Nobody’s Buying It: Rethinking Consumer Carbon Offsets

Buyers of offsets come in two types – businesses and individual consumers. But the balance between them is far from equal. According to the Ecosystem Marketplace 2008 report, businesses are responsible for around 90% of offset volume, and consumers a measly 10%.

With all the green awareness in the street, why is this? To me, it’s obvious:

Businesses get something out of buying carbon offsets. Consumers do not.

A company which offsets its emissions can:

* Get a public relations boost by telling their customers about it.

* Increase the motivation of green-minded employees.

* Start preparing for carbon regulations expected in future.

These 3 benefits are hard to measure, and a company which spends $100,000 on offsets is unlikely to see $100,000 in extra profit as a direct result. Nonetheless, a manager thinking about going carbon neutral has many convincing reasons to do so. It doesn’t look or feel like a stupid decision. So long as the expense is reasonable, it can be justified to that manager’s boss, and to the company’s shareholders.

Contrast this with the experience of Joe the consumer. When Joe buys offsets, what does he get in return? Perhaps he feels good, but only until he next uses the air con or gets in the car. Sure, he’s sending the economy a signal that says “I, Western Consumer, am willing to pay to become carbon neutral.” But if Joe is smart, he knows that signal is drowned out by a cacophony of suburban SUVs and belching power stations.

Bottom line: Joe just donated $100 to the Earth, and Joe feels like a chump.

So should we give up on consumer carbon offsets, and focus on the business market? Can an eco-minded do-good product ever achieve consumer success?

Wait a minute. What about dolphin-friendly tuna, fair trade chocolate and free-range eggs? Do you remember when air fresheners used CFCs and cosmetics were tested on animals? I see those bright green reusable shopping bags spreading like wildfire. Not to mention recycled paper and hybrid cars.

Consumer eco products are everywhere, and they are a huge success!

What’s more, some of these products cost way more than their non-eco equivalents. Fair trade accounts for 1-20% of sales in many product categories, despite adding 25-50% to the price. Around 40% of eggs bought in the UK are free range, organic or barn-laid, yet these cost up to 50% more than the battery variety.

And yet, when British Airways invited their customers to offset their flight emissions, a grand total of 0.01% took the plunge. Only 1 in every 10,000 passengers was interested in flying carbon neutral, even though it adds just 10% to the price.

When it comes to consumers, offsets are failing where so much else has worked.

So do we really care more about chickens than the future of the planet?

Are African cocoa growers more important to us than their continent as a whole?

Or, just maybe, is there something fundamentally wrong with how consumer carbon offsets are currently packaged, marketed and sold?