Letter to Stephen Johnson, EPA, on Voluntary Offsets

July 27, 2007

Mr. Stephen L. Johnson
Administrator
U.S. Environmental Protection Agency
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Dear Mr. Johnson:

    As you may be aware, environmentally-conscious businesses and consumers are increasingly seeking to reduce their carbon footprint by purchasing carbon “offsets.”  The voluntary offset market is already valued at over $100 million per year globally, and many expect it to grow to half a billion dollars within the next few years.  There are now over three dozen offset providers based in the United States, and the majority of the demand for offsets comes from U.S. businesses and consumers.  While no one expects voluntary offsets alone to make a major dent in global warming pollution, they have the potential to make an important contribution.

Despite its promise, the voluntary offset market presents serious concerns.  It is almost completely unregulated, and the lack of generally accepted standards has raised questions about the credibility of some offset products.  Although offset providers and environmental organizations have developed a variety of voluntary standards, the proliferation of such standards may cause further confusion.  A wide range of offset providers and other stakeholders have suggested that the federal government could play an important role in bringing order to this market – to ensure that buyers are getting what they pay for, that this funding source for carbon reduction projects is not wasted, and that we maintain the credibility of offsets as a potential tool to limit costs in any future mandatory regime to control global warming pollution.

    As the federal agency charged with the protection of the environment, EPA is well positioned to address this set of issues.  Indeed, EPA’s Climate Leaders program is already engaged in developing protocols for offset projects and has relevant expertise.  Consequently, I am writing to request that EPA consider taking a leadership role in promoting the development and implementation of standards for the voluntary offset market – perhaps under the auspices of the Climate Leaders program.  EPA involvement in standard-setting could take many forms, including but not limited to endorsement of one or more existing voluntary standards or convening a stakeholder process to develop an overarching consensus standard.

I recently wrote to Chairman Platt Majoras of the Federal Trade Commission, requesting that the Commission review its guidelines for environmental marketing claims to address the unique issues presented by carbon offsets.  I expect that there will be opportunities for fruitful collaboration between FTC and EPA in addressing the interrelated consumer protection and environmental protection aspects of this issue.

I would appreciate hearing from you at your earliest convenience about this request.  Please contact me directly or Joel Beauvais of the Select Committee staff (202-225-4012).  Thank you for your consideration of this request.

                        Sincerely,


Edward J. Markey
Chairman


cc: Mr. F. James Sensenbrenner, Jr., Ranking Member

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