Erik Blachford is the new CEO of TerraPass, a carbon offset company. When a consumer buys a carbon offset to offset the emissions from their driving, a trip, or even a wedding, TerraPass uses that money to fund renewable energy products.

Erik has never been a full-time environmentalist, although he is member of a few national organizations. In a former life he was the CEO of Expedia, although he left the company before its partnership with TerraPass was established. Erik is excited about the new venture, explaining on a recent blog post,

“Back in Internet pre-history, at the dawn of online travel, nobody knew you could even check airline ticket prices online, much less book tickets. Now almost half of all travel is booked online. I think we’re at the beginning of another explosion in consumer awareness, this time in the voluntary carbon markets.”

I spoke with Erik by phone on May 25th.

Green Options: How do you respond to carbon offset skeptics? For example, the argument that offsets are just an easy way for people to pay off their pollution without much sacrifice.

Erik Blachford: I hear that argument a lot, but it’s not accurate as to what TerraPass does. People who buy carbon offsets aren’t just sitting back afterwards and thinking they’ve done their duty. These people are active in other ways, too: they’re very in tuned to the problem and the other solutions. Furthermore, carbon offsets are a voluntary enterprise; no one is forcing someone to buy carbon offsets.

However, there is also a lot of talk about common umbrella standards for carbon offsets, and I think TerraPass and our customers would be better served with them. Our industry needs consumer protection standards. Right now it’s unregulated, and the consumer has to be very cautious. Consumers are taking the initiative and doing the research on which carbon offset programs are legitimate, but they shouldn’t be expected to do all of the work.

GO: What makes TerraPass different from other carbon offset companies?

EB: Terra Pass focuses on helping the individual consumer reduce emissions, rather than only large corporations. We want to help individuals take action to reduce their carbon footprint. We’re also very accessible. The company has a blog where we can communicate with customers and get their feedback and ideas.

GO: You support a number of different renewable energy and efficiency projects. Why did TerraPass get involved in biomass? You don’t see that as a carbon offset very often.

EB: It’s great to be able to work with biomass providers. Energy from biomass is produced by capturing methane from sources like cow manure and burning it. We’ve set up contracts with them, buy credits and register them on the Chicago Climate Exchange (CCX). We are very careful to ensure that our carbon offsets are not counted twice.

GO: I don’t see tree planting – a very popular offset – as a TerraPass option. Why not?

EB: Trees plantings are popular offsets because they’re intuitively appealing. But the science doesn’t hold up enough for us to sell them. Some science is based on the average age of a tree being 80-100 years, but that’s just not always the case. And when the tree dies and rots, that carbon dioxide goes back into the atmosphere. There are some carbon offset programs that focus on the conservation of forests rather than tree planting, and that’s an interesting avenue that TerraPass may explore in the future.

GO: What percentage of carbon offset costs goes to the projects?

EB: We don’t break that out, because we don’t think offsets are commodity products, which is what that kind of breakout would imply. We are more focused on our pricing to consumers, which is competitive though not rock bottom, because it reflects the work we put into researching our projects thoroughly and sticking to principles like matched maturity of credits. We could probably sell offsets for a lower price if we we’re willing to sell credits from previous or future years, to buy blind on the CCX, or to buy forestry projects, but we have decided not to do any of those.

GO: How do you assure customers that their money is making a real difference?

EB: We make sure that the customer knows what we’re doing. We publish a verification report each year and we use three protocols to verify our credits: Green-e certifies our wind power projects, SES certifies our biomass, and First Environment certifies our landfill gas projects.

GO: What are some challenges and advantages of the U.S. carbon market?

EB: The U.S. didn’t sign onto the Kyoto Protocol, so one challenge is that the idea of carbon offsets is still fairly new here. There’s a general awareness of the issue, but carbon offsets still feel more exotic to people than they really are. It’s just a lack of awareness that we need to work on.

However, an advantage is that the American consumer is generally very open to new ideas and is very action-oriented. They want to take responsibility and do something, so the mindset of the consumer is right for a carbon offset market.

GO: TerraPass is well-known for its relationship with Expedia. How do you see that relationship evolving?

EB: We’ve got a great relationship with Expedia. It gets our brand out there and we look forward to continuing our relationship.

GO: I’ve got to say, it’s difficult to find the TerraPass option on Expedia’s site. It kind of gets lost in the shuffle of offers for car rentals and zoo passes.

EB: Expedia has many different lists of add-ons for their trips, so TerraPass is lumped with many other options. But we’re really happy to have the brand out there.

GO: If you could partner with any other company or entity, who would it be?

EB: That’s a really good question, but my answer is going to sound really funny. I really want to partner with the federal government. Global warming and emission reductions are a national problem. We need federal action and federal standards to solve it.

Image source: Zimbio

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.

The New Oxford American Dictionary declared its 2006 word of the year to be “carbon neutral.” It’s certainly a term that’s been around the block lately: From Al Gore’s movie to London taxi cabs, many high profile individuals and even companies are offsetting their carbon emissions through carbon “credits” or “offsets,” thereby becoming more or less “carbon neutral.”

Carbon dioxide (CO2) – a major contributor to global warming – is emitted when we drive, when we fly, or when we flip the light switch (if the electricity comes from fossil fuels, which most of it does). We’re moving slowly toward a renewable energy system, but not fast enough for a lot of us. So one way to cut through the bureaucratic mess holding back 60 mpg vehicles and lots of clean electricity is to become carbon neutral yourself.

Buying carbon credits is as easy as doing a Google search and having your credit card ready. One can invest in an organization, activity, or event that reduces the carbon dioxide spewing into the atmosphere. Carbon credits range from tree planting (trees absorb or “breathe” carbon dioxide) to donating to an organization that develops solar ovens in Africa that don’t need to burn wood (and release carbon) to cook food. Many sites will calculate your personal carbon emissions based on where you live, how much your drive, where you get your power, etc, and then determine how many units you need to buy to become carbon neutral. Americans emit over 20 tons of carbon per person per year, and the cost per ton of certified carbon credits range from $5-$30 per ton. If you can’t offset a whole year of carbon, you can buy smaller increments, like offsetting the emissions from a trans-Atlantic flight or even a wedding.

Besides individuals who want to fight global warming, many companies are becoming carbon neutral too. Ski resorts, grocery stores, and banks are buying carbon credits in the form of wind power to offset their electricity use. Is this good PR for them? Absolutely. But they’re also feeling the impacts of global warming, from shorter winters to stronger storms to altered growing seasons. Companies that are feeling this effect on their bottom line will do well by their shareholders and by the planet to reduce their carbon pollution.

To be sure, carbon credits have their critics. Namely, that it gives people a false sense of security that they can keep on polluting without harming the planet. Of course, people must be educated while they’re buying credits; namely, that the first step is to make your life as efficient as possible: Switch out your old-fashioned light bulbs for super efficient compact fluorescent ones (the swirly kind), or take public transportation, or buy green power from your utility if it’s available.

Next, check out a reputable company to get hooked up with carbon credits. Offsetting your carbon emissions with clean energy or more trees is a practical, meaningful way to fight global warming. And don’t forget to call your elected official and demand more renewable energy in our electric system and higher fuel efficiency standards for our vehicles. Then, you can declare yourself the hottest thing in 2007: carbon neutral.

Coming up next Wednesday: An overview of the different types of carbon credits, and which may work best for you.

Illustration: Ilana Kohn

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