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Walmart Rebukes FTC Attempt to Standardize Carbon Offsets

| Thursday August 14th, 2008 | 2 Comments

walmart7777.jpgThe Federal Trade Commission publishes a green guide to ensure that companies don’t market their products with inaccurate environmental claims. It recently sought to update the guide with some clarifications on carbon offsets. As loyal Triple Pundit readers will know, I am an unabashed fan of increased regulation in the carbon offset sphere.
To my mind increased regulation is a win-win for offset retailers and enviros alike, because better standards will improve consumer confidence in offsets, increasing demand, and retailers can charge more for their products.
Walmart, as you know, has fought long and hard for a place of respect at the environmental table. They improved the fuel efficiency of their fleet, launched a campaign to reduce packaging, and are actively working to reduce energy use in their stores. That’s no small potatoes. Which is why it comes as a surprise that Walmart has come out against increased regulation for carbon offsets:

There are currently four proposed U. S. regional greenhouse gas cap-and-trade programs, approximately thirty mandatory U.S. State renewable portfolio standards, and voluntary REC and carbon offset markets, all with varying, and sometimes conflicting, requirements. As a result, standards for what constitutes an offset or a REC are not necessarily consistent from one provider to another….
Rather than attempting to define offsets or RECs, the Commission should rely on the flexibility inherent in the “reasonable basis doctrine.” The fact that standards may differ from one seller to another simply reflects the fact that there is no consensus about what does, or should, constitute a carbon offset. Different authoritative and expert institutions have adopted different, but reasonable, approaches. Although the Commission should insist that all carbon offset claims are supported by a reasonable basis, FTC precedent provides no reason to choose one reasonable approach over another.

I smell a rat. This isn’t even a very good excuse – Walmart acknowledges that the current offset market is overly complicated with many regulators and conflicting standards, but says that this wide variety just reflects a difference of opinion about what an offset is. The verdict isn’t out, therefore the FTC shouldn’t get involved.
Eoin O’Carroll over at the Christian Science Monitor’s Bright Green Blog contacted Walmart to get more info and they to got back to him with a statement you can read in full in the above link. In summary, Walmart outlines its support of a cap and trade system in America, and they have a lot of progressive environmental policies to reduce the carbon footprint of their business. Their only comment on this FTC debacle is the following:

In order to have the best collaborative decision in the formal definition of what constitutes a Renewable Energy Certificate (REC) or an offset, there are several governmental entities and highly technical experts with vast environmental expertise that could and should be included in these important regulations, to enable the flexibility of new innovation and technology that is occurring daily across the world.

That doesn’t really get to the heart of the matter: why they don’t support the FTC’s attempt to regulate the advertising of carbon products so that consumers have something to rely on when they make their purchases.
O’Carroll chalks it up to a fear of commitment, Walmart Watch calls it greenwashing: “Walmart’s attempt to keep offsets guidelines vague shows the company is more interested in marketing potential than actual environmental change.”
I call it plain old bottom line thinking: these products will remain cheaper the longer they remain unregulated. Readers, what do you think?
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Jen slings 100% post consumer recycled paper for the Union of Concerned Scientists, but she’s not representing said scientists on this blog. Of course, she fully intend to swipe facts and figures from their materials in addition to her own research as an MBA student in Sustainable Management. You can reach her at sustainablejen@gmail.com


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  • Jen Boynton

    Hey Eoin,
    Thanks for commenting! I saw that in your piece. The reason I didn’t mention it over here is that it seems to me to be more of Carbonfund’s rationale for Walmart’s actions than a real explanation. If Walmart was *really* concerned about the FTC having this role, I think they would have used stronger language to advocate for another agency’s involvement.
    I don’t really understand the downside to FTC involvement. They monitor the environmental claims of lots of products that are also regulated by other agencies. If the FTC made some minimal standards of what constitutes a Carbon Offset by that name, for consumer protection purposes, and then the EPA regulated the project selection and 3rd party verification side, we would only end up with stronger, higher quality offsets.

  • Eoin

    Thanks for linking to my post in Monitor’s Bright Green Blog. I think another piece of this puzzle worth considering is what a spokesperson from Carbonfund told me in an email that I posted in an update to my blog entry.
    Carbonfund says that the FTC is the wrong agency for the job. The EPA should be the ones setting these guidelines, they say. Wal-Mart hinted at the same thing with their comment about all the “highly technical experts with vast environmental expertise” out there who they think should be involved in setting these guidelines.