How Much Does A Carbon Offset Cost?

October 14, 2009 by Go Green Tips · Leave a Comment 

For self-styled environmentalists and regular folk just looking to do their part, there is often concern over the subject of carbon offsets. The basic lack of knowledge on the part of the American public is, while troubling, not altogether surprising. The information is difficult to find and at times difficult to process.

See more information about carbon offsets.

Your standard environmental poll always asks some version of the following questions: 1) are you concerned about issues of the environment, and 2) if so, does that concern factor into the types of purchases you make or the companies you make them from? The resounding answer to both of these questions is ‘yes’. While over-reporting of environmental concern is to be expected (probably equally as much as over-reporting of voting habits or under-reporting of tax evasion), we can reasonably expect that 60-70% of all Americans at least claim to care about the environment and at least claim that it will affect their choices. So why doesn’t it?

The simple answer is because there’s a prevailing sense that being an environmentalist takes too much work. It’s a non-starter for Average Joe that he needs a degree in environmental science or economics, or, God forbid, environmental economics, just to try to do something to show he cares about the planet.

This is where carbon offsets come into the equation. They’re the perfect intersection point between environmentalism and capitalism. It’s a market-based incentive for companies and farms and renewable energy plants to reduce the total amount of CO2 in the atmosphere, and for people to write a simple check instead of going back to grad school or spending hours of their free time researching the best organic fair-trade hypo-allergenic bamboo bibs for their new child.

The problem is, people don’t know what they are and those that do don’t know how they work. The most important question becomes, for the group in question, how much does it cost? And the answer, of course, is: “well, that all depends.”

Let’s start with the basics. Everything you do adds carbon dioxide to the atmosphere. Carbon dioxide is bad because it represents part of what causes global warming and most of what frightens Republicans who don’t want to pay for it. Every metric ton of C02 produced has a variable price associated with it. That price, however, is reflected not directly but indirectly: it is priced rather in terms of how much it costs somebody else to capture and mitigate one metric ton of CO2.

So, if you want to reduce your carbon footprint and you don’t know what appliance to buy or just don’t have the time or patience to find out, you need to buy carbon credits, or find someone to take your money and buy them for you. Carbon credits are simple financial instruments that represent metric tons of CO2 reduced by others.

The reason there is no set price for carbon credits in the US is two-fold: 1) there is no regulatory apparatus yet devised by Congress or the White House to set the price, because 2) every industry has different costs. It costs a solar power plant a lot to reduce the amount of CO2 in the atmosphere because the technology is fledgling and still not cost effective. That makes their credits expensive. On the contrary, it’s easy and cheap for a farm to trap gas in the soil, so they’re able to price them more cheaply. There is no set price for a carbon credit in the US.

In short, a carbon credit in the US worth one metric ton of CO2 could cost anywhere from 10 cents to $15. Under the European Trading Scheme, a metric ton(ne) has been priced as high as the Euro equivalent of $60.

So how do you buy a credit? Simply put, you can’t do it yourself. You don’t have access to the market. You need to find a company to do it for you. Footprint Zeroed, for instance, is a web-based company with tremendously accurate and thorough calculators that can help you determine what your carbon footprint is and provide you a fair price to offset it based on the cost they incur from the projects they buy credits from.

This is how the market works in a very basic sense. Contact a company like Footprint Zeroed to get the specifics, but take away the following points: it’s easy to do what’s right for the environment, it doesn’t have to take over your day, and there are companies out there who can do it for you.

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