FTC Moves To Investigate Climate-Offset Market

The Federal Trade Commission (FTC) has agreed to probe the growing number of companies selling carbon offsets to individuals.

Carbon offsets are credits that consumers purchase to compensate for the carbon dioxide emissions from their driving, air travel, electricity use, and other activities. Carbon-offset companies are expected to use the credits to fund tree plantings, support renewable energy firms, and engage in other projects that offset a certain amount of greenhouse gas emissions.

The number of companies selling carbon offsets has grown rapidly in the past few years with almost no regulation. The firms charge widely different prices for each ton of CO₂ offset. Critics say some of the companies are failing to invest in legitimate carbon-offset projects.

Last month, Rep. Edward J. Markey (D-Mass.), chair of the House Select Committee on Energy Independence & Global Warming, requested the probe, and on Aug. 9, FTC announced a review of the industry.

"I applaud FTC for taking a closer look at these climate consumer products," Markey says. "Carbon offsets can play an important role in the efforts to cut global warming pollution, but they need to be held to the same standard as other consumer products to ensure they are effective."

In the coming months, the agency will hold a series of workshops to seek input on the consumer protection issues raised by carbon-offset sales and the need for more direct FTC guidance.