Carbon offsetting has become a popular way for businesses and individuals to take responsibility for their emissions. On the downside, it’s said to be counterproductive and a justification for guilt free emitting. As it’s based on (environmental) integrity, it will always have a hard time trying to escape its controversy. Then again, to ‘neutralize’ those emissions that cannot be prevented, reduced or otherwise, might be the palliative measure until there is a solution.
San Francisco based TERRAPASS is a social enterprise, the first to list a Verified Carbon Standard (VCS), which is a quality standard for the voluntary carbon-offset market. TerraPass offers products to businesses and individuals to offset their carbon emissions through the purchase of emission reduction credits. This enables TerraPass to fund, for instance, farm power projects and abandoned coal mine methane capture projects.
CEO Erin Craig talks about TerraPass’ philosophy, the TerraPass Footprint-blog, their Summer Carbon Slimdown-pledges, and the current status of the carbon trading business in the US. Furthermore Erin explains the difference between the voluntary market and the compliance market, and tells us about her personal search for permanent carbon reductions.
An online talk about the carbon trade with TerraPass
Sanderz: Can you give a brief introduction to the activities of Terrapass and the company philosophy?
Erin: We are a company focused on reducing greenhouse gas emissions and we do that in two primary ways. The first way is, we go to reasonably large emitters, mostly methane emitters, such as dairy farms, landfills and coalmines and help them implement projects that reduce their emissions. We pay them for doing that and we sell the emission reduction credits to people who want to take responsibility for their own emissions. That creates the source of funding that enables us to pay the emitters to reduce their emissions. We spent quite a lot of time working with our emitters making sure that they implement the emissions reduction systems properly and that we quantify accurately, how well they are reducing their emissions on an annual bases.
On the sales side, the flip side, we help our customers understand their own impact and what their activities emit and help them find ways to reduce them. This is the carbon offset business and that’s the one you see mostly on the website and that we have been in the longest.
Secondly, we implement large renewable energy projects on behalf of corporations. Sometimes large companies want more renewable energy than their utilities are able to provide them, and we help them build large renewable energy projects that serve their facilities. We have done large solar projects, energy from biogas and we’re working on some small hydro projects on irrigation canals. We worked on a geothermal installation that in the end of the day didn’t turn out. We have not done a wind farm on behalf of a corporation yet, although we have a few in the pipeline.
Sanderz: TerraPass funds, beside wind farm projects, mainly projects concerning the capture and digestion of methane. What are TerraPass’s criteria for choosing and developing a project?
Erin: We sell the emission reduction to people who want to make sure that their money is going to have the effect of reducing climate change emissions. We are very careful to select projects which require a source of revenue, that would come from us, in order to be able to get initiated or to continue their ongoing operations.. We choose the ones that are small or have some disadvantages compared to other projects. For example, some of the projects that we work with don’t generate energy, they just capture and flare the methane because their locations are so rural or their available methane is so small that they can’t afford to buy a generator. For a project like that isn’t any revenue, except for what we provide them. That’s one of our criteria and it’s called additionallity.
We also have some more straightforward criteria. To date, all of our projects have been inside the United States although we’re not married to that, it’s just where our customers base is. We know that many projects are being implemented in other countries, so we wanted to focus on projects in the US to show that it also can be done here. We choose projects that are very well documented and easy to quantify, because we have to have good evidence of how many metric tons of methane are being pulled out of the ground or out of their project. We select projects that have, or we help them install, good metering and operational procedures to make sure that the project is run well. We always try to make sure our projects have environmental benefits or that they certainly don’t harm the environment. We like projects to be all clustered in one area so that they have community benefits that’s spread around the country. Those are the basic criteria.
Sanderz: Besides offering offset packages for consumers, are there any other activities TerraPass does to get consumers to curb their carbon emissions?
Erin: The main one, that most people know about, is our blog, the TerraPass footprint (www.terrapass.com/the-footprint-blog/ ), that has been going for quite a number of years. There’s everything from policy debate to vary consumer friendly discussions. In addition to the blog we publish a newsletter, which goes to about 30 to 35.000 people about every two weeks. In the newsletter we highlight blog posts, but we also send out some other information that we usually try to make educational. This past Thanksgiving, when almost everybody eats turkey, we created a large info-graphic about the footprint of a Thanksgiving dinner. We do not expect anybody not to eat their Thanksgiving dinner, but it’s just an awareness to all.
On our website we have information, for people who go there, about carbon offsets, our projects and we have our calculator, which is very popular as an educational tool. We are fairly convinced more people come to our site to calculate than to buy, but that’s fine. We’re providing a service, an educational service, about emissions and what our activities actually result in.
Sanderz: What is the involvement of TerraPass to enhance ‘Planet’ in the triple bottom line, besides the offsetting for businesses?
Erin: Businesses tend to have more complicated carbon emission profiles than individuals do, so we have some different calculating tools that we use with businesses. With businesses we do a little bit more individually, meaning we actually get on the phone with them and help them understand their footprint. We offer a variety of different opportunities to address their footprint. For example, with some businesses we help them bundle an offset into their product they sell to their customers. Emissions from its use and manufacture are built in the purchase price.
We also work with large events, like conferences and meetings, and we help companies first of all understand the footprint of a conference or a meeting. Most of that footprint is from travel so we help people putting on a conference, encourage the people attending the conference to offset their travel to the conference. We help to provide tools for that. It’s always a real eye-opener for people who attend or who run conferences that travel overwhelms any other aspect of the conference in terms of the environmental impact.
On a larger bases we’ve helped companies develop personalized emission reduction projects, they can actually fund themselves, either at their own facility or looking into areas they do business with. We do that on a consulting bases.
Sanderz: Can you explain the difference between the voluntary carbon market and the regulated market?
Erin: The voluntary market is made up of people and companies who are purchasing carbon offsets entirely of their own volition, because they want to take responsibility for their emissions. That market operates alongside a compliance market which is made up of companies buying offsets to help meet some climate change regulatory obligation that is been placed on them. That compliance obligation obviously only exists in the places where the government has chosen to regulate climate change. The compliance market is much larger than the voluntary market, but it doesn’t exist everywhere. In the US is a compliance market for offsets only in California. Quebec in Canada will shortly follow California. In Europe there is a compliance market that covers the entire EU.
The types of emission reductions projects that are eligible and that can be used for compliance are pretty limited by comparison of the voluntary market. The voluntary market has standards, which help people to make sure what they are buying is real, verified and well quantified, but there’s a lot more choices because it’s not subject to the same politics of the regulated market.
Sanderz: TerraPass is an US social enterprise providing carbon offset products. How is it for TerraPass to trade in the US where the carbon market is said to be nearly dead, and one of the few countries that haven’t ratified the Kyoto protocol?
Erin: When the company was started in 2004/2005, it was a voluntary view saying that there are enough people and companies who wanted to take their responsibility for their emissions that you could sustain a company like Terrapass to build emission reduction projects. To be clear, we do not actually get shovels out and build them, we help fund the projects. If a compliance market would have developed over some years then that would have been great, but it wasn’t necessary.
The recession had a very big impact on the voluntary market. Individuals and companies buying offsets or indeed doing any kind of energy efficiency projects or emission reduction projects themselves, as you can probably imagine, are very easy things to stop doing when money gets tight. So we definitely suffered from the result of that in terms of overall sales and our business shrunk quite a little bit during the recession. We certainly had hoped that we would be able to use the emission reductions of all the projects we had contracted in a compliance market in 2008 or 2009. When that just didn’t happen, those projects were sadly getting no funding and, we had to adjust to a different size and different kind of expectations of what we can accomplish. Which is to say its smaller than it otherwise would be.
The fact that the US hasn’t ratified the Kyoto-protocol, made everybody, who was going to regulate climate change which is part of our state based initiative, drop out, except for California. You know, there’s so many things about climate change I can get depressed about, if you really think about it. But we don’t try to think about it too hard. We’re doing what we’re doing.
Sanderz: In the wake of Hurricane Sandy, President Obama brought Climate Change back on the political agenda. What policy changes do you expect concerning carbon offsetting and the carbon market in the course of Obama’s second term?
Erin: As a national endeavor climate change is a discussion that will be able to be had, and I think there will be policies over the next four years that will help address climate change, but I think they’re not going to take the form of a carbon trade market. They will take some other form. That will be either energy efficiency or renewable energy standards that are nationwide. There has been even talk of a carbon tax, although I don’t think that will actually happen. I don’t think they’re going to pass any laws that will include any carbon trade system. It’s possible though, with the changing political wind, that more states will join California on their own initiative. There’s a small market in the North East that may grow, but right now it is over allocated. They have way too many emission permits and nobody needs to buy any, but that may change.
National disasters isn’t something anybody wishes for, but people are beginning to realize with the number and severity of the sort of disasters we’re having that we’re playing with fire here and maybe we ought to do something about it.
Sanderz: What is the actual role of carbon offsetting in fighting Climate change? Or to step away from the belief that carbon offsetting is an excuse to keep on burning fossil fuels, what are the strengths of carbon offsetting?
Erin: The best thing about carbon offsetting is that it allows money to flow to the least expensive projects first. Consumers do not want to pay a lot, but they are willing to pay something. We can use that desire and willingness to fund emission reduction projects that would be a lot more expensive than a homeowner or someone doing it themselves.
I drive a car, I don’t drive it very much actually, but I do have a car and I do drive it, and I do get on a plane every now and again. Some of these things are just not avoidable as we would like to think they are. If I can’t avoid that, what can I do? The best thing about carbon offsetting is that it’s an affordable and real way to help those who can reduce their emissions.
Sanderz: ‘Go zero waste for a month’ is one of TerraPass’ ‘Summer Carbon Slim Down’ pledges. What is the definition of zero waste?
Erin: The Summer Slimdown was an effort to engage people to think about their activities that contribute to climate change, and to think about the connection between waste and climate change. Most of our waste, in the US anyway, is disposed of in landfills, and landfills, generally speaking, are very nice aerobic digesters who emit quite a bit of methane. With the Summer Carbon Slimdown ‘Zero Waste’ pledge we were trying to encourage people to think about how much they throw away, that ends up in a landfill. We had someone in the office who did that pledge and wrote some blog posts about it. It’s a very difficult pledge to meet. It means that everything that you are through with, whether it’s a chicken bone, packaging from something you bought, an empty bottle or anything it needs to go someplace where it’s going to have some other use. The chicken bone ought to go into a compost pile, the packaging ought to be recycled, and that’s how we defined it. Everything goes to some other use. What you find out very quickly is that it’s way less trouble not to have the waste in the first place then to worry about how am I going to get rid of it as a secondary use. The whole point of this pledge was, that you really start to think about, not ‘Where do I put this?’ but ‘Why do I have this in the first place and how can I avoid that?’.
Sanderz: Does that also depends on what state you’re living in?
Erin: Oh sure. The recycling and secondary uses are an economic question really. Anything can be re-used under the right circumstances. The ability to channel your goods into something that is going to be a productive re-use depends on where you are.
Sanderz: It’s a weakness of the human nature that a considerable challenge may not always result in a feeling of accomplishment, but in fact can cause a counter-effect: the relieve of being able to fall back into familiar ways. Wouldn’t it be more effective to alter a few customs in your life consistently over a period of time, to benefit the environment, than to put it all in one month for the sake of a challenge?
Erin: Of course, and we debated that pledge a bit before we launched it. The pledge was zero waste for a month, and we thought: ‘This is really hard. Maybe we should make it zero waste for a week.’ But if you do something only for a week, you can for example go out to eat for a week. There are ways you can avoid to actually engage in with the challenge. We decided that it would be better to make it really hard for people, so that they had to think about what they were doing, and over a long enough period of time that they might think: ‘Okay, if I really had to do this forever what would I do? How would I change my habit?’
By the comments people have put on our website and Facebook page it was pretty clear that a lot of them cheated. They didn’t say they would fail, but they had to cheat, because they had a party or people took it as it was intended, as to raise awareness. We didn’t give out any prices and we were not going to verify their results, so……
Sanderz: From the 1960ties to 80ties student activists were the foundation of environmentalism. Is the provision of offset packages for students an environmental stimulant or does it contribute to the environmental inertia to go against, for instance, the energy provider of a campus?
Erin: The one product that we aim for to students is their dorm room. We have a dorm offset. And I must say we don’t sell very many and most of the ones that we sell are to the parents, who buy them when their child goes off to college. I think, and this is not surprising, young people who are in college and not yet earning an income are the least likely to spend what little money they have on something like offsets. Part of it is literary not having the money and part of it is maybe not having the level of awareness. You have to get to a certain age before you start being not so self-centered and having awareness of how you are impacting the environment.
As a student there is very little you can do. Most of the college campuses, at least the one I have been to, control how often your heat goes on, they control your lighting etc. As a student you can be an activist, but there is very little you can do to change the infrastructure that you’re sitting in. But we work separately with sustainability folks on college campuses and there is a very active community of sustainability people, both students and staff members on college campuses.
Sanderz: TerraPass provides services for businesses of all sorts. We, on the other hand, mainly focus on the environmental awareness of touring and recording artists, and organizations to inspire a ripple effect to act against global warming on a personal level. Does TerraPass have any experiences with carbon offsetting in the music industry?
Erin: We do. There have been a couple of large concerts for we have enabled people to help buy and offset as part of their ticket price. We did that for the Indie bands ‘Cloud Cult’ www.cloudcult.com and ‘Low’ www.chairkickers.com . The main impact of a concert tour is the travel of the musicians, the associated personnel and equipment and the people who travel to the concert, whether they drive or take transit. That is what we bundled into the ticket prices. Surprisingly little impact is from the actual playing of the music. There’s a lot of electricity used, but not that much compared to travel. Also there are a couple of concert tours that we have offset the tour. For instance last year we have offset the ‘Closer to the Edge‘ tour’ for the rock band ‘30 Seconds to Mars’ www.thirtysecondstomars.thisisthehive.net .
We offset the Freemont Lovefest concert Festival, now renamed the Northwest Lovefest: www.nwlovefest.org. We offset the Superbowl www.superbowl.com. A lot of large sporting events have a similar profile. Anything else is pretty minor, but the travel eats it up. The travel can be very impactful.
Sanderz: Is it fair to say that because of a lack of mentality , legislation and technology (or funding thereof) carbon offsetting is a now-solution, and should become marginal in the future? What is your of point of view on this? (How do you see the long term future for TerraPass?)
Erin: Climate change is a huge challenge that touches so much of everybody’s life, not only in its effects but also in how all the emissions are generated. All the voluntary efforts, doing what you can in your life and buying offsets, are good for raising awareness and they make a difference as large as they are, but they are entirely insufficient and not a solution. They are a step.
Suppose if the US government were to pass a carbon tax that doesn’t have the effect of making offsets more valuable, I would say fantastic, at least we did something. At the end of the day it doesn’t matter to me what it is, as long as it is something. If offsets become not a regulatory tool but rather just a voluntary awareness raising and take responsibility aspect I think that would be great. TerraPass will do that and also other things. That’s why we are now implementing large renewable energy projects for corporations. Some corporations are fortunate enough to have built up some money and want to put their capital to good use for their ongoing operation. We’re lucky to have companies with that kind of a long term perspective who will put their money into renewable energy projects to serve themselves. It’s a great way to take responsibility for their own emissions and we’re happy to help them even though offsets are not part of it. We see lots of opportunities to help people in dealing with and addressing climate change. As we move forward and it turns out that offsets aren’t the best way, then I’m sure we have lots of other things to do. We’re still here and there are quite a few that aren’t.
Sanderz: The question we ask all interviewees: what do you do at home to reduce your carbon footprint?
Erin: I’m not a consumer. Luckily, I don’t like shopping. I don’t buy very much, so I live my life with a reasonably small footprint, but I always look for ‘What can I change?’or ‘What can I do differently?’
One of the things,I started over the last few months -and I took my pledge over the summer related to it- is walking. We moved into a location where I’m able to walk to many places, including the train station. It’s about a mile away, so when I go to work I walk to the station, I take the train and walk another mile to the office. It makes the commute a little bit long, but I don’t ever get in a car, except on weekends to go grocery shopping. I really reduced my driving in the last six months, which I really like.
That’s the sort of thing, I look for opportunities to make a permanent change and you can only find so many of those. We moved into a new house and replaced all the light bulbs with led lights. I really appreciate being able to do that. I’m not wild about fluorescents, because of the way they work and the mercury in it. As we moved into the new house we changed all the bulbs in the house to LED.
I look for ways to make permanent reductions, but there are reasonably few, meaning I don’t find one every day. I look for them though.
If you want to find out more about TerraPass you can visit their website @ http://www.terrapass.com