"If the offsetting reductions would have happened without a carbon market, the market as a whole will fail to achieve its environmental objective," the letter said.
Rep. Edward Markey (D-Mass.) specifically cited the carbon offset market as an area to examine when he asked FTC to begin review of the Green Guides in 2007, and the attorneys general of nine states submitted a letter during the review process urging the government to intervene in that market.
"The lack of common standards and definitions, along with the intangible nature of carbon offsets, makes it difficult if not impossible for consumers to verify that they are receiving what they paid for and creates a significant potential for deceptive claims," said the letter, sent by the office of Vermont Attorney General William Sorrell (D). "We need to ensure, by law, that carbon offsets are real, additional, verifiable, enforceable, and accompanied by some system that will permit average consumers to make informed decisions as to whether and what to buy," the letter went on to say.
Some industry groups asked FTC to avoid weighing in on the industry, saying oversight would quash the emerging market and the commission lacked the authority to impose new regulatory standards or testing protocols.
The Edison Electric Institute, which represents publicly held utilities, submitted a letter saying any attempt by FTC to define additionality would lead the commission into a "conceptual thicket."
"Any further encumbrance on qualifying offsets projects based on additionality would create confusion and be a barrier to GHG reductions, avoidances and sequestration from a policy standpoint," the group wrote.
Though some offset and renewable energy credit providers might currently provide a greater environmental benefit than others, FTC would have a hard time judging marketing practices as misleading, Hackney said.
"Most people at the consumer level are buying them as a feel-good sort of thing, which is a lot different from buying a $2,000 refrigerator on the assumption that you're going to save $500 over its lifetime through energy efficiency," Hackney said.
Kohm said FTC is careful not to issue guidelines that would stifle the development of an industry, such as the market for carbon offsets.
"The commission traditionally has been wary of getting involved in new technologies where the science isn't clear and where the market is developing," Kohm said. On the other hand, he added, "there's outright fraud, and the commission would always be concerned by that."
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500