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Offsetting industry lacks credibility, says FT study

The carbon offsetting market faces increased scrutiny after a national newspaper investigation revealed that firms and consumers were spending millions on offsetting initiatives yielding questionable environmental benefits. Unveiling the results of its six-week investigation last week, the Financial Times (FT) discovered that people and businesses were being duped by offsetting suppliers into paying for emission reductions that were difficult to validate. Some companies, the newspaper claimed, were making profits from carbon trading schemes for very small expenditure, and for clean-ups that would have occurred anyway. Last month, the liquefied petroleum gas supplier Calor came under fire from the renewable industry for its Carbon Offset scheme. The move was dismissed as a smokescreen, allowing consumers to perpetuate a high emission lifestyle in the false belief that long-term positive solutions to carbon reductions were being considered. Commenting on the FT investigation, Pedro Guertler, head of research at the Association for the Conservation of Energy, said: “I’m not surprised by the investigation findings. The one good thing that has happened as a result of the plethora of these schemes is that the DEFRA [Department for Environment, Food and Rural Affairs] consultation is already underway which hopes to introduce accreditation standard. Once this is in place, hopefully, the market will change quite quickly and become more credible.” He said the report would act as a brake on the sector, predicted to be worth $68.2 billion by 2010. Analysts put the value of the unregulated voluntary sector at $4bn over the same period. “One of the good things about the FT investigation is that the market will not grow so quickly. Another way of ensuring that carbon offsetting schemes have credibility would be if the UK was to appoint a Carbon Csar. There is one in the EU at the moment, the director general for EU Emissions Trading Scheme,” he added. DEFRA rejected the call for a carbon czar. A spokesperson said. “We think that industry is far too young to have any regulatory or legislative constraints imposed on it. This would only stifle the market. There currently exists ways of evaluating sector and we don’t see any point in duplicating that. Regulatory or legislative intervention will not provide the clarity that consumers want. In January we agreed that there was a lack of clarity in the industry, which is why we are providing a voluntary code of conduct backed by an international framework. This code will regulate the entire voluntary sector. There are people in the industry who are doing amazing things in terms of offsetting, and there are people who aren’t.” Andrew Ford, Calor corporate affairs manager, said: “I think one of the reasons why a czar was rejected was that DEFRA is thinking about a regulatory body, and industry was thinking about an advisory one. What businesses and consumers crave is clarity and advice on offsetting options. A carbon czar offering clarity and even some teeth is would be an enormous help to us.”