Sunday, June 13, 2010

Consumers voting with their wallets on voluntary carbon offsets

Posted by Hugh Whalan

When you buy a plane ticket, rent a car, pay an electricity bill or even use your credit card, you will often be presented with an option to ‘offset your greenhouse gas emissions’. If you do choose to offset your emissions this way, you are participating in the retail section of the voluntary carbon market. Despite accounting for slightly less than 5% of the billion-dollar voluntary carbon marketplace, the retail market represents one of the clearest ways that carbon-conscious individuals can vote with their wallets on the issue of climate change.

It is surprisingly given this, that so little research has been conducted on retail carbon offset products. As the retail market is the only place where individuals rather than companies are the majority of buyers, this small segment of the market presents researchers with a unique and important chance to understand how and why consumers actively offset their greenhouse gas emissions, as well as their views on climate policy and climate change.

Over the last 18 months I have been fortunate to be involved in the design and implementation of a survey of retail market participants conducted by researchers with Appalachian State University and the University of Alaska at Fairbanks and Environmental Credit Corp. It is the first industry-wide survey focusing on individuals in the carbon markets and yielded some interesting results.

The most important conclusion from the survey is that retail demand for voluntary carbon offsets will likely remain strong even if regulations place a national limit on greenhouse gas emissions. In simple terms, these consumers demand a solution to the climate problem and are willing to pay for it. Cost is a concern, but one which the impacts of climate change trumps more often than not.

Other interesting results are:

  • 96% of participants placed a high priority on purchasing carbon offsets that come from projects which generate or utilize renewable energy.
  • Participants were most likely to purchase carbon offsets as a result of car travel and electricity usage.
  • 67% identified themselves as Democrats (slightly more than 1% as Republican) and 61.2% had a household with 3 or more people. The average household income for participants was $90,000.

The survey will be conducted on an annual basis. For questions on the survey please contact Jason Hoyle at hoylejw@appstate.edu.

Hugh Whalan is the CEO and co-founder of Energy in Common, a non-profit organization, which allows individuals to make green energy micro-loans to the poor in developing countries.

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