A new report (PDF) purporting to rank carbon offset providers has just been released. It was commissioned by Cool Air-Cool Planet and put together by Trexler Climate + Energy Services, a consulting firm run by Mark Trexler. Trexler rated 30 carbon offset providers with seven criteria, each on a 1-10 scale.
This stuff is super-wonky, so let me skip to my conclusion: The report is good reading, with some interesting discussion of various issues facing the carbon offset industry, but as a guide for average consumers looking to purchase offsets, it’s not particularly useful.
The report’s larger goal of encouraging transparency and quality is certainly laudable. But a simple ranking of industry players at this point probably confuses more than it elucidates. Many questions need to be worked out, and independent standards need to be established, before such a ranking can serve as a meaningful guide to action.
(Of course, it’s the ranking that will attract press attention … but let’s not be cynical.)
Joel Makower has a fairly good summary of the report. TerraPass — who was rated low on Trexler’s scale — has two responses on their blog, one questioning the choices and biases behind it, one asking (and answering) questions every offset provider should be answering. Everyone in the offset market is buzzing about it, and not happily.
Trexler started his project by sending a survey to 30 offset providers. Only nine returned it. That should give some indication of the controversial nature of Trexler’s chosen metrics.
There are many questions at issue, but the main one is around "additionality." (You there, with the glazing eyes, perk up!) Additionality refers to carbon-emission reductions that wouldn’t have taken place in a business-as-usual scenario. It’s additionality that offset consumers presumably think they’re getting for their money — "X units of carbon were not emitted because I bought this thingy."
Additionality is a highly vexed topic. There are two basic ways of proceeding.
One is project-specific: tests are applied to specific projects to measure how they reduce emissions. This is an intuitively attractive approach, and probably what most consumers assume is going on. However, it does have its drawbacks, mainly that it’s quite time- and labor-intensive on an ongoing basis; some sort of governing authority has to intensively examine and test each project. Also, it makes the whole enterprise riskier for the project developers — if you put together a project and then fail the additionality tests, you’ve burned up a lot of money for nothing.
The other approach sets a business-as-usual baseline for entire sectors at the outset, meaning a great deal of work up front but less work on an ongoing basis. This also decreases risk for project developers, since they have a reliable figure for how much additionality they can expect to sell, and they can get their hands on some of that money to help finance the project. The drawback of this approach is that the additionality for any individual project is speculative. It may be that an individual project, if examined closely, wouldn’t meet the additionality level associated with its sector. And it puts consumers in the position of buying offsets that haven’t happened yet.
Trexler doesn’t like the latter approach, and so offset providers that use it got knocked down in his ratings.
He also doesn’t favor Renewable Energy Credits (RECs), which represent the hours of dirty-energy production displaced by clean-energy projects. (RECs are used by Kyoto’s Clean Development Mechanism, or CDM.) So offset providers that buy and sell them got knocked.
I don’t personally have any expertise or an opinion on additionality. I tend to think RECs are bogus in practice, if not in theory, but I’m no expert about that either.
The problem is that Trexler has passed off his opinion on these controversial questions as an "objective assessment" of offset providers. There’s nothing wrong with Trexler having an opinion, of course, but that’s not how the report is presented and it’s not how it will be conveyed in the media. It’s not going to come off to consumers as "Offset Providers That Do It Trexler’s Way."
The fact is that the offset market sector just isn’t mature enough yet to be ready for a straightforward ranking. A public discussion about these issues, and advocacy for transparency and quality, are much needed. But Trexler’s report should have been that, not a gimmicky ranking.
One last issue:
I don’t want to make too much of this, since the report should stand or fall on its merits, but it’s worth pointing out that neither Cool Air-Cool Planet nor Trexler are fully independent, disinterested parties in this matter. CA-CP has a business relationship with Native Energy, an offset provider, and helps market and sell their products. Trexler’s outfit provides companies with advice, consulting, and verification around offsets. Both have a financial stake in the offset market.
This just emphasizes the need for truly independent standards for the whole sector. Luckily, I hear such standards are being developed by more than one third-party institution. I’d say consumers should wait on those before making their ultimate judgments.