.

One open question about carbon offsets is how will they be evaluated to ensure carbon is indeed being sequestered. (Courtesy verago79 via Picasa)

Offset quality — ensuring that an offset represents a genuine reduction in greenhouse gases — has been a lightning rod issue in the voluntary market that emerged in the United States over the past decade. The eventual settling upon multiple standards — while somewhat reasonable — has not helped to ease concerns.

Even though some of the standards for evaluating offset quality are stringent, the fact remains that the industry is unregulated, and that is enough to sow seeds of doubt. Exposés about perverse incentives, corruption, and lack of oversight in the international Clean Development Mechanism‘s compliance market has not helped the image of offsets. (The CDM was launched in 2006 under the international Kyoto Protocol as a way for regulated countries to reduce the cost of compliance by buying carbon offsets.)

“They’re just impossible to verify,” said Daphne Wysham, a fellow at the Institute for Policy Studies, an independent think tank based in Washington, D.C. “The problem is that you’re trying to prove a counterfactual. You’re trying to prove that something would not have happened but for this additional revenue stream.”

However, the fact that they were included in the House-passed American Clean Energy and Security Act is a good indication that they will be a part of potential federal legislation. The Waxman-Markey bill, as the legislation is widely known, stipulates that offsets should be verifiable, additional, and permanent.

Special Series: What’s the deal with offsets?Photo illustration by Tom Twigg / GristIn addition to those attributes, quality offsets should also be “real” and “enforceable,” according to Josh Margolis, co-CEO of San Francisco-based CantorCO2e, a broker for the world’s emissions and environmental markets. “Those are [five] small words, but there have been tomes and tomes written on what that means,” he said.

The other key element to achieving quality offsets is for regulators to monitor projects and enforce consequences against those who fail to comply, he said.

But whether a federal program will actually deliver quality is yet to be determined, and not just because the bill hasn’t yet passed the Senate. Michael Wara is a climate scientist and professor at Stanford Law School who has studied and written about offsets and climate policy. “You can say all that in the bill, and it all sounds great, but what really matters are detailed decisions made after [we have a law] by whoever is regulating this system,” he said. “The politics and who sits on the decision-making body and where their interests lie really matter.”

Current offset providers wonder whether voluntary and compliance markets would use the same standard.

“In the European market, there’s a set of standards applied to the voluntary market and a different standard for the compliance market,” said Erik Blachford, CEO of Terrapass, an offset provider. “I think that’s less likely to happen in the United States. I would guess there’s going to be convergence between the voluntary and compliance markets against a single standard.”

Offset provider Native Energy plans to comply with a federal regulatory standard for offsets that it would sell under the compliance market. But because the company believes that existing voluntary standards may be more stringent, it plans to continue offering offsets under those certifications to discerning clients. Terrapass’ Blachford said he would consider doing the same thing.

For the voluntary market, “the wise way to proceed would be to allow the kind of innovation that has occurred to continue to occur, and to create a business environment in which the kinds of co-benefits that some projects bring could be assessed and valued,” said Tom Rawls, spokesman for Native Energy.

But Stanford’s Wara doubts that offset providers will actually hew to a stricter certification once federal law creates a standard. Because the voluntary market is “essentially buyer beware,” companies spend a lot of energy, money, and time trying to ensure that their offsets are defensible, he said. “But once you get into a compliance-grade situation, all that matters is that USDA or EPA blesses the offset,” he said.

For evidence, he points to the international CDM. “You don’t see offset companies pushing for stricter standards. You see them complaining that the system is inefficient, leads to delays, and needs to be streamlined.”

As the world’s first attempt at a regulated offset market, the CDM is serving as an example to U.S. regulators, mostly in what not to do.

Reports from Wara and colleagues at Stanford and environmental activist organizations like Forests & the European Union Research Network (FERN) and International Rivers have highlighted some of the CDM’s failures: awards for projects already in progress; falsification of audit reports; manipulation of data upon which companies base credit claims. There are calls to reform or replace the CDM in the renegotiation of the Kyoto Protocol, the first phase of which ends in 2012.

Terrapass’ Blachford is willing to cut the CDM some slack. “Brand new things that are put together to tackle enormous problems take time to get right,” he said. “It’s like people looking at a Sony Walkman and wishing it were an iPod. You know, guys, progress takes time.”

Jake Schmidt is international climate policy director at Natural Resources Defense Council, which worked on the Waxman-Markey legislation as a member of the Climate Action Partnership, a coalition of business and environmental groups. He said there are indications that offsets under Waxman-Markey would be better than under the CDM.

“The Offsets Integrity Advisory Board and the final rules are established in a very different legal and political context than in the CDM,” he said. “The CDM has a 180 plus-country negotiation process with no Court of Appeals, no Supreme Court, and no agency overseeing the whole thing that has a single responsibility to protect the environment.” The U.S. legal structure will allow us to challenge bad rules and projects, he said.

Also, Waxman-Markey would allow for random audits of projects and has a mandated program review. “The CDM has some semblance of a random audit function now, but it didn’t at the beginning,” said Schmidt.

One particular challenge will be to effectively evaluate agriculture and forestry projects, which would be a much larger part of the offset market than they are currently.

Land use, land use change, and forestry (LULUCF) offset projects have long been sneered at because it is difficult to ensure that the carbon will be stored forever, a quality called permanence. Credits are issued based upon the amount of carbon stored in plants and soil. But that storage could be lost, or “reversed,” if, say, the trees burned or were infested with insects. LULUCF projects were excluded from the Kyoto Protocol for that reason and because activists feared they would give polluters an excuse to not clean up.

But now, new strategies are emerging to address risk to permanence. These include temporary credits, which expire and must be replaced with new credits; legal guarantees regarding management of the land; financial insurance to cover reversals; and buffer pools, which require that a portion of earned offsets be set aside in a shared pool to mitigate reversals.

Max Williamson is an environmental lawyer at Washington, D.C., law firm Andrews Kurth. He has lobbied legislators on behalf of the Carbon Offsets Providers Coalition, a group of offset providers, marketers, generators, and financiers. “Temporary credits are a new addition to the Waxman-Markey bill, which we are evaluating but at this time do not believe is necessary,” he said. “The other mechanisms for addressing the possibility of reversals are all legitimate policy options.”

Terrapass’ Blachford is also cautiously optimistic. “For quite a few years we didn’t see anything in the forestry world that met our basic philosophical approach to quality,” he said. “But now people are starting to do the appropriate thing with things like buffer pools, using those as an active insurance against natural disasters.” While Terrapass doesn’t yet have any forestry projects, it is now considering them.

But in spite of such advances in regulation, there are still plenty of concerns about whether offsets will be of high enough quality to actually reduce emissions.

“The hard part is that everyone recognizes there is an inverse relationship between quality and quantity,” said Stanford’s Wara. “But the political deal at the heart of this bill is dependent upon there being a lot of offsets. So there’s going to be a lot of political push to make sure that there are.”

Special Series: What’s the deal with offsets?Photo illustration by Tom Twigg / Grist

That’s because Waxman-Markey, as the House bill is known, excludes all forms of energy production, including renewable sources, from the huge carbon offset program it would create.

“Since fossil fuels used to make electricity are capped, there is an automatic ‘credit’ from purchasing renewable energy due to the need to hold fewer allowances,” said David Hawkins, director of the Natural Resource Defense Council’s climate center. “Creating an offset credit for those renewable kilowatt hours would be double counting.”

Aside from the carbon price, which would help to level the playing field for clean energy, as Hawkins noted, other mechanisms will also drive renewable energy development, including the renewable electricity standard, which specifies that the United States should get 20 percent of its electricity from renewable sources or energy efficiency by 2020; CAFE standards that regulate auto emissions; and already-approved federal stimulus money for research and development.

But the prospect of agricultural and forestry offsets presented an irresistible opportunity for Big Ag, and just days before the House passed Waxman-Markey on June 26, the House Agriculture Committee, led by Rep. Collin Peterson (D-Minn.) and supported by Agriculture Secretary Tom Vilsack, won some key victories for their constituency that critics argue would impede the country’s ability to actually reduce greenhouse gas emissions.

One of the reasons corn ethanol and, to a lesser extent, soy biodiesel, have fallen out of favor in many circles is because of the international leakage issue. When American farmland is turned over to growing crops for biofuel production, that reduces food availability on the international market, pushing prices higher. People in developing countries can’t afford corn and soy at these prices, so they cut down rainforests to increase local supplies. When the resulting loss of carbon sequestration from deforestation is calculated, biofuels typically do not show a net reduction in CO2 emissions over fossil fuels.

Many people in agriculture regard biofuels as an economic godsend that can help save struggling farms (witness the huge boom in biofuel production in the first half of this decade as oil prices reached historic highs). And they have been dismayed by carbon accounting reports that have shown their product to have an about equal warming effect as fossil fuels, information that led California to exclude corn ethanol from its renewable energy fuel standard.

Rep. Collin Peterson used his position as chairman of the House Agriculture Committee to win key concessions for farm interests in the Waxman-Markey climate and energy bill.Courtesy AFLCIO2008 via FlickrPeterson and the House Agriculture Committee won a concession that international leakage won’t be calculated as part of American biofuels’ carbon footprint for five years, making it appear more desirable on paper. At that point, there will be an evaluation, but the USDA will have veto power over any decision to count leakage.

Environmentalists argue that there is no point to growing biofuels if there is no net climate benefit, and increased water consumption and fertilizer runoff associated with these crops could make them an environmental net negative.

Profit motives seem a clear driver for the leakage exemption. But it is also partly explained by farmer culture, which is generally more alarmed by the issue of energy security than climate change, said Bob Stallman, president of the American Farm Bureau Federation.

Awarding the USDA oversight of offsets, rather than the EPA, was another big win for the Agriculture Committee. Many environmentalists say the EPA would be better at oversight because its mandate is to protect the environment, whereas the USDA’s is to look out for agricultural interests.

But Stallman said such criticisms show “a huge lack of understanding about what the overall role of USDA is. Yes, production agriculture is a part of its portfolio, but certainly not its priority.”

In addition, the USDA currently runs a variety of conservation programs, he said. “They are required to do oversight. They are required to set up the regulations; they are required to handle compliance. And they have a network of over 2,000 local offices across this country that do that. EPA doesn’t begin to have that kind of network.”

Specifically, Stallman believes USDA is better equipped to oversee a LULUCF-focused carbon offset program than the EPA because it already staffs soil scientists, plant biologists, and agronomists, the people who will calculate to what degree carbon is being sequestered or not emitted based upon any given practice.

Michael Wara of Stanford Law School, however, said he is afraid that the USDA would follow the lead of voluntary offset markets such as the Chicago Climate Exchange (CCX) and the U.S. Department of Energy’s Voluntary Reporting of Greenhouse Gases program, which don’t do on-site monitoring or use third-party verifiers but rather estimate carbon uptake based on soil type, climate zone, and other factors.

Furthermore, deciding what makes a quality offset involves a lot of subjective decisions, Wara said. “Agency discretion is fairly broad, and a number of choices are defensible.”

For example, reducing the use of fertilizer would likely qualify as an agricultural offset. Fertilizer is released from soils into the atmosphere in the form of nitrous oxide, a potent greenhouse gas, and the production of synthetic fertilizer is carbon intensive. However, over-fertilization of fields in the United States is already declining as a result of other policies the USDA has implemented and the rising cost of fertilizer. So how do certifiers take into account the likelihood that fertilizer use would have continued to fall, even without an offset program?

“That’s going to be a very subjective question,” said Wara. “How fast would it have fallen? Would it have leveled off? The USDA faces political pressure from its constituency, which is used to subsidies that are considered to be more like entitlements. So the whole concept that practices change and you might not be entitled to the same level of crediting is not one that’s going to be very popular or familiar to farmers.”

Stallman said he expects to see offsets’ validity reviewed regularly as natural part of the process, negating the need for a periodic, formal review. As an example, he points to no-till farming offsets currently traded on the Chicago Climate Exchange. These offsets are temporary, not permanent. Farmers usually sign a contract for five years, a period during which they agree to implement certain practices. Scientists then calculate a carbon credit for that time frame.

“At the end of five years, there’s nothing to say that there would be another contract available just like that,” said Stallman. “Maybe the USDA would come in and say, given technological changes and other developments that are occurring, the amount of carbon you’re going to reduce by using that practice is a new number.”

While he admits that calculating business as usual versus additionality for offsets can be tricky, Stallman expressed faith in the system. “I would support anything that ultimately qualifies as an offset. My assumption is there’s not going to be an offset granted unless the additionality requirement is met.”

The Offsets Integrity Advisory Board that would be created under Waxman-Markey could be a venue in which to review such issues, according to Daphne Wysham, a fellow at the Institute for Policy Studies, an independent think thank in Washington, D.C. But her optimism is tempered.

“The question is, once you’ve got all these interest groups in place, how easy is it to make these changes politically?” The USDA overseeing these offsets “is like the fox guarding the henhouse,” she said.

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Below, watch Bob Stallman’s testimony before the Senate environment committee on climate legislation and the agriculture sector. (Read a related Grist story.)

America’s first major stab at tackling global climate change comes in the form of the American Clean Energy Security Act, a massive piece of legislation that would touch nearly every corner of the U.S. economy.

The bill, often referred to as “Waxman-Markey” after its principal sponsors in the House of Representatives, contains provisions for clean energy technology, energy efficiency, green building codes, green jobs, and adaptation measures to help ease people into a new world order. But its most talked about feature is the regulation arm, “cap and trade”: limit pollution to a finite amount, lower the allowable amount each year, and let polluters trade pollution permits to create market incentives for businesses to reduce emissions as cheaply as possible.

Modeled, in part, on the federal program created in the early 1990s to combat acid rain, the Waxman-Markey trading scheme would create a mandatory (or compliance) market in greenhouse gas emission credits for businesses regulated under the cap. Credits would be measured in carbon dioxide equivalent (CO2e), where each type of greenhouse gas is converted to its equivalent in CO2, the most common greenhouse gas. Hence the term “carbon markets.”

But here’s the rub: Waxman-Markey does not propose a pure cap-and-trade scheme. It’s actually cap and trade and offset. Offsets, put simply, would let polluters pump more carbon dioxide into the atmosphere than they would be permitted under the “cap” part of the program. Companies would earn that right by investing in projects in the United States or in other countries that reduce the amount of carbon dioxide being emitted into the atmosphere.

Supporters, including regulated industries, agribusiness, and some environmentalists, say offsets would control the cost of pollution permits, helping the country transition to a low-carbon economy without jolting price increases for energy. One factor that influenced the inclusion of offsets in Waxman-Markey was a June 23 EPA analysis (PDF), which found that without international offsets, the cost of permits, also called allowances, would be 89 percent higher.

Still, critics charge that offsets as envisioned by Waxman-Markey would defeat the overriding goal of cutting emissions. That’s because ensuring the quality of offsets — i.e. that greenhouse gas reductions are actually happening — has proven to be a tall order.

Offsets are hardly a new phenomenon. A robust voluntary market emerged internationally and in the United States during the past decade as businesses raced to flaunt their sustainable bona fides. Several major rental car companies give drivers the option of buying offsets. Online retailer Destination Lighting touts its purchase of offsets as a selling point. Pacific Gas and Electric, a huge utility in California, announced in July that it is offsetting some of its carbon emissions by supporting The Conservation Fund’s forestry projects; money for the offsets comes from customers who opt to pay extra each month. Dell, the personal computer manufacturer, is a large purchaser of offsets, as is search-engine giant Google.

Inevitably, the offsets trend prompted a backlash: questions about methodology and merit, comparisons to sin indulgences, nicknames like “rip-offsets” (thanks, Joe Romm!), and parodies like Cheat Neutral. In August 2008 the Government Accountability Office lent a stamp of authenticity to these concerns by issuing a report that outlined the challenges associated with the voluntary market for offsets. And on August 3, the Congressional Budget Office issued a report (PDF) that, while concluding offsets under the Waxman-Markey bill would likely reduce compliance costs and cut carbon emissions, conceded that a lot depends on the design of the program and how offsets are certified.

If regulated companies are allowed to buy offsets as an alternative to reducing their own emissions or buying extra allowances under the cap, and if those offsets aren’t actually reducing pollution, then we would be merely running a “shell game,” not tackling climate change, said Daphne Wysham, a fellow at the Institute for Policy Studies, an independent think tank based in Washington, D.C.

In spite of these concerns, lobbyists for offsets struck it big with Waxman-Markey: The bill, which was narrowly passed by the House on June 26, would authorize up to 2 billion tons annually until 2050. In 2007, 2 billion tons would have been about 29 percent of total U.S. greenhouse gas emissions, according to the EPA’s 2009 U.S. Greenhouse Gas Inventory Report. This is a massive increase over the 10.2 million tons traded in the United States in 2007, according to the August 2008 GAO report.

“Enormous numbers of offsets defer to a later day the time at which [entities under the cap] will have to change their behavior,” said Michael Wara, a climate scientist and professor at Stanford Law School who has studied and written about offsets. “If you look at the EPA analysis of [Waxman-Markey], there will not be a change in the amount of electricity coming from coal until 2020 or 2030. My own analysis shows that emissions under the cap will not have to fall until 2030.”

But the outcome pleased Max Williamson, a lawyer at Andrews Kurth law firm in Washington, D.C., who lobbied legislators on behalf of the Carbon Offsets Providers Coalition, a group of offset providers, marketers, generators, and financiers. “We applaud Mr. Waxman and Mr. Markey for recognizing that offsets are an important cost-containment mechanism,” said Williamson.

Some critics stress that offsets are not the only or best way to control costs under a cap-and-trade scheme. Wara would prefer a “safety valve” that would allow regulated businesses to buy unlimited allowances to pollute if the price of carbon rose to a predetermined level. The underlying premise is similar to the strategy behind the inclusion of a large number of offsets in Waxman-Markey: adding supply reduces demand, thereby keeping costs down.

But with a safety valve, the government could use the money raised by selling excess allowances to buy and retire offsets. “What that does is disconnect the cost-control [mechanism from] emission-reduction activities outside the cap, thereby improving the incentives to fund only the higher quality projects,” Wara said.

Bill Burtis of Clean Air Cool Planet would prefer to control costs using a “price collar” that sets both a ceiling and a floor. The collar would be set at some percent below and above market cost, so as the market rate goes up or down, the collar moves with it.

“Basically the idea is that, particularly for businesses and others who might be impacted by these costs, they can see what the potential range will be and plan accordingly,” Burtis said.

As for the Institute for Policy Studies’ Wysham, she would like to see a straightforward carbon tax. “While prices would rise in some sectors, they would decrease in others, creating a shift in subsidies,” she said. “So you would not only have stick, you’d also have a carrot for clean energy, public transportation, alternative vehicles.” Because she believes that it is impossible to verify that offsets are reducing greenhouse gas emissions, “my personal perspective is that offsets are a dangerous distraction from real action,” she said.

In spite of these arguments, “the political reality has been that offsets are what we’re using,” said Stanford’s Wara. That reality has been created in part by the voluntary offset market, which has worked to make legislators and the general public alike more familiar with its product over the last few years.

“Current offset companies exist because of the prospect of something like this system,” said Wara. “Companies that do voluntary offsets in the U.S. right now are basically laying down markers on what are going to be very valuable compliance-grade offset projects in the future.”

Existing offset providers would likely sell to both the voluntary and compliance markets. That’s because, although approximately 85 percent of the U.S. economy would be under the cap as defined by Waxman-Markey, the market for voluntary offsets will continue, said Josh Margolis, co-CEO of San Francisco-based CantorCO2e, a broker for the world’s emissions and environmental markets.

Individual consumers will still want to neutralize their impact on the climate, and shareholders and stockholders of companies without a compliance requirement will recognize liabilities associated with the carbon emitted in manufacturing and selling products, he said. Insurance companies may also want offsets as a hedge against the carbon consequences of business operations.

But Clean Air Cool Planet’s Burtis believes the voluntary market will decrease over time. “The role that plays is certainly reduced once you’ve got a cap on carbon and people are paying for it,” he said. “The farther upstream that cap is in place, the more [everyone is], in effect, regulated.” For example, oil producers will be paying for carbon emissions, as will gasoline refineries. “Do I feel a need any longer to purchase an offset for my automobile?” Burtis asked.

Of course, none of this has been enacted, as the Senate must still produce its own climate bill. Nevertheless, if Congress passes a final bill this year, offsets will likely be included — and the compromises  made along the way will undoubtedly satisfy very few.

It’s all yours.iStock

I’d thought that I’d feel virtuous and free — and I do — but it’s turned out to be a bit more complicated than that.

Never too attached to my particular car, I considered it transportation, not a reflection of who I am. My job as an environmental reporter has taught me about the hazards of car ownership, from pollution and materials waste to sprawling, disconnected communities to oil politics — even obesity. Yet in spite of living for 14 years in San Francisco, a compact city with good public transit, I’d held onto my car.

In fact, I did walk and bus many places. Plus the city has two car-share businesses, one with a lot around the corner from my house. Why did I need a car? I am the target market for these companies, yet the notion of selling my car still generated paranoia of being trapped in a lawless city after an apocalyptic event.

Finally, I realized that my 1997 Saturn SL2 wasn’t getting any younger; it would be best to cut ties before it really cost me money. I considered buying another, but a quick look at used prices put me off that idea.

Doing the math — insurance, registration, gas, maintenance, depreciation — I was surprised to find that I would likely come out ahead by busing and car sharing. My plan to rent out my parking space was gravy. I joined the car-share company on trial and borrowed a car once to see how it worked. It was easy and kind of fun. Yet despite all this progress, I still resisted putting my car up for sale until my insurance came due again.

Because suddenly, instead of a rattletrap responsibility, my car felt like a security blanket. It could take me wherever I wanted to go, whenever I wanted! My depth of feeling for this vehicle, which I’d never really liked and sometimes felt guilty for using, caught me off guard. In spite of my values, I clearly wasn’t immune to the way cars are embedded into our infrastructure and culture.

Finally, the time came. The morning of the sale, I drove to meet the buyer. On this, our last trip together, I looked around the car’s interior and considered it with new eyes. Cleaner than usual, it felt cozy, almost homey. I thought to it, “Say goodbye to the neighborhood,” simultaneously feeling verklempt and a bit ridiculous.

After the sale, I walked past where I’d last seen the car and instinctively veered to reunite with it. Laughing, I ruminated over my expected savings and the maintenance hassles I’d avoid, feeling a real sense of liberation.

In the weeks that I’ve been car-free, the story of Why I Sold My Car, And How I Will Travel Now has been a subject of intense interest from family, friends, neighbors, insurance agents. As I am one who enjoys challenging assumptions, these talks have been mostly fun.

Still, living differently has a learning curve. Frustration hit when I encountered a line at a car rental company (used for longer trips) and when I researched a bus route improperly and ended up late. But other lessons have been exciting, like when I realized a bus a block from the house takes me directly to three popular neighborhoods across the city.

I’m saving money, getting exercise by walking, and becoming more familiar with my city on the street level. If that’s subversive, I’m for it.

Waiting to depart from Beijing.

Photos: Erica Gies

Shortly after 9 p.m. one warm night last fall, my travel companion and I raced through the sprawling West Beijing train station, weaving our way through a crush of humanity sitting on newspapers and bits of cardboard, eating cups of noodles while waiting for their own journeys. Winded, we boarded our soft sleeper car on Train 27 and made our way to our compartment — only to find it overflowing with Chinese passengers. As it was impossible for us to enter, we strained around them to peek in, and saw that they had strewn their belongings over all four beds and into every storage space.

We soon realized that only two were actually riding the train: a woman fresh out of ankle surgery with prominent staples in her bare, blue-black foot, and her daughter, host to a nasty respiratory infection that would become my partner’s and my new companion for the rest of the trip and beyond. The others were tearful relatives who could not bear to say goodbye until just before the train started rolling.

Passengers eye the scenery.

Photo: Michael McCrystal

Ever since the $4.2 billion railway began operating in July 2006, 4,000 passengers a day have taken advantage of the chance to visit — or work in — Tibet. It may be part of the same country, but it’s a world away to most people. While traveling in China, I had noticed an invariable reaction when I told people I planned to ride the train: A dreamy, almost nostalgic look crept into their eyes. “I want to go to Tibet,” they would say, with wistful longing. Maybe they appreciated Tibet’s heritage and its comparatively clean environment. Perhaps some yearned for economic opportunity. Now, thanks to the train, they can more easily and cheaply see the area firsthand — a development that is both a blessing and a curse.

Although I knew the new train was controversial in some circles due to cultural and environmental concerns, I wanted to ride it myself in an attempt to learn more about the gravity of those issues. For me, like so many people, Tibet had long loomed mythical as an isolated place where the culture has remained relatively pure. Rolling into it over a couple of days seemed preferable to dropping in suddenly via plane. One approaches what is mysterious by degrees.

Nearer My Sod to Thee

Once the relatives were on their unmerry way and our two suitemates realized they’d be seeing a lot of us over the next two days, they smiled, made space, and offered us heaps of packaged sausage, smoked fish, the ubiquitous cups of noodles, oranges, and my favorite, mahogany-colored nuts shaped like handlebar mustaches.

The train itself was clean and new, with bedside TVs in our $158 class (hard sleepers are six-person cabins for $102; $49 buys a hard seat) and large windows to appreciate the view. Although the carpet was showing signs of wear after two short months of operation and our car received little attention during the trip — leaving the bathrooms splashed with noodle soup, green tea remnants, and worse — the trip was generally smooth.

What, you’ve never used an oxygen outlet?

The railway, a great ambition of Chinese leaders since the “liberation” of Tibet in 1950, is a feat of engineering any country would crow about. It cruises the highest elevations of any track in the world, offering a chance to meditate on the sweeping, wildlife-dotted grasslands of the massive Tibetan Plateau, with an average elevation of more than 13,000 feet. It ambles through the rugged, 16,640-foot Tanggula Mountain Pass, forcing passengers who aren’t taking an altitude-sickness medication to grasp for the breathing tubes and oxygen distributed by train personnel, as bags of chips and toiletry bottles explode.

Altitude is not the only thing that makes this railway stand apart. Its construction and operation have been hailed by China as a model of environmental consciousness. Many in Tibet, however, fearful of the impacts of tourism and industry on their relatively pristine region, see it as just the opposite.

At a ceremony held at the Golmud, Qinghai, Railway Station to inaugurate the line, President Hu Jintao emphasized the importance of protecting the environment of the Qinghai-Tibet Plateau. He said railway workers and passengers should “consciously treasure waters and mountains as well as grass and woods on the plateau, and they should help conserve the ecosystem and environment along the railway.”

The majestic mountain view.

There’s plenty to conserve. The railway traverses two nature reserves and runs alongside several more. These parks are home to the endangered Tibetan antelope, gazelles, wild asses, black-necked cranes, snow leopards, white-lipped deer, Siberian tigers, blue sheep, and endemic plants. By most accounts the Chinese government did everything it could to mitigate the effect of construction on these species and their surroundings. A 2003 report by U.S. Embassy workers, for instance, relates a story of bosses halting work on the line for four days to ease antelope migration, even removing marker flags so their flapping wouldn’t scare the skittish beasts.

Today, China is so proud of the $192 million it spent on mitigation, including 33 wildlife migration corridors, that it touts these achievements in regular announcements in Chinese and English during the course of the train journey.

The government also boasts that engineers tackled the vexing problem of building on unstable permafrost by using solar energy to circulate liquid nitrogen and cold nitrogen gas through underground pipes, thus keeping the ground safely frozen. Workers are said to have removed virgin grassland sod from the right of way and tended it lovingly for a year before replanting it on the new line’s embankments. And the Chinese are so concerned with train-related garbage that they have installed special waste- and sewage-collecting devices within the train, and run a separate garbage train behind to pick up the trash from collection stations. The waste is then taken back to Golmud for treatment.

But all is not as green as it seems. Tibetan nomads tell tales of track being laid through the middle of fertile farmland and grazing land, destroying and damaging it, and claim the compensation they were paid was not enough to sustain the loss to their livelihoods. The solar-powered permafrost freeze hasn’t kept the land from shifting, and cracks have been reported in the concrete structures, railway ministry spokesperson Wang Yongping told the Beijing News. Embassy officials saw no evidence of rolling up or transplanting the turf. In fact, the report said because the native grass grows in clumps, this task would be nearly impossible, as would be reseeding. However, it did conclude that the swath of tundra disturbed by construction was quite narrow.

In spite of the railway’s best efforts, I did see a small trail of trash along the rails for much of the journey, which I ascribed to the workers, since the train was sealed due to the altitude. The embassy report highlighted this problem too, stating that there was considerable garbage, human waste, oil drums, and abandoned vehicles at shantytowns that sprung up along the work sites, a situation to which a local NGO called Greenriver has worked to draw attention.

As we skimmed along the tracks, I began thinking that the biggest problem facing this railroad may be beyond any one country’s control. Indeed, if global warming continues its current trajectory, according to a climatologist quoted in China Daily, the melting permafrost will prevent the railway from operating safely by 2050.

Next Stop, Lhasa

By most Tibetan and long-term expatriate accounts, it’s not the train per se that will have the most environmental or cultural impact. Rather, it’s what the train conveys.

Painted rocks at Ganden Monastery.

Since July, the train has brought thousands of people into Lhasa’s Liwu station every day, most of them Han Chinese. When I detrained at the brand-new station after two days aboard, it was instantly clear to me that China has great plans for rail in Tibet. The station is immense — far bigger than is possibly required for current needs. It is architecturally grand in a way that makes a bold statement to a people who have spent centuries commuting behind their yaks.

In fact, the Chinese have already laid track beyond Lhasa. A source in town said a line to Sikkim, India, about 200 miles away, is already in place. Chinese TV has broadcast plans for the line to go to Xigaze (which Tibetans call Shigatse) within three years. There are further plans to lay track to Nyingchi and then to Dali within the decade, and also to connect Shigatse and Yadong, near the China-India border.

Even before the train went through, tourism to the Tibetan Plateau had swelled to 1.22 million in 2004, up from a mere 1,059 in 1980. In that year, 95 percent of visitors came from abroad. In 2004, 92 percent were domestic tourists, according to Phayul, a newspaper based in Nepal.

As the Chinese economy continues to grow, the middle class is expanding, allowing more citizens to travel for leisure. Until recently, it has been difficult to travel abroad. Tibet has proved a good alternative because it is one of the most exotic places in China and, as one person told me, there is a certain nostalgia for the simple life that many Tibetans still have — a life that many Chinese people had just 10 years ago.

Potala Palace, a sign of the changing times.

My first morning in Lhasa, I got a clearer look at how things are changing in that city of 260,000 when I climbed the 13-story Potala Palace (once monastery, now museum, if that is any indication). While the Chinese census of 2000 says that Lhasa is 81.6 percent Tibetan, Tibetans estimate the demographics are closer to 50-50. From the palace’s top floors, I could see that the city is neatly divided into the new section of town, which looks like any other modern Chinese city, and the old Tibetan part of town, which appeared to be on fire, so vast were the great wafts of smoke rising from incense pots burning juniper throughout the public squares and temples.

Throughout the region, Chinese flags fly from Buddhist temples, and armed police add ominous undertones to houses of worship. Locals say the new 13-story police station in Lhasa was built to rival the Potala Palace. It is illegal for anyone, including tourists, to carry a photo of the Dalai Lama. Tibet is a place where people are afraid to speak on many subjects unless they know they are completely alone with their listener.

Detail of Lhasa’s Jokhang Temple.

Still, because Chinese influence has been minimal in areas of Tibet away from roads and rails, the culture has remained largely intact. Religion imbues life everywhere you look. One rainy morning, I awoke to the sound of chanting monks twirling prayer wheels outside my hotel window on one of the twisted, cobbled streets of old Lhasa. Colorful prayer flags said to represent sky, water, fire, wind, and earth adorned bridges and mountains.

As the flags’ symbolism indicates, Tibetan Buddhism has a holy reverence for nature derived from its roots in the area’s original animist and shamanist Bon religion. The Tibetan government in exile — holed up in Dharamsala, India — explains that Tibetans have been good stewards of the environment because they believe all living beings are sacred.

“Tibetan Buddhist scriptures explain that the Earth is the noe (container) and all the things on this Earth — biotic and abiotic elements — [are] the chue (contents),” writes Tsultrim Palden Dekhang on the government-in-exile’s website. “Thus if the container is broken and destroyed, it cannot contain the contents; similarly is the case with our Mother Earth, which is the container sustaining the lives of countless living creatures including the lives of human beings.”

A woman with a prayer wheel eyes a police officer in an alley of old Lhasa.

Chinese officials do seem to recognize that many tourists, Western and Han Chinese alike, come to Tibet for both the culture and the unspoiled environment. They have, for instance, set aside one-third of the Tibet Autonomous Region — an ostensibly self-ruled area that encompasses the entire Chinese province of Tibet but only about half of historical Tibet — as parks. And Tibet is valued as the principle source of 10 of Asia’s legendary rivers, including the Yangtze, Yellow, and Mekong, which supply billions of people with water, energy, and food. The government of Tibet in exile estimates these rivers sustain the lives of 47 percent of the world’s, and 85 percent of Asia’s, population.

Still, many — including the group Greenriver — worry about the environmental impact of the immense swell in tourism, and the role of the train in further increasing that. Adding to the concern, there is some question as to whether protections currently in place will stand when opportunity for profit presents itself. Tibetans and expatriates alike fear that Chinese officials have set their sights on Tibet’s mineral resources, which include coal, iron, jade, and copper — plenty of things worth digging for.

A Land of Riches

From 1995 to 2004, China grew at an average of 9.1 percent annually, according to the World Bank. By comparison, the U.S. economy averaged 3.3 percent annual growth during the same period. Every year, 13 million people — equivalent to the populations of New York, L.A., and Dallas combined — move from the countryside to China’s already packed cities, leaving behind lives of subsistence agriculture to join the global industrial economy. The country currently gets 75 percent of its energy from coal, but to continue feeding this phenomenal growth, it is strategically looking to increase its access to every type of energy source: coal, oil, natural gas, and renewables.

And Tibet may hold at least part of the solution.

One geographic survey on the Tibetan Plateau found the area rich in oil resources, with potential reserves estimated at more than 10 billion tons, Zhang Hongtao, deputy director of the China Geological Survey Bureau, told the Xinhua News Agency in December 2005. For a country that some predict will be consuming 330 million to 350 million tons of oil by 2010, that could prove irresistible. The survey also found large iron-rich ore deposits, with a potential reserve of more than 50 million tons each, and the news agency Interfax-China estimates that the TAR could be the largest mineral resource in the country, with a potential value of more than $128 billion. All told, the region holds more than 100 minerals at more than 2,000 potential mining sites. Less than 1 percent of discovered mines have been prospected thus far.

So why aren’t Chinese companies extracting already? They are, to a point, but people I spoke with in Tibet said the infrastructure is still not really adequate for large-scale projects. The train is one step to exporting materials back to China’s big cities, but Tibet is vast — more than twice the size of Texas — and the minerals are frequently in obscure locales. More rail and roads would need to be built before Tibet would look like the rest of China. Still, the new rail lines and the web planned across the region are seen as critical steps to opening up Tibet’s virgin territory to China’s industrial might.

Tenzin Choephel, a reporter for Phayul, interviewed some recent Tibetan refugees — newly free to speak their minds — to get their opinions about the train. “Large numbers of poor Chinese would come to Tibet and the railway would transport mineral ores from different parts of Tibet even though the government says it is for carrying passengers,” said Yeshi Damdul from Tölung Dechen County.

Tsering Dhondhup from Damshung County said, “Locals don’t have any right to say anything and no one dares to speak, they blast lots of dynamite and it was harmful to people because it destroyed nomadic grasslands.” Dhondhup continued, “Mining is done beyond limit and it would continue in the future also because the railway track is also purposely made near mining areas … when the railway comes, many Chinese would come and we would lose all our land.”

While environmental protection reportedly accounts for more than 30 percent of the total cost of Chinese mining projects in Tibet, a higher level than in other regions of the country, it may not be enough. And China’s not the only country with an eye on Tibet’s riches. Western companies have also begun exploration and have acquired rights to sites, sparking protests from activists and an appeal to reconsider from the Dalai Lama himself.

Witness to Change

While Tibetans do what little they can to protect their land and traditions, the new Han Chinese Communist Party Secretary of the TAR, Zhang Qingli — who has a reputation as a hardliner — is running a “patriotic education campaign” that was first implemented in monasteries but is being expanded to the general public. It forces Tibetans to agree that Tibet is historically part of China and to denounce the Dalai Lama, among other key points. Resentment expressed by monks and nuns has resulted in detentions, expulsions, and an apparent suicide, according to the U.S. Congressional Executive Commission on China. “Those who do not love their country are not qualified to be human beings,” Zhang said in an interview with Der Spiegel.

But by definition, Tibetans’ necessarily subtle rebellion and whole-being expression of their culture is fundamentally human — and poignant.

One night during my visit I stumbled into a neighborhood restaurant in Lhasa. As I was the only non-Tibetan there, those inside looked up, surprised. But then everyone smiled warmly and the proprietor served me spicy tsampa soup — noodles made of barley, the only grain that will grow at 14,000 feet. As I began slurping and wiping my nose, the locals went back to laughing, drinking (occasionally raising a glass to me), and cheering and jeering a TV program I can only characterize as “Tibetan Idol.”

Pilgrims stroll the Barkhor.

The next day, I climbed to the roof of the Jokhang Temple, the holiest site in Tibetan Buddhism, situated in the center of an area known as the Barkhor. My rooftop perch offered some perspective on the endless merry-go-round of pilgrims, tourists, and supplicants circumambulating the temple clockwise, as required by custom.

Across the big square fronting the temple, I saw five Chinese police chasing a small posse of Tibetans through the crowd. Down an alley, a group of Khampas — hardy cowboys from eastern Tibet with long, braided hair wound around their heads and studded with large, mock turquoise and coral stones — crowded around a dealer in metal horse gear, seeming worlds away from thoughts of the new iron horse in their land. Nomadic pilgrims took a break from their prostrations to sit at the foot of an immense incense pot, snacking upon dried yak. And beyond the color and chaos and noise and scents and beyond the pole strung with prayer flags, the mountains leaned against the confrontationally blue sky, witness to Tibet’s past, present, and future.

Taking a vacation to the other side of the planet is the ultimate luxury, but it’s one laced with guilt. On top of developed-country remorse, a new form of shame is beginning to stalk those of us taking “unnecessary” airplane rides: What about all that carbon dioxide spewing into the friendly but beleaguered skies? That’s where the nascent carbon-offset market comes in, allowing individuals and companies to compensate for their emissions by investing in projects that reduce carbon in the atmosphere.

Whether you’re flying across the world …

Photos: iStockphoto

When I returned from a trip to India last January, I resolved to buy offsets, and promptly hopped on Google. There was no shortage of organizations lining up to take my money, although quite a few wanted euros or other foreign currencies. However, even those dealing in dollars quickly left me flummoxed, because they calculated my flight at dramatically different costs. Sure, I’d love to pay $12 rather than $92, but would I be cheating the environment? Where do they get these figures? And then there was the profusion of projects I could help fund: wind energy, traffic remediation, tree planting. As if that weren’t enough, I found many a watchdog site dedicated to explaining why certain projects were No Good. Your intrepid reporter was overwhelmed, gave up, and attempted to squelch the guilt with a region-related (but non-climatic) donation to Pakistan earthquake relief.

… or driving across town, buying offsets can lighten your impact.

But a few months later, with another trip looming, I resolved to get to the bottom of the offset riddle. I was somewhat comforted to learn from expert after expert that the offset market really is an incredibly complex beast. Perhaps Eric Carlson, executive director of Carbonfund, said it best: “There’s no definition of what a carbon offset is. It’s a little bit of a Wild West out there. Is this thing real? Is it good?”

Many vocal people would answer no to both questions, arguing that offsets are just a way for polluters to ease their guilt. “Carbon trading leads to privatization of the atmosphere,” Jutta Kill of Forests and the European Union Resource Network told Z Magazine last year. “Those who have caused this terrible problem are now supposed to save us from it while continuing to pollute and making a lot of money.” Critics argue that both industry and individuals should change their habits instead of relying on retail therapy.

But others — some of whom work at the carbon-offset companies and nonprofits described below — believe public education is key to reducing CO2 output and say the offset market can play a role in that. They say individuals can pursue a combination of lifestyle changes: reduce the miles they drive or fly, purchase or lease vehicles with the highest fuel efficiency on the market, carpool or take public transit, use conference calls and electronic communications, install efficient appliances, and improve home heating and cooling efficiency. Then they can buy offsets for the rest, joining entities from Pearl Jam to the Goldman Environmental Prize that are going carbon neutral.

Into the Wild

Carbon trading is carefully regulated in developed countries that signed the Kyoto Protocol. But so far, the offset market in the U.S. has been voluntary and free from any industry-wide oversight or standards for certification, projects, or business models. However, those days may be numbered. In mid-August, seven Northeast and mid-Atlantic states released the final model rule for the Regional Greenhouse Gas Initiative, a mandatory cap-and-trade program designed to reduce power plants’ CO2 emissions 10 percent by 2019. And California passed a statewide law in late September to reduce its emissions to 1990 levels by 2020, a cut of about 25 percent.

The industry buzz is that a California-Northeast trading market would be large enough to tip the entire nation into participating in a regulated cap-and-trade market. Certainly, California’s Global Warming Solutions Act of 2006 is a bold commitment, one that is likely to affect the domestic offset market once the details shake out. Where California leads on environmental issues, the nation usually follows, if sometimes reluctantly.

For now, there are bodies attempting oversight, such as the Climate, Community, and Biodiversity Alliance (CCB), the Center for Resource Solutions, and the Environmental Resources Trust. These are good organizations with solid records and intentions. But in the absence of mandatory regulation, their power is muted. For example, CCB focuses exclusively on forestry projects; CRS certifies only wind and solar projects with its “Green-e” label, although it has announced the development of a general carbon-offset certification program; and ERT, meanwhile, has a greenhouse-gas registry to define emission units, establish protocols, and provide third-party oversight. However, without government imposing industry-wide uniformity, retailers and project managers are free to select whatever oversight body they choose — or none at all — and consumers are unable to compare apples to apples across the board.

Further confusing the issue, companies tend to feel quite strongly about the business model they have chosen, and to sniff loudly at alternative models. Take the hot-button question of renewable-energy credits (RECs), which are megawatt-hours produced by qualifying renewable technology projects installed after 1997. Some companies won’t sell them as offsets because they are concerned about the possibility of them being sold as carbon-reducers twice: first by the renewable energy project itself, and then by the utility where the carbon emissions reduction actually occurs. CRS has a registry to keep careful track of RECs produced and sold to avoid the double selling of RECs, but it has no control over a utility’s carbon reductions, leading some companies to exclude RECs from their portfolios.*

But Mark Trexler — who has been helping companies fight climate change for 17 years and is president of Trexler Climate + Energy Services in Portland, Ore. — says an even more important concern when considering to REC or not to REC is “additionality.” This term means the project that you’re supporting by buying offsets — say, a wind turbine — wouldn’t be happening without that extra funding. This is the key concept underlying the very notion of an offset. If the wind turbine was going to be built anyway because of production tax credits, the falling cost of wind technology, or the rising cost of gas, project managers are not counting any value from your money when deciding to build the project. The project really is business as usual, not additional. While Trexler says there are RECs that can be considered additional, the majority are not.

In short, it really is a Wild West. But while there may not be a perfect choice at the moment, there’s still an argument to be made for participating now rather than waiting. Though voluntary consumer offsets will have only a small direct impact on global warming, Trexler says offsets have another important role to play: they can drive corporate action on climate change and influence long-term public policy.

Company Confidential

There are undoubtedly many offset providers I could have reviewed. I chose these five because they sell to individuals in the U.S. market (you can pay in dollars), they offer the ability to offset your entire carbon footprint (driving, flying, home energy use), and they invest in a variety of projects. All information has come from the companies’ websites or their representatives and has not been verified by third-party sources.

As you read or look into this further, think about additionality. In our voluntary market, people interpret and apply additionality in different ways, and a lot of credits are sold that shouldn’t be, according to Trexler. In the absence of an industry-wide standard to certify projects’ additionality, it’s up to consumers to try to suss that out as best they can. Ask any provider you consider patronizing: Would these projects be happening without the help of offsets?

Conservation International

The D.C.-based nonprofit started offering offsets to companies in 2001 and to individuals in July. So far, 20 companies have participated, committing to several 25- to 30-year projects that will, the group says, offset 16 million tons of carbon.

Cost per metric ton of CO2: $10; you can choose to offset any percentage of your emissions.

How much of your dollar goes to projects: More than 75 percent.

Type of projects: Preserving forests in Madagascar, restoring native tree species in Ecuador, the Philippines, and China. Look for future projects in Indonesia and other countries with rich — and threatened — biodiversity.

Beyond carbon, what do the projects do for communities? Conserve the biodiversity of thousands of endemic plants and animals. Promote human welfare by teaching agro-forestry, an alternative to slash-and-burn agriculture that leads to forestry-management jobs and resource protection.

Are they in it for the long haul? Projects are designed for 25 or 30 years, and CI seeks permanent protection for project lands via local governments. CI favors a management approach that integrates local leadership, though details change from project to project, depending upon whether land is owned by government, indigenous peoples, or private entities. Community outreach and education is key.

How the calculator works: Contains house, flight, and car info, without the option to break out separate pieces. Fields are sometimes vague (for instance, you would say you drive “hardly at all,” rather than entering a specific annual mileage). On the plus side, it has a category no other site does, querying whether you’re vegetarian, vegan, or omnivore. But it fails to explain why your diet might have carbon consequences, and it fundamentally fails to explain the assumptions its calculations are based upon, leaving the unfortunate impression that CI is just asking customers to trust it. This is eased somewhat by the option to donate any amount you want. (Most other organizations ask you to choose 50 or 100 percent of your calculated emissions.)

Certification: CI is currently seeking certification for its projects under the Kyoto Protocol’s stringent Clean Development Mechanism and the Climate, Community, and Biodiversity Alliance standards. The project in Madagascar will be monitored by an as-yet-unselected third party to track delivery of emissions reductions. Forest Stewardship Council or CDM certifiers are possibilities, in keeping with CI’s commitment to CCB standards.

Partners in clime: Pearl Jam and the Dixie Chicks, who are offsetting their tour emissions and asking fans to account for their carbon too.

The Climate Trust

Based in Portland, Ore., this nonprofit provides offsets to an undisclosed number of customers through two arms: The Climate Trust (which has offset 1.9 million metric tons since 1997 on behalf of industrial buyers) and CarbonCounter.org (which has offset 3,025 metric tons since 2002 on behalf of individuals).

Cost per metric ton of CO2: $10; you can choose to pay up front or monthly.

How much of your dollar goes to projects: 92 percent.

Type of projects: Regional projects include upgrading a paper manufacturer and a building in Portland, reforesting a riparian area in Oregon, and preserving a native forest in the Northwest U.S. Farther afield, projects include restoring an Ecuadorian rainforest, financing wind power, and improving transportation efficiency via truck-stop electrification, internet-based carpool matching, and traffic-signal optimization.

Beyond carbon, what do the projects do for communities? The Climate Trust cites a range of benefits, including saving money for companies, building owners, and tenants through energy efficiency; improving water quality and wildlife habitat; maintaining a sanctuary for a Native tribe’s traditional religious practices; providing sustainable local jobs and training; and ensuring that truckers get better sleep and roads are safer.

Are they in it for the long haul? Money from industrial clients is coupled with organizational money to get projects going, so the trust originates most of its projects. It manages projects by reviewing annual verification reports, securing permanent easements for some of the forestry projects, and more. Some forestry projects are of 50-year or 100-year duration. There are underperformance provisions in all of the contracts to ensure long-term integrity.

How the calculator works: Using data from the U.S. Department of Energy and the U.S. Department of Transportation, the calculator crunches numbers for both driving (annual miles driven divided by miles per gallon multiplied by pounds of CO2 per gallon of gas divided by 2,205 pounds per metric ton … whew) and flying (number of miles flown annually multiplied by 0.9682 pounds of CO2 per passenger-mile of air travel divided by 2,205 to get metric tons of CO2 per year per passenger). An RFI, or radiative forcing index, of 2 is also applied to the air-travel category to measure other greenhouse gases such as nitrous oxide and contrails. CarbonCounter offers you “estimate” and “exact” options for home, car, and air, which is handy if you’re feeling lazy about the details and don’t mind paying a bit extra. The home “exact” had a level of detail few people would know without sifting through a year’s utility bills.

Certification: Each project has been or will be verified by a third party who is an expert in that sector. Three projects — improving building efficiency in Portland and reforestation in the Deschutes River Basin and Ecuador — have been verified. The rest are scheduled to be verified in 2007 or 2008.

Amusing/motivating graphic: Little cartoon puffs of pollution indicate exactly how much you’ve soiled the Earth.

Confusing branding: The Climate Trust is head honcho here, with interesting projects and a lot of corporate clients. However, it developed an entirely separate site, CarbonCounter.org, for individuals to calculate their carbon footprints. But if you want to learn anything about the projects you’re funding, you have to drift back over to The Climate Trust.

Native Energy

Founded in 2000, this for-profit based in Charlotte, Vt., has sold its wares to thousands of customers, offsetting “hundreds of thousands” of short tons of carbon [1 short ton = 2,000 pounds], according to Billy Connelly, senior adviser on marketing and communications.

Cost per short ton of CO2 (Native Energy does not measure in metric tons): $12.

How much of your dollar goes to projects: As a for-profit company, Native Energy doesn’t disclose its margins.

Type of projects: Wind farms, renewable farm-methane project

Beyond carbon, what do the projects do for communities? A group of Native tribes from the Plains owns a majority interest in Native Energy, working with both the retail and wholesale markets, as several of the wind farms are on their lands. The methane project sits on a dairy farm near Loganton, Pa., run by the same family since the American Revolution. Ten new wind turbines owned and operated by Alaskan Native villages that currently burn diesel generators for energy will soon be added to Native Energy’s offerings.

Are they in it for the long haul? Projects are owner-managed, and a wind turbine is expected to have a 25-year utility life if well maintained. Native Energy has developed a patent-pending business model that addresses both customer desire for a one-time purchase and industry need for long-term investment. It buys all the units for a project’s expected operating life up front to get the project built. While some in the industry only recommend purchasing offsets for the current year, Trexler says selling offsets into the future isn’t inappropriate and can be key to financing projects.

How the calculator works: Native Energy uses a calculator called SafeClimate, which is based on World Resources Institute protocols but modified to conform with Climate Neutral Network’s requirements for certification in two ways: The home electricity consumption rate adds 7 percent to the kilowatt-hour figure to account for transmission and distribution losses (on average, 1.07 megawatt-hours are generated for every 1 MWh used); and the air-travel section doubles the short-haul emissions rate to account for the RFI. (Per WRI, most offset providers’ air-travel calculations are based on short-, medium-, and long-haul segments, because short trips use more fuel per mile on average than longer trips.) Native Energy’s calculator puts you through a three-step process that allows you some vagaries in the driving section. But air travel and home energy are very specific; the latter is detailed enough to send you hunting for your past utility bills, and you are not allowed to opt out. Entering values of zero doesn’t work either.

Certification: You can buy Green-e certified renewable-energy credits (RECs) through Native Energy’s Cool Watts program. Its WindBuilders (wind-farm RECs/offsets) product is certified by Climate Neutral Network. Its CoolDriver (wind/methane) program is not certified, though Native Energy hopes to get CNN certification in the future.

Eyebrow-raising moment: On the website, a cow’s speech balloon says, “You don’t need to stop driving to help fight global warming.”

Partners in clime: Participant Productions and Paramount Pictures offset CO2 pollution associated with air and ground travel, production energy use, and waste expended in making the book and film of An Inconvenient Truth.

TerraPass

Since its creation in late 2004, this for-profit company has sold offsets to 15,000 people from its headquarters in the San Francisco area, offsetting more than 72,575 metric tons.

Cost per metric ton of CO2: $8 to $11; for the frequent flyer, $1,500 will offset a million miles of flying (a half-million pounds of CO2), and the company will even throw in a folding bike.

How much of your dollar goes to projects? As a for-profit, it doesn’t disclose this information.

Type of projects: Clean energy via wind farms and biodiesel, biomass via methane capture on dairy farms, and waste management and industrial efficiency. The portfolio breaks down into one-third wind energy RECs, two-thirds biomass (cow power) and energy efficiency via purchasing and retiring credits from the Chicago Climate Exchange.

Beyond carbon, what do the projects do for communities? Create renewable energy through wind farms; prevent methane, a greenhouse gas 22 times more potent than CO2, from entering the atmosphere; encourage further efficiency and carbon dioxide reductions by participating companies.

Are they in it for the long haul? Projects are owner-managed, and the economics are broken down into an “ecosystem” of brokers, consumers, and retailers, rather than a traditional nonprofit model. “We’re changing something that used to be a cost burden into a profit opportunity,” says chief environmental officer Tom Arnold. “What kind of ecosystem do you want to build? As big as possible.” With a business model like that, as long as there’s profit, there’s commitment.

How the calculator works: For driving, TerraPass estimates the CO2 a car emits annually, based on mileage and vehicle type, relying on data from the EPA and the World Resources Institute. For flying, it uses WRI protocols to calculate emissions based on distance traveled and type of trip (short-, medium-, or long-haul). TerraPass directs you to choose your exact make, model, and year of car and your number of miles driven annually. From there, it tells you your city and freeway mpg and gallons of gas consumed per year, which is interesting, and your corresponding carbon emitted. However, it only offers set “TerraPasses” for certain amounts of carbon, so it rounds you up — sometimes quite significantly — to the next level. With flights, the same benefits and problems emerge. You can enter your departure and destination cities and it will calculate your miles flown and carbon burned, unlike many other sites that expect you to know your miles. But the TerraPass it offered me was nearly double the carbon I’d released.

Certification: 33 percent of a TerraPass purchase consists of Green-e certified renewable-energy credits (RECs). 100 percent of TerraPass purchases are verified by the nonprofit Center for Resource Solutions, which does a marketing responsibility review, among other things.

Partners in clime: Ford has purchased offsets to mitigate emissions from the manufacturing of its hybrid fleet and has produced a co-branded site with TerraPass for Ford owners.

Carbonfund.org

During the three years it’s been in operation, this Maryland-based nonprofit has sold offsets to more than 5,000 customers, including 30 companies and 15 nonprofits. Total offset: 92,000 metric tons.

Cost per metric ton of CO2: $5.50, but if you are willing to “go zero carbon,” you can get that ton for the low, low price of $4.30, via a partnership with Working Assets, which kicks in the extra $1.20.

How much of your dollar goes to projects? 93 percent goes to climate-change education, offsets, and outreach.

Type of projects: Renewable energy, such as solar for a housing project in Chicago and a veterinary center in Bishop Ranch, Calif.; wind farms and a landfill methane-capture project in the Midwest; and a cow-manure methane generator that powers a desalination plant, providing water for thousands in the Inland Empire, Calif. Reforestation of habitat in Montana, Arkansas, California, and India damaged by insects or fire. Energy efficiency by purchasing and retiring credits from the Chicago Climate Exchange. (Energy efficiency projects supported through CCX might include improving industrial, transportation, or residential technology through building or factory upgrades or changing fuel from coal to natural gas.)

Beyond carbon, what do the projects do for communities? Renewable-energy projects reduce the cost of living for low-income families, improve the economy and add jobs, reduce manure problems, and provide clean drinking water. “By supporting renewables, you’re helping to drive the cost of renewables down below coal,” says Executive Director Eric Carlson. “We think a huge sea change will happen once we do that.” Reforestation projects provide food and habitat for wildlife, protect rivers and streams, add beauty to the landscape, and stabilize soil and threatened watersheds, including habitat for threatened fish.

Are they in it for the long haul? “We want to make it as easy and affordable for anyone to reduce their carbon footprint as possible,” Carlson says. “If the offsets are certified, then price is an important secondary concern because this is about engaging millions of people in the process. For us it’s important that the offsets occur close to the time that the purchase occurs.” To make sure reforestation projects are viable, the organization plants 25 percent more trees than they are obligated to plant.

How the calculator works: Data from the U.S. Department of Energy’s Energy Information Administration and other sources is used to gauge CO2 emissions for driving and flying. The figure for flying is based on short-haul flights, which are more fuel-intensive, rather than the three-tier model. Carlson said other calculators might need to be adjusted upward, as there is a growing school of thought that, because planes burn their fuel at 30,000 feet where the atmosphere is thinner, they do more harm than what is quantified on any of the current carbon calculators.

Certification: Wind-energy commitments are Green-e certified RECs, except where noted on the website; most other renewable-energy commitments are certified by the Environmental Resources Trust. Energy-efficiency credits through the Chicago Climate Exchange are verified by that body and the National Association of Securities Dealers. Carbonfund is also considering efficiency projects certified by ERT. Reforestation projects are not certified but are audited by ERT.

Eyebrow-raising moment: Addressing a project in Arkansas, the website says, “The new trees will be resistant to the borer and be able to produce acorns much faster than ordinary oak trees.” It kind of sounded like these new trees were genetically modified, so I asked Carlson. He said he didn’t know, but that the projects are managed by “reputable” groups — the National Arbor Day Foundation and American Forests. Toby Janson-Smith, director of Climate, Community, and Biodiversity Alliance, said, “Yes, the term ‘ordinary oak trees’ does beget the question, what makes the new trees ‘non-ordinary’?”

Partners in clime: The Goldman Environmental Prize partnered with Carbonfund to go carbon neutral for its 2006 awards.

*[Correction, 26 Oct 2006: Originally, this article did not accurately describe the role of utilities in the debate over RECs. The concern focuses on the possibility that both a utility and a renewable energy project will offer the same offset for sale, leading to double selling.]

In Cuba, buying local is the only choice.

Photos: Erica Gies

Tired of my government’s hyperbole on the subject, I visited Cuba not long ago. I wanted to see it for myself and draw my own conclusions, before Castro died and the United States annexed it as a Sandals resort.

Reports of Cuba’s denigration are greatly exaggerated by people with ideological fish to fry. Cuba is no North Korea, and Castro is no Kim Jong Il. No, it’s not a perfect system — the most obvious, insurmountable issue being that its 11.4 million people are basically held prisoner on that island. Freedom of speech, press, and assembly are severely restricted, and there are no free elections. These are not circumstances I wish for myself, nor for the people of Cuba.

However, the people have not risen up against Castro for several reasons. OK, one reason is that he has allowed dissenters to leave in several waves, and has taken a stern hand against resident dissidents who don’t hew to his view. But there’s another reason, and it’s just as important. Cuba had a long history of imperial domination by Spain and then the U.S., with just a few short years of not-so-democratic democracy before Batista’s coup and Castro’s revolution. Since 1959, Castro has delivered on many of the revolution’s promises of equality, and the state has provided for the people in ways that often go unrecognized. Today, its approaches to public health and the environment could be a model worth following.

Castro just had surgery. He was in a good place for it. Cuba has one of the best medical systems in the world, with twice as many physicians per capita as the U.S. Its infant mortality rate and life expectancy are about the same as in the U.S., and its HIV/AIDS prevalence is almost nonexistent. The country also donates its medical expertise abroad: it made a huge contribution to the Pakistan earthquake-relief effort, sending 2,500 medical personnel. It even offers free medical training for students from disadvantaged areas of the U.S., provided they agree to return home and work in low-income neighborhoods. A political gotcha maneuver? Well, naturally. Fidel is a sly guy. But the mostly non-white and female doctors who otherwise wouldn’t get a chance to practice medicine are grateful, and Cubans take a great deal of pride in the program.

Cubans also enjoy a level of race and gender equality that I haven’t seen anywhere else in my travels through 24 other countries. The revolution’s principles of equal pay and equal opportunity for all have woven themselves into the social fabric. Because many who benefited under Batista were white or of Spanish descent, they were the majority who left during the first wave of emigration. Today, Cuba has a slight black or biracial majority. Interracial dating is commonplace, and kids of every color play together. People of every shade and both sexes are liable to hold any job. Most don’t live in fancy digs, but no one is homeless.

An organic farm in Viñales.

It may be the country’s environmental gains, driven by economic necessity, that are most impressive. Cuba is the only country in the world to have converted to organic agriculture in less than 10 years. On my travels, I saw fields near Viñales where corn and beans were grown together for better pest control. I also glimpsed the network of small, urban gardens that augments the country’s agricultural system, the beginnings of which are chronicled in a book called The Greening of the Revolution.

After the Soviet Union collapsed, Cuba lost $4 billion to $6 billion in annual support, including food, farming equipment, pesticides, and petroleum. Facing severe shortages, the country had to rapidly convert its fields to food crops; since there was no money for chemical inputs, farmers learned organic methods instead.

It was hard for several years. Food was scarce, and public sentiment turned against Castro. He called it the Special Period in Time of Peace, which basically meant suffering wartime scarcities without war. But by the late ’90s, the system was up and running. In 1999, the Grupo de Agricultura Organica, the organic farming association that spearheaded the conversion, won an important international honor — the Right Livelihood Award, known as the “alternative Nobel.”

Hitching a ride in a government truck.

Castro knows how to make lemonade. After the collapse, when the Soviets were unable to supply fuel and the giant autopista (think: autobahn) running the length of the country lay empty because no one had access to gas, he bought 1.2 million bicycles from China and manufactured 500,000 more, distributing them to the people. Most didn’t know how to ride, and accidents were common. But the government gave classes, and people got the hang of it. When I visited, bikers expertly threaded their way through classic American cars, horse-cart buses, pedicabs, and Coco taxis — not quite with the fearless bravado of riders in Asia, but with more laid-back flair.

The government also passed a law dictating that government vehicles must pick up as many hitchhikers as they can fit. It’s common to see 30 people standing up in the back of an industrial truck rattling along a road. Unfortunately, it’s also common to see people standing on the side of the autopista all day, fruitlessly waiting for the ride that never materializes. While the cities are filled with all kinds of random conveyances — including giant buses called camelos (camels) that can hold 200 people — getting between cities is a bit more of a problem.

Old, but not finished.

While this devotion to alternative transportation is a step in the right direction, many vehicles in Cuba are still 1950s-era gas-guzzlers. In fact, air pollution has increased since 1990. This is particularly noticeable in crowded Havana. In other places, however, the relative scarcity of combustion engines offers clear vistas and easy breathing. And Cuba’s per-capita CO2 output is one-tenth that of the U.S. While Castro’s oil-bearing friend in Venezuela, Hugo Chavez, may help up that ratio slightly, his input isn’t likely to have a dramatic effect any time soon.

Outside the cities, pristine land seems to abound, and that extends to underwater areas. I went to Guanahacabibes National Park and got a fantastic five-hour tour of unusually eroded limestone caves and related habitat from the ranger, who had extensive botanical, biological, and geological knowledge. I also went scuba diving off Maria La Gorda, part of the Guanahacabibes Biosphere Reserve, designated in 1987. The waters there have been recognized as among the healthiest in the Caribbean, due in part to limited coastal development. The sea fans are flourishing, the tube sponges are neon green, and the corals have retained their color — unlike so many places around the world, where they are bleached.

So is Cuba in a position to show other countries — especially its neighbor to the north — how to succeed with health-care reform, sustainable agriculture, alternative transportation, and protected ecosystems? Maybe, but only if those countries put aside their broken-record, Cold War-era reactions and really listen.

Cuba’s system has obvious flaws, but many charges against Castro — suppression of dissent, torture of enemies, backroom dealings with nefarious world players — can be made against certain other leaders as well. As Castro approaches what the U.S. government euphemistically calls “the biological solution,” let’s try to look at his Cuba clearly, to realistically evaluate the revolution’s successes and failures — and perhaps even learn something. With some members of the Bush administration champing at the bit to widen their democracy experiment to Cuba, let’s remember how audacious it is to assume that there is only one true way.

It’s easy to see in hindsight. Yes, Hurricane Katrina was a natural disaster, but it was aided by some very unnatural factors — developed wetlands and neglected levees, to name two. Figuring there must be other parts of the U.S. in human-made peril, we talked with experts to learn where we’ve made ourselves most vulnerable, and what — in lieu of scrapping the whole country and starting over — is being done to help.

Where will this country’s next “unnatural disaster” strike? Mouse over or click on the hotspots on our map to find out.

Map: NationalAtlas.gov