Wednesday, March 28, 2007

The Green Options Interview: Eric Carlson of Carbonfund.org

Here's an interview I just did for Green Options:

Carbonfund.org is a nonprofit organization that educates the public about the impacts of global warming. They also promote solutions by selling low-cost carbon offsets that individuals, businesses, and organizations can purchase to reduce their carbon footprint.

When a customer buys a carbon offset, Carbonfund.org purchases and then retires the carbon, taking it out of circulation.

Eric Carlson is the Executive Director of Carbonfund.org, and co-founded the company with his wife, Lesley. Eric has more than 15 years of experience in energy efficiency and global warming policy and project work. He was worked for the U.S. Environmental Protection Agency’s Energy Star program and has advised companies like Gillette, AT&T, and IBM on energy and money saving opportunities. Carbonfund.org’s motto is: “Reduce what you can, offset what you can not.”

I spoke with Eric by phone on March 23rd.

Green Options: There are a lot of companies and organizations out there selling carbon offsets, or Renewable Energy Credits (RECs). What makes Carbonfund.org different?

Eric Carlson: Our distinction is that we’re a nonprofit and that we let our customers decide for which projects their money is used. We also retire the carbon credits that we buy for our customers. Some companies buy them and then trade them, which doesn’t reduce the overall amount of carbon dioxide.

GO: What sorts of choices do your customers have?

EC: We offer three types of projects from which customers can buy RECs: renewable energy, energy efficiency, and reforestation.

GO: By the way, how do you “retire” carbon?

EC: We often just ask that our account with a particular project be closed, so that credits we’ve bought can never be used again.

GO: There’s a lot of discussion around the term “additionality” and carbon offset projects. Can you explain what that is?

EC: If a project would not have happened without someone buying the RECs to support it, then it is considered additional and a meaningful carbon reduction.

GO: How important is additionality to Carbonfund.org?

EC: We absolutely make sure that projects are additional. At the same time, I’m afraid that the controversies around additionality are slowing people down from just doing the right thing and reducing their carbon impact.

When you buy a REC, you are buying the environmental attributes of that electricity. There are so many variables that go into renewable energy projects, like leasing costs, interest rates, etc. RECs are a part of that, and by purchasing credits, you’re telling the market to buy and set up more renewable energy, and that’s additional.

Carbonfund.org cares a lot about additionality, we work on it every day, but we can’t let it get in the way of the prize.

GO: Some carbon offset companies don’t consider reforestation additional, or even a valid carbon offset.

EC: A tree is 100 percent additional. We buy that tree, so it would not have been planted without someone buying it. The Kyoto Procotol allows for reforestation as well, as does the Chicago Climate Exchange and tens of thousands of scientists around the world have endorsed reforestation as a meaningful way to cut CO2 pollution.

GO: Can you explain that a bit more?

EC: Think of renewable energy, energy efficiency, and reforestation all working together, playing distinct roles. Energy efficiency first brings down the demand for energy, then renewable energy ensures that the energy we need is clean and nonpolluting. Finally, reforestation sucks the carbon dioxide that’s already in the air back down and into its roots. It all has to work together.

GO: That’s the best argument for reforestation that I’ve heard yet.

EC: I just perfected that argument, actually.

GO: With so many renewable energy projects going up, how do you make sure yours are additional?

EC: Renewable energy is only 2 percent of our total energy – or, 98 percent of all new electricity generated since 1997 has been nonrenewable. So we can assume that 98 percent of the RECs out there are additional also, because if renewables could have happened without the RECs, we would have more than 2 percent renewables. So most renewable energy can be considered additional.

GO: How many customers does Carbonfund.org have?

EC: Over 22,000 people, plus over 160 companies and nonprofits.

GO: Have you ever been approached by a traditionally unlikely company wanting to buy carbon credits?

EC: Absolutely. We’ve worked with a large trucking company and even a private jet company, for example. These are not your typical “green” companies. They emit a lot of carbon dioxide and so this is a big financial commitment for them. These particular companies also don’t have big advertising budgets to talk about how green they are, so they weren’t just doing it for good PR.

GO: What are the questions people should be ask when looking to offset their carbon emissions?

EC: First, they should make sure that the projects are certified, verified or audited by a third party. At Carbonfund.org, we support Green-e and Environmental Resources Trust (ERT) certified renewable energy projects, our energy efficiency offsets are certified by the Chicago Climate Exchange and ERT. Our reforestation projects and methodologies are audited by ERT (in lieu of a certification standard) and our entire portfolio is audited by ERT to ensure we are offsetting what our supporters are asking us to. Our 2004 audit is up and our combined 2005/06 will be up in the next week.

After making sure the projects are certified, verified or audited, determine the cost per ton of CO2. The Chicago Climate Exchange’s website shows what companies, nonprofits, cities, and the State of New Mexico pay.

After pricing, decide on the project type from which you want to buy the offset, like renewable energy, efficiency, or reforestation.

GO: Speaking of pricing, there’s a lot of talk about why the price of carbon varies so much. Why do different companies charge so differently?

EC: Carbon doesn’t cost a lot and it doesn’t need to be painful. The cost varies according to the type of project. If you want to support solar energy in Seattle, then it’s going to cost you more than a wind farm in Kansas.

At Carbonfund.org, you know exactly what our markup is. Right now, carbon is being sold for $3.50 on the Chicago Climate Exchange. We sell the carbon credits for $5.50, while other companies charge up to $10 or $12 a ton. You’re getting the exact same product but are paying more for it.

GO: So why are some folks paying more for the same carbon credits?

EC: There’s a lack of education out there, and the media is often not clear about how this all works. But I think people are beginning to pay attention and understand it better.

In the end, the real cost of cutting CO2 is less than zero because it’s saving money. For example, you buy an efficient, compact fluorescent light bulb for $5 but you save $40 over its lifetime. So the bulb costs nothing. It is profitable to cut CO2 and we’re going to see more and more individuals and companies taking advantage of that.

Cross-posted at Green Options

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