Carbon Offsets: Government Warns of Fraud Risk The Federal Trade Commission is opening an investigation into the booming but unregulated "carbon offset" market. People buy these offsets to counterbalance their carbon emissions.
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Carbon Offsets: Government Warns of Fraud Risk

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MELISSA BLOCK, Host:

NPR's Christopher Joyce reports on a new investigation into the carbon offset market.

CHRISTOPHER JOYCE: Pankaj Bhatia of the World Resources Institute, an environmental think tank, says business is hot.

PANKAJ BHATIA: Amazing, in a word.

JOYCE: Last year, experts reckon the trade in the U.S was about $100 million and growing fast. Bhatia assess carbon footprints - how much carbon you or your business emits. He says he's been very busy.

BHATIA: Today, I got a phone call from a group that is managing concerts. And they wanted to know how they can quantify emissions from the transportation by helicopters of their equipment.

JOYCE: That's because the concert promoters wanted to buy offsets to neutralize the CO2 their concert produced. But how do the promoters know what they're paying for? After all, this is a market that trades in, well, gas, or more accurately, units of gas that are not produced. In the U.S., this trading is voluntary and no one is in charge. That worries consumer advocates.

JIM KOHM: Our concern is that because these claims are very hard to substantiate, and consumers can't easily tell whether they're getting what they pay for, that there is the real possibility of fraud in this market.

JOYCE: That's Jim Kohm. He is in the enforcement division of the Federal Trade Commission. Kohm says he doesn't know yet if there is much fraudulent carbon trading, but he is suspicious.

KOHM: There's been an explosion in green marketing. There are claims that we didn't see in the marketplace 10 years ago. Carbon offsets are one of those new claims.

JOYCE: So the FTC had decided to investigate. One of the things they'll look into is double-selling.

KOHM: So for example, if I have solar panels on the top of my store, and then I sell somebody else the right to claim that carbon scrubbing, I can't then claim the carbon scrubbing for myself as well. And if somebody were selling that twice, three times, then that would be a deceptive practice that the FTC would need to take action.

JOYCE: But Erik Carlson of Carbonfund, a company that trades in offsets, says it doesn't really matter who cuts carbon, who pays for those cuts, or who profits.

ERIK CARLSON: We need a 70 or so percent reduction in emissions. And in fact, that's all the planet actually cares about. It doesn't care about electricity versus methane versus this versus coal versus whatever.

JOYCE: Christopher Joyce, NPR News.

BLOCK: If you want to check up on your own carbon offsets, you can find some suggestions at npr.org.

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