October 22, 2013

What do Carbon Offets Cost?

I personally have always liked energy efficiency.  I've generally only spent money on energy efficiency when it makes financial sense to do so.   But there is also a legitimate desire by some to reduce energy use and reduce greenhouse gas emissions for the good of the environment.   I mostly consider that a nice side benefit to my energy savings projects rather than my primary goal.

Carbon Offsets are one way you can achieve reduction in greenhouse gas emissions.     If your personal goal is to reduce CO2 production then buying carbon offsets can achieve that more practically than spending money on some low return energy efficiency improvements in your own home.

As an example to illustrate the idea : I could spend $10,000 on solar energy panels and save myself $200 a year in electricity.   That would end up cutting about 1/2 ton of CO2 emissions.    But a $200 return on $10k is not great.    So it doesn't really pay to do that unless my real goal is to save the environment.   Or I could put my $10,000 into paying down our mortgage and save $400 in interest and then spend $10 to buy a carbon offset to save more a full ton of CO2 in some other more effective CO2 reduction effort like a wind farm in the Dakotas.   I could even spend $200 on carbon offsets that reduce 20 times as many CO2 emissions.    (the numbers used here are rough but meant to be realistic)

So that lead in brings me to the topic:  What do carbon offsets cost and who sells them?
I'm only looking at the cost per ton of CO2.    I'm not looking into the quality of the projects or anything like that.  

I first researched some of the more popular carbon offset services and found prices on their web sites.
The costs per ton of CO2 I found are :

Nature Conservancy : $15 (tax deductible)

NativeEnergy.com at $14
CarbonFund.org at $10 (tax deductible)

TerraPass.com at $12

Then I came across an index of providers with prices per ton at CarbonCatalog.org   They list some organizations starting as low as $5.   I'd not hear of most of those companies but theres some real cheap prices out there.

The cheapest they list was : Versus-CO2.com  at just $2.75 per ton

Clearly theres a wide range in prices.    I've got $2.75 at the cheap end all the way up to $15.

However I wouldn't recommend simply signing up for the cheapest option without further research.  Its a good idea to verify the projects are certified and examine how exactly the companies are achieving their CO2 reductions to make sure you're really paying for projects that have a legitimate impact.

I should also point out that there is some debate about the effectiveness of carbon offsets.   I'd encourage individuals to investigate the idea fully and consider any criticism before buying them.  

Photo credit: Some rights reserved by quinn.anya

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