World and Nation

FTC Asks Whether Carbon-Offset Money Is Winding Up True Green

Corporations and shoppers in the United States spent more than $54 million last year on carbon offset credits toward tree planting, wind farms, solar plants, and other projects to balance the emissions created by, say, using a laptop computer or flying on a jet.

But where exactly is that money going?

The Federal Trade Commission, which regulates advertising claims, raised the question Tuesday in its first hearing in a series on green marketing, this one focusing on carbon offsets.

As more companies use offset programs to create an environmental halo over their products, the commission said it was growing increasingly concerned that some green marketing assertions were not substantiated. Environmentalists have a word for such misleading advertising: “greenwashing.”

With the rapid growth of green programs like carbon offsets, “there’s a heightened potential for deception,” said Deborah Platt Majoras, chairwoman of the commission.

The FTC has not updated its environmental advertising guidelines, known as the Green Guides, since 1998. Back then, the agency did not create definitions for phrases that are common now — like renewable energy, carbon offsets and sustainability.

For now, it is soliciting comments on how to update its guidelines and is gathering information about how carbon-offset programs work.

Consumers seem to be confronted with green-sounding offers at every turn. Volkswagen told buyers last year that it would offset their first year of driving by planting in what it called the VW Forest in the lower Mississippi alluvial valley (the price starts at $18).

Dell lets visitors to its site fill their shopping carts with carbon offsets for their printers, computer monitors and even for themselves (the last at a cost of $99 a year).

Continental Airlines lets travelers track the carbon impact of their itineraries.

General Electric and Bank of America will translate credit card rewards points into offsets.

Most suppliers of carbon offsets say that the cost of planting a tree is roughly $5, and the tree must live for at least 100 years to fully compensate for the emissions in question. By comparison, an offset sold by Dell for three years’ use of a notebook computer costs $2.

To supply and manage the carbon offsets, big consumer brands are turning to a growing number of little-known companies, like TerraPass, and nonprofits, like These intermediaries also cater to corporations that want to become “carbon-neutral” by purchasing offsets for the carbon dioxide they release.

Majoras of the FTC pointed out that spokesmen for events like the Super Bowl and the Academy Awards have recently started saying they are carbon-neutral (though the Academy Awards drew criticism for the way its offsets were handled).

The FTC has not accused anyone of wrongdoing — neither the providers of carbon offsets nor the consumer brands that sell them. But environmentalists say — and the FTC’s hearings suggest — that it is only a matter of time until the market faces greater scrutiny from the government or environmental organizations.