NCPA - National Center for Policy Analysis


January 10, 2008

As more companies use carbon offset programs to create an environmental halo over their products, the Federal Trade Commission (FTC) said it was growing increasingly concerned that some green marketing assertions were not substantiated. Environmentalists have a word for such misleading advertising: "greenwashing."

Consumers seem to be confronted with green-sounding offers at every turn:

  • Volkswagen told buyers last year that it would offset their first year of driving by planting in what it called the VW Forest in the lower Mississippi alluvial valley (the price starts at $18).
  • Dell lets visitors to its site fill their shopping carts with carbon offsets for their printers, computer monitors and even for themselves (the last at a cost of $99 a year).
  • Continental Airlines lets travelers track the carbon impact of their itineraries.
  • General Electric and Bank of America will translate credit card rewards points into offsets.

Then there are the intermediaries, who cater to corporations that want to become "carbon-neutral" by purchasing offsets for the carbon dioxide they release:

  • To supply and manage the carbon offsets, big consumer brands are turning to a growing number of little-known companies, like TerraPass, and nonprofits, like
  •, for example, which provides offsets to companies like Amtrak and Allstate, uses the offset money in three ways: to plant trees; to subsidize wind and solar power so that it can be sold at more competitive prices.
  • Then it purchases credits on the Chicago Climate Exchange, which barters among hundreds of companies trying to reduce their emissions.

So far, the FTC has not accused anyone of wrongdoing -- neither the providers of carbon offsets nor the consumer brands that sell them.  But environmentalists say -- and the FTC's hearings suggest -- that it is only a matter of time until the market faces greater scrutiny from the government or environmental organizations.

Source: Louise Story, "F.T.C. Asks if Carbon-Offset Money Is Well Spent," New York Times, January 9, 2008.

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