Common Tragedies

Thoughts on Environmental Economics

Offsetting Guilt

Posted by jab12004 on March 31, 2009


Recently, my dad sent me an e-mail asking if I had ever heard of TerraPass.   After booking a trip on a travel search engine, he was given the option to offset his carbon emissions with the purchase of a trip offset.   Basically his trip could be “carbon neutral” by him just paying a $6 fee. 

I decided to investigate TerraPass a bit more by seeing how much it would cost to offset a fictional business.  After answering a large number of questions about travel , square feet of office space, servers and other big ticket energy expenses, I was presented with an estimate of how much my offset would cost. 

I could see that as a business, I would feel satisfied purchasing the offset and then sticking a little label on my web page advertising my newly purchased climate savvy.   However, I think this mindset has a few fundamental problems. 

First, I’m not a huge fan of the idea that it is equally as good to buy an offset instead of finding ways to reduce consumption.  While TerraPass does not promote this idea, I think this cartoon sums up my how I feel.


Basically, voluntary offsets can promote the idea that we can still do whatever we want if we just buy the appropriate offset.

Second, their services completely ignore indirect carbon uses.  Basically, every single product in our lives probably has some carbon associated with its production use.  The glass of orange juice that I drink with breakfast required fertilizers to grow the oranges, petroleum to transport the oranges etc.  This is the same with any product a business might purchase. 

Some people might just say I’m nitpicking at a generally good idea, and that we should be thankful that some businesses care about these issues.  While that is partially true, I’m still a bit bothered that by attaching a simple price to offsetting emissions.  Instead of people evaluating how they might reduce their current emissions, it becomes tempting just to cut a small check and offset their guilt.  

4 Responses to “Offsetting Guilt”

  1. Adam Stein said

    Hi Josh,

    This topic has been pretty well picked over in the past, so I’ll just make three basic points:

    1. Neither TerraPass nor any other offset vendor I know promotes the idea that offsets are a substitute for conservation. In fact, TerraPass invests a ton of effort into promoting personal conservation, energy efficiency, and political engagement on our web site. Further, surveys of our customer base reveal exactly what you’d expect: people who voluntarily tax their own personal carbon emissions are incredibly environmentally conscious in general and make great efforts to reduce their footprint directly.

    2. Although no one promotes the idea that offsets are a substitute for conservation, critics of offsets often promote a contrary fallacy. Namely, the notion that reduced consumption is the key to mitigating climate change. Fact is, as long as our society is powered by fossil fuels, no amount of personal conservation will yield the emissions reductions we need. Personal conservation is, of course, both necessary and laudable. Voluntary offsets simply allow individuals to participate in the other half of the solution: our conversion to a clean-energy economy.

    3. For business customers, it is incorrect to say that TerraPass ignores indirect carbon use. TerraPass specifically does not certify products as carbon neutral, precisely because it is so difficult to measure the carbon footprint of a supply chain. We are very careful of the claims that we make and that we allow our customers to make based on their purchase of carbon offsets.


    Adam Stein
    Co-founder of TerraPass and long-time CT reader

  2. Evan Herrnstadt said

    what i always point to when offsets come up.

    ’nuff said.

  3. Andrew Stevenson said

    I’m curious as to what percentage of Terrapass’ (or other offset companies) business comes from people opting in as they purchase an air ticket or something else as opposed to corporations or other clients offsetting their total emissions. From what I’ve heard most airlines that offer this service on their website are getting very, very few people who actually check the box.

    Also, is it more expensive to buy a cheating offset from someone who is in a relationship versus single? Is that like CERs v. VERs?

  4. Carlos Ferreira said

    My own grad project is about offsets – the incredibly elusive biodiversity offsets – so I’m going to defend the idea. If the question is “why won’t regulation provide the same outcome as the offset?”, my answer is rooted in economics: create a market and you have a way by which society can decide on how to allocate resources in an efficient way. The problem is development is pitted against conservation? Allow society to decide, by price signals, which it prefers. There’s an opportunity cost to conservation, so by deciding (and paying!) for conservation, society discloses its willingness to pay for better environmental quality. This sort of wording doesn’t really make one popular, but that’s the point: efficient allocation of resources.

    I don’t really care for the business case, anyway – at least not at this stage. And, even considering I should read the Riot Act before coming in, guns blazing, I have a question for Adam Stein: you say you invest a ton of effort – OK, but how much money do you invest? Because that’s really the point…

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