F.T.C. Investigates Greenwashing

FTCThe Federal Trade Commission has opened hearings on green marketing, looking into the credibility of the increasingly eco-chic business of carbon offsetting. Poorly understood and with little verification, carbon offsetting became a hot ticket item in 2007. Everyone from the Academy Awards to Google is trying to go carbon neutral through offsetting.

In total, American corporations and consumers shelled out $54 million for carbon offsets last year, The New York Times estimates. The question the F.T.C. is asking is how exactly are those feel-good dollars being spent to effectively reduce carbon emissions?

Carbon market critics point out that it is too easy for carbon offsetters to double-count their efforts by counting carbon reduction projects that would have happened regardless of their investment. This is especially problematic since carbon offsetters are beholden to few certification programs and many are working in developing countries.

This problem led the World Wildlife Fund to accuse a full fifth of all U.N. carbon credits to be bogus. Hopefully the F.T.C. will offer verification solutions and provide a body of standards that could be used for the inevitable federally mandated domestic carbon market.

The F.T.C. hearings will look at misleading environmental claims in advertising, or what is known as “greenwashing.” Currently the F.T.C. has a set of guidelines for environmental marketing but they have not been updated since 1998.

Consequently, a whole new slew of quasi-environmental jargon has exploded that has little to no regulation. What makes one product more “sustainable” than another? When we say “renewable energy” on what sort of time frame are we talking? What sorts of externalities do “green” products discount?

While 2007 was indeed an exciting year for the environmental movement and cleantech specifically, some serious policing is needed to reel in the over-enthusiastic green marketing that is accompanying so many supposedly “green” products and services. Hopefully the F.T.C. will be able to disambiguate all these shades of green.

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