There is so much green being bandied about that it’s practically impossible for us mere mortals to sort out the true green from the green wash. Some of the claims are indeed true, some are a pile of hocus pocus, and some are well, good in theory but too bloody bad because of unintended consequences. So in this, my new series about what’s green and what’s not, I am going to attempt to figure out just that. You and I can then vote green thumbs up, or alternatively, down. (See the thumb key at the end to see how to rate).

In this my inaugural piece, I thought I’d go straight for the jugular, and tackle that most maligned of issues… carbon credits. Do they have an objectively positive effect on our atmosphere, or are they – as many claim – only a license to pollute?

Firstly, let’s make sure we all get the basic concept, which, if you’re reading this you probably do. But just in case, here goes...

Let’s say your next door neighbor starts grinding away on his electric guitar at three in the morning. He’s not only burning through your patience, but electricity, which usually comes from carbon dioxide-emitting power plants. Carbon dioxide (CO₂) is, of course, one of the primary greenhouse gases making our global thermostat rise.

Your neighbor can now keep you awake with a clear conscience – he can shell out to deal with his guitar’s pollution. Here he has two options: he pays to either 1) support companies/projects that remove existing CO₂ from the air, or 2) buy into a project that theoretically prevents an equivalent amount of CO₂ from going into the air. That’s a carbon credit, or offset, or reduction. His serenade may be contributing to your stress, but not global warming… in theory.

The concept is grand. For under the cost of one grande cappuccino a week – about $100 a year – you can buy enough carbon credits to essentially add no CO₂ to the world’s atmosphere. You’d be ‘carbon neutral.’ If every human was carbon neutral there’d be no more global warming.

This same general principal holds true at the country level too. Under the United Nations’s (U.N.) Kyoto protocol, if country A isn’t going to make a deadline to reduce its carbon emissions to a given allotment, it can purchase credits from country B, or UN-accredited projects in the developing world.

The concept sounds so brilliant, such a win-win, what’s all the fuss about?

The first issue – and perhaps the most confused issue in the retail market in particular – is whether a carbon credit is truly ‘additional’. That’s U.N. jargon that basically means “would the carbon reduction have occurred anyway if the carbon market didn’t exist?” For example, let’s say our midnight guitarist bought carbon credits that paid farmers to plant a bunch of trees that store carbon in their trunks and soil. If the farmers were going to plant their trees anyway with or without your annoying neighbor’s money, then all the fellow has done is give a nice little bonus to the farmers. His cash has not added at all to the amount of carbon reductions. The poor bloke’s carbon credits are not additional and thus entirely bogus.

However, if the farmers were scraping by and couldn’t afford to plant those trees until our budding musician came along and paid them, then the resulting carbon credits are additional (assuming they meet several other criteria, if you use the U.N. guidelines).

Now we get to a second rather unfortunate issue, the permanence of the carbon credits/offsets/reductions. How does our musician know that the farmers will still have his trees in 10 years, 20 years, 40 years?

A couple of years ago, the band Coldplay paid villagers in India to plant mango trees to sequester the carbon the band emitted during CD production. The villagers would soon have fruit, and the trees would soak up the CO₂. When someone checked on the status of the trees only a couple of years later, many had shriveled and died from lack of care and watering. Ouch!

This inability to guarantee permanence for some sequestration techniques is why advocates of carbon credits tend to prefer projects that stop CO2 and other greenhouse gases from going into the air in the first place. The CO₂ prevented from going into the atmosphere by making an old, inefficient coal-fired plant more efficient will forever more not have gone into the air – if you see what I mean.

At the country level, most carbon credits fall under fairly rigorous regulation by the U.N. – except for those in places like the U.S. that do not fall under the Kyoto Protocol and so currently have no laws governing them whatsoever. For us consumers valiantly trying to do the right thing and offset those emissions that we just can’t do anything about (I’m sorry, but I am not riding my bicycle to work in over 100 degree weather), the world of retail carbon credits is unregulated, and an utterly confusing mess.

Currently there are over thirty online retailers, and they are definitely not made equal. Some are altogether iffy, making claims that frankly aren’t true. (Currently, carbon credits based on Renewable Energy Credits are questionable at best because of the inaccuracies of calculating carbon reductions with them. And don’t be fooled into thinking that they’re certified for said use, as some might like you to believe. A few months ago I called the certifier to confirm, who said it’s not so.)

Last year, Clean Air Cool Planet wrote a good report that analyzed the sellers and the quality of their products – how they calculate the amount of carbon they claim to offset, whether they include additionality, and a bunch of other metrics.

The report shows that none is perfect, but some do have solid products, that not only reduce CO₂, but help people too. Through such groups as Native Energy and Climate Trust you can, for instance, pay a struggling American farmer to plant his fields with windmills. He can then sell clean electricity to the grid.

Carbon credits represent a horribly complex market, and I’ve only touched on a couple of the challenges facing those trying to make it work. I believe that whether carbon credits are useful or not depends on the execution. One reason I give carbon credits a green thumbs up, even with all the caveats, problems, fraud and other nefarious activities charading as positive actions for our global atmosphere, is the power of historical data.

In the latter half of the 20^th century, acid rain was a hideous environmental problem, killing forests and poisoning lakes and streams. High levels of nitrogen oxides and sulfur dioxide (NO_x and SO₂), mostly emitted by power plants, react with gases in the air to create nitric and sulfuric acid. These compounds also cause asthma. Almost 16 million tons of SO2 wafted into the air in 1990 alone.

That same year, Congress amended the Clean Air Act to include a mandatory cap and trade scheme for SO₂ akin to carbon credits, with extraordinary results. By 1995, the emissions had dropped by more than 20%. By 2002 they were down below 50% of 1990 levels, and acid rain is pretty much a thing of the past (Environmental Defense Fund ).

Would that the carbon market has such an effect on greenhouse gas emissions! In 2006, $34.5 billion-worth of carbon changed hands worldwide, according to Point Carbon. Has that resulted in an equivalent amount of CO₂ reduction? That would be a resounding no. Has some of that money prevented CO₂ from going into the air that otherwise would have polluted the skies? Yes. How much is impossible to say.

In the final analysis my P.O.V. is that carbon credits are valuable for fighting greenhouse gas emissions, but that a lot of ground needs to be covered to increase their reliability and relevance. For instance, in the U.S. they need to be regulated, otherwise just about anyone can make any claims and it’s practically impossible to substantiate them. They should be mandatory for major polluters, otherwise they have no teeth.

With the disclaimer to those of us buying retail credits of 'buyers beware', I currently give carbon credits one green thumb up.

Please let me know what you think. Or contact me if there is something in particular you’d like me to look into to find out whether it is green, or not.