On verification

There's been lots of good news recently about public action against climate change, ranging from yesterday's story about the Canadian Youth Climate Coalition's "Adopt-an-MP" strategy, to today's series of Kyoto rallies. But for those who want to minimize their own environmental impact in addition to lobbying for change at the governmental level, a couple of other stories also highlight the difficulty that individuals face in trying to do their part - and the need for further government action to ensure that individual Canadians can trust that investments in the environment are put to good use.

First, GreenBiz discusses the current lack of any verification behind voluntary carbon trading:

More than three-dozen companies now offer to trade our cash to underwrite projects that reduce the amount of greenhouse gases circulating in the atmosphere. According to industry figures, this voluntary carbon market has already prevented or sequestered hundreds of millions of pounds of carbon dioxide emissions. And the field is exploding. Two of the world's largest power companies, General Electric and AES Corporation, just announced plans to create 10 million tons of greenhouse gas offsets by 2010 to sell to commercial and industrial customers.

But with battling experts, evolving scientific knowledge and no Better Business Bureau to police this new green field, what guarantees that the carbon offsets being sold effectively protect the environment?...

The voluntary carbon market surged 1000 percent over the past two years, according to recent reports. It racked in sales of over $100 million last year and is set to double again by next year. Yet no single standard exists to appraise the quality of marketed carbon offsets, forcing consumers to rely on advertisements for much of their education. In the short term, this could prove a bonanza for businesses marketing carbon offsets. But in the long term, it could compromise this consumer-driven market's credibility, threatening inroads made in the battle against global warming.

Now, says Jeff Reamer, assistant vice president for renewable energy at GE Energy Financial Services, "just about anyone can hang out a shingle and say I'm selling a ton of carbon."

Confronting this lapse, United Kingdom regulators announced last month that all future voluntary carbon credits undergo the same scrutiny as carbon credits sold on the mandatory European carbon market for factories and large institutions. The move has come under heavy criticism from many in the industry who argue that such regulation will strangle the innovative side of the market that keeps transaction costs low and contributes to sustainable development. Whether they are for or against the government approach, however, nearly everyone agrees with UK Environment Secretary David Miliband: "People need to be sure that the way they offset is actually making a difference."

Since the United States has neither a federally mandated carbon market nor established standards, it could not follow Britain's lead even if it wanted to do so. Instead, a potpourri of unofficial groups proposed their own standards.

It's perhaps not surprising that regulation hasn't yet caught up to the relatively new field of voluntary emissions trading. But even when it comes to monitoring products at large there's currently a serious need for more information and regulation, as the National Post notes that Canadians can't be sure that a product labelled as "environmentally friendly" really is so:

"Everybody is claiming one green thing or another," says Scott McDougall, president of Eco Logo, an independently operated labelling program established by Environment Canada in 1988 to help consumers identify sustainable products and services. "If companies look hard enough, they can usually find one thing about a product to market as green."

With the environment taking centre stage in politics and popular culture, companies are looking to cash in by touting themselves as environmentally friendly. But not all claims to being green are what they seem.

For example, says Mr. McDougall, a company that produces detergent might note it has low phosphates while concealing the fact it also contains a high number of carcinogens. A paper manufacturer can boast sustainable forestry practices but pollute huge quantities of water.

"Right now, we're seeing a lot of those kinds of claims," he says.

Unlike in the United States, where the Federal Trade Commission regulates claims about environmental friendliness, no such regulatory body exists in Canada...

As firms tout ever-more tangential green credentials, it may hurt those making genuine strides, Prof. Middleton says.

"The danger is that what they achieve gets devalued by the overall inflation of everybody saying they're green," he says.

Of course, it's understandable that the main call for government action is aimed at ensuring across-the-board emission reductions.

But while meeting Kyoto targets is an important first step, any government interested in meeting the environmental demands of its citizens should also be doing its utmost to make sure that individuals who are willing to pay a premium for further progress can rely on the claims of businesses who claim to be making a difference. Which in turn requires real verification of the claims of those now capitalizing on a "green" label.

From the articles, it looks like readily-available precedents are available both for the federal government to modernize its regulation of "green" labels, and for one or more provinces to began establishing standards to ensure that purchasers of voluntary emission reductions actually receive value for their money. The question now is whether Canada's governments will recognize the value of verifiable environmental progress, and empower their citizens to make fully-informed decisions to buy green.