Skinning the Carbon Cat
Carbon offsetting can make you richer.

Royal Hawaiian Honey is the first U.S. food product to be certified Carbonfree, according to a report in environmental leader. Carbonfree was launched in July and certifies products as being Carbonfree based on a life cycle assessment of the total carbon footprint of a product which is then offset through any of three options: renewable energy, energy efficiency, or reforestation.

The fact that Carbonfund offsets using renewable energy investments raises an interesting point. From what I understand if you select the renewable option you essentially pay them to put money into an industry that, according to the Cleantech Index currently has a combined market capitalization of approximately $290 billion. Further, their backtesting of that index indicates that it significantly outperformed the S&P 500, Dow Jones 30 Industrials, and NASDAQ indices over the past 3 and 5-year periods.

It seems to me like Carbonfund should be taking people’s money, investing it, taking a commission, and giving them their cash back with interest. Heck. I’ll make the World an offer right now. Instead of giving Carbonfund your offset money, calculate the amount of cash required to offset here, give it to me, I’ll invest it in the Cleantech Index for your for 1% commission (less than most fund managers by far), and give it back to you at any time you want. Even if you lose 30% you’re still 70% better off moneywise than giving your money to Carbonfund. Plus, if you make money, you get all the interest.

That of course doesn’t mean Carbonfund is bad at offsetting carbon. In fact, one of the benefits of CarbonFree is that it uses the money to buy certifed renewable emissions credits - meaning that people who give them their money are given some assurance that their emissions are actually being offset.

As an everyday consumer you may not want to bother with investing in a renewable energy fund. The point I’m making is that if you want to, you do have that opportunity. There’s more than one way to skin the carbon cat, and it doesn’t always have to cost you money.

Tags: carbon, standards
Posted by Jacob on Wednesday, December 5th, 2007 | Permalink |

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