Attorneys General Ask FTC for CO2 Offset Guidelines

January 29, 2008

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Vermont Attorney General William Sorrell announced that he and nine other state attorneys general have written to the FTC and asked them to develop guidelines for businesses that sell carbon emission offset credits. The request came in a letter from the Attorneys General Offices of Vermont and California on behalf of themselves and attorneys general from Arkansas, Connecticut, Delaware, Illinois, Maine, Mississippi, New Hampshire and Oklahoma.

The FTC held its first workshop on green advertising earlier this month. The agency plans to update its “green guides.”

The problem with carbon offsets, according to the attorneys general, is that the lack of common standards makes it difficult for consumers to verify that they are receiving what they paid for and creates the potential for deceptive claims. Some estimate that the national market in carbon offset credits will reach $4 billion within the next three or four years.

Among the recommendations to the Federal Trade Commission are the following:

1. Conduct research on consumers’ understanding of carbon offsets and on whether requiring certain disclosures would be sufficient to allow informed decision-making.
2. Engage in public education and outreach to ensure that consumers understand the nature of carbon offsets.
3. Until standards are developed to regulate carbon offsets, undertake interim enforcement efforts to prevent overly broad environmental claims, to require that more narrow claims be supported by reasonable evidence, and to ensure that offset projects do not double-sell credits.
4. Consider whether renewable energy certificates should count as carbon offsets. These certificates may not qualify as offsets because renewable energy does not always displace traditional energy sources.

The FTC is accepting public comments on its Green Guides through February 11.

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