We were at the Collard Greens monthly meeting the other night, hosted by Nelson Mullins and organized by Trey Gibbs at ERS. The speaker was Mel Jones from Sterling Planet the CEO of the largest trader of Renewable Energy Credits, RECs, in the US.

While Sterling Planet has been hugely successful, they seemed to be creating their own reality. Here are some of the questions that were posed to Mr. Jones and his responses:

• When Mel was asked by a business owner whether there was more benefit to lowering energy costs than just reducing their carbon footprint, Mel went on and on about tax incentives but failed to mention the creation of offsets for companies that reduce below their legally binding limit as members of the CCX.
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• Another person said that he had a client that was selling REC’s and wanted to know if they could communicate that to the public. Mel basically said, “No.”  I guess he forgot that he just spent the past hour telling us about all the REC’s Sterling Planet had created and sold. The truth is that clients who are using renewable energy have reduced their Carbon Footprint – that can be marketed.
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• Here’s the real kicker, Mr.. Jones did not want to say that CO2 offsets were a commodity. Why admit that there is a market price currently less than $2 when Sterling Planet is selling theirs for $20 per ton. This would cut into his margins – admitting that his projects offset the same amount of Carbon Dioxide as any offset purchased on the CCX (see Sexy Offsets below).

We can contact a project registered through the CCX, buy their offsets and paper it through the exchange. The client gets his project, the project gets its money and the market works. Simple economics show that by gouging at $20 per ton cuts demand, less projects get done and WE ALL LOSE OUT!!!

Earth to Sterling Planet, we got a problem!

Solar Power?

It’s official: Sex sells, even when it comes to selecting carbon offset projects.

The current environment in the US makes all offsets voluntary. Under a voluntary model, businesses appreciate the many advantages to offsetting their CO2 footprint besides just doing the right thing. For example, there are the marketing advantages that give environmentally-friendly businesses a leg up with their competition and of course there are cost-saving energy efficiencies. The most prominent benefit, however, is public relations/marketing. For this reason, a business would like an offsets that they can easily publicize to their customers, which are also known as sexy offsets.

We all can agree that sex sells. Local offsets are sexy, because most people connect with local projects. Alternatively, the offset could be from India where it helps poor farmers—how can you argue about helping the poor? Wind power is clearly sexy to some—how many offset posters or websites feature a wind turbine (b.t.w. why aren’t they spinning?)?  Forest offsets are easy to understand and clear to all buyers, very sexy.  A farm offset sounds better than saying methane capture. Methane capture is very important but not sexy. It’s not surprising that offsets created by energy efficiency and fuel switching emission are not sexy. 

There is sexy and then there is practically pornographic. One of our competitors claims to have access to a solar project that costs $100 to offset a metric ton of CO2. To give you a frame of reference, we are selling the offsets that have the same effect on the environment for $1.85, so I guess our offsets are rated G. 

What are we really talking about? Greenhouse Gas Emissions effect the world’s climate not just local climates. Each offset equals one metric ton of CO2 emissions. Should you pay more for a sexy offset? A reduction is a reduction: it is just science.

Last Thursday, Arnall Golden Gregory hosted a panel discussion sponsored by Verus Carbon Neutral on Sustainability for Small Businesses. Lynette Young, President and CEO of Damespointe led the panel. Lynnette brought insight and focus to the group and is very knowledgeable about the topic as Damespointe is the lead consulting firm for Sustainable Atlanta, which encompassed all city government’s operations and internal polices. 
 

The other panelists were Thomas M. Cushing, Vice President, Chicago Climate Exchange,  Roxane Peyser, Managing Principal, Maurgood and David Duncan, Co-owner Paddywax.
 

Each panelist brought there own expertise. Thomas Cushing did a great job explaining about what the Chicago Climate Exchange does, how Cap and Trade works, what offsets are and why companies would join the exchange.
 

Roxane Peyser described sustainability and the path a small businesses should take in becoming sustainable. She made it very clear that first you should measure where you are now in order to understand where your destination is going to be. This means a Carbon Footprint Audit, an energy audit, water usage audit, etc. Roxane also gave a blueprint to avoid the perception of greenwashing.
 

The small business perspective came from David Duncan co-owner of Paddywax, a high-end candle making company. He discussed his experience with sustainability. David was clear that becoming Carbon Neutral ahead of competitors is a distinct advantage, especially in dealing with retailers like Whole Foods. Being first allows Paddywax to market itself as an early adopter.
 

The audience was lively and full of questions and comments. We were fortunate to have Josh Wittenberg from Return to Eden in the audience. He brought up the topic of Organics and asked Tom Cushing about how government involvement can affect the market.
 

Another audience member, John Ramey from Valley Wood, clarified information about forestry offsets.
 

An increasing number of businesses in Georgia are focusing on sustainability. There is a definite focus on first mover advantages. This includes marketing benefits, organizational improvements and employee appreciation.

I like Broccoli. I eat it regularly and enjoy it. I would eat broccoli regardless of the health benefit.  According to How Stuff Works Broccoli has vitamin C, vitamin A, folic acid, calcium, and fiber. Broccoli also may work to prevent colon cancer. Should I get the health benefit even though I would have eaten it anyway?

In today’s market, Carbon Offsets in the US should not cost more than $3.00 a metric ton. 

We applaud the efforts of anyone who wants to stop Climate Change by offsetting CO2 emissions. As members of the Chicago Climate Exchange (CCX), we help companies purchase and retire Carbon Offsets at very affordable rates. Many organizations that sell offsets are charging exorbitant rates (two or three times the market price). 

From an economic point of view, this means that demand is being dampened by inefficiencies. If prices were at reasonable levels more people and companies would offset. More offsetting creates more understanding and knowledge. We all benefit from more money being filtered to the very projects that help the environment.

What’s more troubling is that overcharging causes a bad feeling in customers. When I find that I paid too much for something I am less likely to buy again. If someone is paying too much for “doing the right thing,” there could be a huge backlash. We are in this business to help the environment and make money. It is short sighted to treat customers poorly, yet that is what is going on in our market.

That’s why we have made our pricing is very transparent.  Because the current price of offsets are so low, we add a 20% fee to whatever the market price of carbon is on the day it is purchased.  For example, today’s market price, to offset a metric ton of emissions, is $1.80 + $.05, so our partners pay only $2.21.

We’ve searched and when we did an apples-to-apples comparison, we can’t find any other organization like ours that charges less than $5.00 to offset a metric ton of carbon.  Some companies are selling carbon credits by the US pound instead of metric ton, hoping that no one does the math–we did and they’re charging $13.11 a metric ton!  This is insanity! See for yourself: Carbon Fund TerraPass

We supply all documentation, proving that all offsets are certified and retired. Offset projects can be requested by type and/or geography.

If more companies are able to offer Carbon Offsets closer to the market rate, demand will rise, and more money will flow to much needed offset projects.

Please, if your organization is paying more than $3.00 to offset a metric ton of carbon, ask where the money is going!!!