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Carbon Offset Workshop Comment Project No

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					                  Carbon Offset Workshop—Comment, Project No. P074207 

                         Submitted by the Center for Resource Solutions

                                     Presidio Building 97 

                                         PO Box 94129 

                                San Francisco, California 94129 

                                          January 25th, 2008

The Center for Resource Solutions (“CRS”) is pleased to submit the following comments
on the January 8, 2008 FTC Workshop on Carbon Offsets and Renewable Energy


CRS administers the Green-e® Certification Program, an independent consumer
protection program that certifies the sale and purchase of renewable energy and,
beginning in early 2008, greenhouse gas reductions (commonly referred to as “carbon
offsets”)1 in the voluntary retail market. Jennifer Martin, our Director of Certification
and Analysis, provided a brief summary of our programs in the afternoon session of the
January 8 Workshop on Carbon Offsets and Renewable Energy Certificates (“the
Workshop”). The Green-e® Program is over ten years old and is based on a long history
of collaborative standard development through open stakeholder processes. Green-e®
Energy and Green-e® Climate are governed by an independent governing board that
includes many of the leading environmental organizations in the U.S. Green-e® is also
an associate member of the International Social and Environmental Labeling Alliance
(ISEAL), an organization that promotes best practices in environmental standard setting
and certification. The standards as well as the certification and verification procedures of
Green-e® ensure that customers who purchase Green-e® certified renewable energy or
greenhouse gas (GHG) reduction products receive high quality products and get what
they pay for in type and quantity, and that the companies that sell those products provide
adequate and accurate disclosures to their customers concerning key product
characteristics. In addition, Green-e® allows companies that have shown leadership
through the purchase of renewable energy to promote their purchase through the use of
the Green-e® logo. The Green-e® consumer protection programs are described in more
detail in Appendix A of these comments.

 In regions that have implemented greenhouse gas emissions caps, the term “carbon offsets” can be a
defined term with specific regulatory meaning. For this reason, Green-e Climate refers to certified products
as GHG (Greenhouse Gas) Emission Reductions. However, these terms are used interchangeably in the
United States, with “carbon offsets” being the more common.

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                                 II.     COMMENTS 

These comments reflect the opinions of CRS as to how consumers understand claims
associated with the sale and purchase of renewable energy and carbon offset products.
These opinions are based on over a decade of experience certifying renewable energy,
developing our Green-e® Energy and Climate certification programs through extensive
stakeholder comment processes, providing consultation to users of renewable energy, and
advocating for policies to advance the use of renewable energy and the reduction of
greenhouse gases in the atmosphere.

A.     Applicability of Existing Guidance

We believe the existing Green Guides provide an essential framework for addressing
these issues. Key principles articulated in the existing guidance include the following:
    •	 All claims must be sufficiently clear and prominent to prevent deception.
    •	 Marketers must be clear to consumers whether claims apply to the product, the
        package or a component of either – otherwise consumer will likely assume the
        claim applies to both.
    •	 Marketers must have a reasonable basis for all express & implied claims as
        understood by reasonable consumer, without overstating environmental benefits.
    •	 Substantiating claims about environmental benefits may require competent
        scientific evidence.
    •	 General claims can be difficult to substantiate unless followed by clear and
        accurate explanation of basis of claim.
    •	 Third-party verification and certification can help companies substantiate their
        environmental claims, so long as certification conducted by an impartial third
        party employing competent methodologies to protect the interests of consumers,
        and the basis for certification is transparent to consumers.

Notwithstanding the above, supplementing the guides to clarify certain issues associated
with the sale and purchase of renewable energy and carbon offsets would be helpful, as
would providing specific examples of permissible and potentially misleading claims and

B.     Renewable Energy Comments

       1.     Overview of Renewable Energy and RECs

              a.      Renewable energy products sold in the U.S.

Grid-based renewable energy can be purchased in the United Sates through a utility green
pricing programs (where available), competitive electricity programs (in deregulated
markets), and through the direct purchase of renewable energy certificates (RECs). See In none of these cases is the consumer
directly receiving actual electrons generated by the renewable facility, which is

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physically impossible. Rather, the consumer directly or indirectly pays the generator for
a specific quantity of electricity generation in exchange for the right to claim the use of
renewable energy.

In utility green pricing and competitive electricity programs, a utility or electricity
provider bundles the sale of the renewable attributes associated with renewable energy
generation (which are represented through RECs) together with the sale of electricity.

A REC is an intangible, fungible commodity – a property interest in the environmental
attributes associated with the generation of one megawatt hour of renewable electricity.
RECs can be sold separately from physical electricity and purchased directly by (or
retired on behalf of) consumers.2 RECs are the accepted tool for transferring and
documenting the ownership of renewable energy.

The market for RECs is competitive and their price is determined by supply and demand.
See Utilities and competitive electricity
providers often acquire the renewable energy sold in green pricing programs through the
purchase of RECs.

In most of the United States, state-level regulatory agencies have established electronic
tracking systems to track the generation, sale and retirement of RECs.3 Where they exist,
tracking systems ensure that RECs are properly accounted for and prevent double
counting (discussed below).

The market for renewable energy (including RECs) provides a major source of revenue
that developers of renewable energy generation facilities consider in deciding whether to
build additional facilities. As a consequence, the market for renewable energy
incentivizes the construction of new renewable energy generation.

                  b.       Purchasing and retiring RECs is the use of renewable energy

The acquisition and retirement of a REC by a user of electricity (or the retirement of a
REC on behalf of that user) constitutes the consumption and use of renewable electricity,
and entitles the consumer to claim the benefit associated with using one megawatt hour of
renewable energy. Until it is retired (i.e. a claim is made, see #2 below), each REC may
be resold to another purchaser, who then owns the right to claim the use of one megawatt
hour of renewable energy.

The generation and delivery of renewable electricity in the U.S. electricity grid requires
both the delivery of electricity and the delivery of the environmental attributes (RECs).
This fact is not understood by everyone who considers a renewable energy purchase in
the United States, nor is there widespread understanding of how electricity is generated,
 Sometimes RECs are retired on behalf of the end user by the REC seller in lieu of actual transfer.
 Systems tracking renewable energy generation are in place in all or part of 30 states. See

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transmitted, and sold in U.S. power grids. Clarification by the FTC would be useful on
the following points:
     •	 that renewable energy consists of the delivery of electricity and renewable energy
         attributes, which need not come from the same generation facility or seller;
     •	 that renewable electricity claims should focus on the combination of the use of
         electricity and purchase of RECs;
     •	 attributing specific electricity delivery to a specific customer from a specific
         facility is not physically possible (unless the facility is located on the customer’s
         site) due to the pooled nature of US electric power grids;
     •	 the purchase of RECs and grid electricity constitutes a renewable electricity
         purchase; and
     •	 the use of grid electricity in conjunction with the retirement of RECs constitutes
         renewable electricity use.

These last two points are broadly accepted in the electric power industry, and are
implemented by many state-level renewable portfolio standards through the use of
tracking systems. However, these facts are sometimes not well understood by the public
or media.

       2. 	    Claims by Sellers of Renewable Energy

Sellers of renewable energy must substantiate all express and implied claims. Generally
sellers of renewable energy make claims about (1) the environmental attributes of the
energy they sell, and (2) the exclusive transfer of these attributes to purchaser of
renewable electricity.

               a. 	     Express and implied claims about the characteristics of renewable
                        generation facilities

Sellers of renewable energy make the express claim that their products are “renewable.”
CRS believes reasonable consumers understand this to mean the energy was not
generated with fossil fuels or nuclear power. Energy sources generally recognized as
renewable by consumers are wind, solar, geothermal, biomass (including landfill gas and
bio-derived methane recapture), ocean energy technologies and certain hydroelectric

CRS also understands sellers of renewable energy make an implied claim that the
generation of renewable energy did not have an unduly negative environmental impact.
CRS feels that reasonable consumers may not understand the entirety of the
environmental benefits and impacts of the generation of renewable energy, but that they
have a general perception that renewable energy has fewer negative environmental
impacts than other forms of electrical generation. CRS believes that the net
environmental benefit of projects such as windmills, solar energy technologies, Low
Impact Hydro Institute (LIHI) certified hydroelectric facilities, ocean energy
technologies, certain types of biomass, landfill gas and bio-derived methane recapture

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projects are such that reasonable consumers are not misled when the renewable energy or
attributes generated by such projects are sold without further explanation.

However, we believe the environmental detriment caused by the construction of certain
hydroelectric facilities not certified by LIHI (or otherwise constructed and operated in
environmentally sustainable manner) are such that reasonable consumers may be misled
about the environmental benefit of their purchase unless the potential detrimental impacts
of such projects are disclosed to consumers.

               b. 	     Implied claims regarding exclusive right to attributes
                        (no double counting)

Sellers of RECs and other forms of renewable energy make an implied claim that the
purchaser has exclusive right to the attributes of the renewable energy purchase – i.e. that
the attribute is not “double counted” (or “double claimed”). Consumers will be misled if
the attribute they purchase is double counted. Double counting occurs any time more
than one party claims the benefit to the same environmental attributes of a renewable
energy product.

Double counting can arise in a variety of contexts, some of which are obvious. The
following examples probably constitute outright fraud.

   •	 A generator, utility or marketer sells the same RECs to more than one purchaser.
   •	 A generator, utility or marketer separately sells both RECs and carbon offsets
      based on the same renewable energy generation.

                        i.     Null power and double counting

When renewable energy certificates are sold, the power underlying those RECs becomes
“null power.” Null power is stripped of its attributes, and cannot be sold as renewable
energy or counted for its renewable attributes. It would be misleading for a seller to
make claims associated with the environmental attributes of null power, since by
definition it has none.

   •	 A utility purchases power from a wind farm that sells RECs to another party
      based on that same electricity generation. The utility then purports to sell that
      power to its consumers as “green power.”

The utility is purchasing the wind farm’s null power. Charging a premium for this power
likely misleads consumers who believe they are purchasing the attributes of the “green
power,” when in fact those attributes have already been sold to another party.

   •	 10% of a utility’s total electricity load consists of null power from wind farms.
      The utility claims in advertisements that 10% of the power in its system mix is
      from renewable sources.

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The utility has not purchased the renewable attributes of the windmill’s power – therefore
its claim that it has renewable power in its system mix is misleading to its consumers.

   •	 A company with “behind the meter”(onsite) solar panels on its roof generates as
      much electricity as it uses, but sells the RECs from all of the electricity it
      generates. The company claims to be “100% solar powered.”

Because the company sells the attributes to the energy it generates it is using its own null
power. The renewable attributes of the solar panels are claimed by both the company and
the purchasers of its RECs. Therefore, the company’s express claim that it uses
renewable energy, and its implied claim to purchasers of its RECs that the renewable
attributes sold are not double counted, is misleading. A claim by such a facility that it
“hosts” renewable energy generation would not be misleading.

                       ii.    Implied claims giving rise to double counting

One or more of the claims to the attributes of a quantity of renewable energy that results
in double counting may be implied, rather than express.

   •	 A utility buying only null power puts windmills on its Web site or other corporate

Reasonable consumers will likely interpret pictures of windmills on a utility’s Web site
as a claim about the renewable energy it offers in its mix. Because the utility doesn’t
own the right to the attributes of the energy it sells, this claim is misleading.

   •	 A company that owns both wind farms and fossil-fuel fired generation facilities
      voluntarily reports its “carbon inventory” to a climate registry. The company
      sells the RECs for all of the renewable energy generated. In its report to the
      registry, the company doesn’t report any carbon caused by its renewable

By profiting from the null power without incurring its carbon cost, the company is
indirectly benefiting from the environmental attributes of the null power that have been
sold. Consequently, consumers purchasing RECs and/or power from this company may
be misled about the environmental attributes of the power they purchase. To avoid
double counting, generators and utilities reporting to carbon registries should assign the
carbon value of the average system mix to the null power they are reporting, or otherwise
adjust carbon reporting to account for the RECs sold.

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                           iii.     Regulatory double counting

The sale of RECs may constitute double counting if the underlying renewable energy is
being used to meet a regulatory requirement:

    •	 A utility is subject to a state portfolio standard (RPS) requiring that 10% of its
       power come from renewable sources, and buys power from a geothermal
       generation facility to meet this requirement. The geothermal facility
       simultaneously sells RECs for all the power it produces to another party.

The attributes of the geothermal generation facility are being counted both by the
purchasers of RECs and by the utility for meeting its RPS. Both purchasers of the
geothermal facility’s RECs and purchasers of power from the renewable generation
facility are potentially misled.

                           iv.      Double counting arising from old contracts

Some older contracts for the sale of power by renewable energy generators entered into
before RECs were an established commodity have been interpreted to include the
renewable attributes of the power sold.4 The sale of RECs based on power covered by
such a contract could result in double counting.

    •    A wind farm currently sells power to a utility under a contract signed in 1992.
         The wind farm subsequently begins selling RECs to another party in 2008.

To avoid double counting, seller must substantiate that the renewable attributes of the
power delivered to the utility were not included in the 1995 contract.

                  c.       Role of third-party verification and certification

Third-party verification and certification can provide a means for sellers of renewable
energy to substantiate express and implied claims about their product (e.g. that it meets
certain environmental standards and has not been double counted). The certifying body
must use competent scientific and accounting methodologies to verify that renewable
energy meets acceptable environmental standards and are not double counted.

    •	 A marketer sells renewable energy based on RECs generated by a solar-thermal
       facility. The sale of RECs are certified by an independent third party that requires
       that the facility that generated the RECs meet environmental standards widely
       accepted in the scientific and environmental community. The third-party certifier
       also enlists a certified public accountant to track the sale of RECs from the point
       of generation to verify that double counting did not occur.

  Modern contracts for the sale of power by renewable generation facilities generally specify whether or not
the environmental attributes of that power are conveyed to the purchaser of the electricity.

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Implied claims by the marketer about exclusive ownership of the attributes of the
renewable energy purchased and the environmental impacts of the underlying project are
unlikely to be deceptive.

Sellers of products certified and verified by a third party may represent to consumers that
their product is certified. The seller need not provide a detailed description of standards
and methodologies of the third-party certifier, so long as the consumer has a reasonable
basis to discover the standards of the certifying body (such as the URL to the third party
certifier’s website where such standards and methodologies are explained).

       3.      Claims by Companies about the Purchase and Use of Renewable Energy

Many companies wish to communicate information to consumers about the purchase and
use of renewable energy. Express and implied claims can convey information about the
quality and quantity of renewable energy purchased, and how that energy was used (e.g.
in general company operations, or in connection with the manufacture of a product or
conduct of an event). Useful guidance for companies seeking to make claims about their
renewable energy purchase and use is available on the EPA’s Green Power Partnership
website. See

               a.     “Energy” versus “electricity”

CRS believes that most consumers understand claims about the use of renewable energy
to mean renewable electricity, unless the direct use of liquid or gaseous fuels is a major
component of a company’s business.

   •	 A consulting company claims to use “100% renewable energy.” The company
      has purchased sufficient RECs to match 100% of its electricity use, but its
      consultants use gasoline-powered vehicles when visiting clients.

This claim is probably not misleading. Because the use of gasoline is not a major aspect
of the consulting company’s business, consumers would likely interpret this as a claim
about electricity used.

   •	 A shipping company claims to use “100% renewable energy.” The company has
      purchased sufficient RECs to match 100% of its electricity use but uses gasoline
      powered vehicles in its shipping operations.

Because the use of such fuels is a substantial portion of the shipping company’s total
energy use, consumers might interpret the shipping company to be making a claim about
total power (rather than electricity) usage. Therefore, this claim might be misleading.

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               b.      Claims about the characteristics of purchased renewable energy

                       i.      Environmental qualification of purchased renewable energy

Companies making claims about their purchase or use of renewable energy must be able
to substantiate that the renewable energy used meets consumers’ expectations of what
constitutes renewable energy (discussed above in Section II.B.2.a.). Companies making
claims may give information about the source of renewable energy (e.g. how the
renewable energy was generated, if the purchase was certified and verified by an
independent third party, and who it was purchased from), but omission of such
information will not make otherwise truthful and substantiated claims misleading.

                       ii.     Claims associated with onsite renewable energy generation

Companies with onsite renewable energy generation (e.g. solar panels) may convey to
consumers that some or all of their renewable electricity is generated onsite. If the
quantity of renewable energy generated by a company is on average greater than or equal
to its electricity use, that company may claim that 100% of the renewable energy it uses
is generated onsite (even if the company uses grid-based energy at times), provided the
company does not sell the RECs from the electricity it generates.

               c.      Statements about the manner in which renewable energy is used

                       i.      Implied claims of renewable energy use

Unless another meaning is apparent from context, inclusion in company materials or on
product packaging of pictures of items commonly associated with renewable energy
generation (e.g. solar panels or windmills), or the inclusion of a seal standing for
renewable energy certification, may constitute an implied claim that that company uses or
that product is made with renewable energy.

       •	 A financial company that does not use renewable energy prominently displays
          windmills on its Web site, without expressly claiming to use renewable energy.

Consumers could interpret this as an implied claim that the company uses renewable
energy in its operations. Therefore, this might constitute a misleading claim.

       •	 A manufacturer of solar panels displays pictures of the solar panels it sells on
          its Web site, without making any express claim about its renewable energy

In this context, it is unlikely that reasonable consumers would interpret the pictures of
solar panels as a claim about the use of renewable energy.

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                      ii.     Renewable energy claims on products

Companies sometimes wish to state that a particular product was made or manufactured
with renewable energy. Such claims are often placed on a product or its packaging. CRS
believes that consumers understand a claim that a product is manufactured with
renewable energy denotes that the product was manufactured or the parts were assembled
in a facility using 100% renewable energy.

       •	 A company claims that a product was “manufactured with renewable
          energy.” The company only purchased RECs to match half the electricity
          used in manufacturing the product.

This claim may mislead consumers, who could assume “manufactured with renewable
energy” means made with 100% renewable energy.

An express or implied claim about the use of renewable energy on the packaging of a
product will likely be interpreted as a claim about renewable energy used in
manufacturing the entire product, not just the product package.

       •	 A bottle of wine displays on its label a seal recognized to stand for the
          certification of renewable energy, without explanation. The paper on which
          the label is printed was milled in a facility using renewable energy; however,
          both the wine and the bottle were manufactured using non-renewable energy.

Display of the certification seal on the label of the wine bottle may mislead consumers,
who may interpret the seal as a claim that the product itself was manufactured with
renewable energy.

               d.     Statements about the “carbon value” of RECs

Companies sometimes characterize their purchase of renewable energy in terms of
“offsetting” greenhouse gas emissions. This is generally acceptable, so long as the
emission reduction value of the REC (using a ton per megawatt hour metric) is equal to
or greater than the emissions associated with the electricity consumed.

B.     Carbon Offset Comments

       1.      Overview of Carbon Offsets

A carbon offset represents a property interest in the right to claim responsibility for a
quantity of greenhouse gas either removed from the atmosphere or the emission of which
has been avoided. Like a REC, a carbon offset is an intangible, fungible commodity that
can be resold until it is retired (used) by an end user making a claim about (i.e. taking
responsibility for) the reduction or avoidance of a quantity of greenhouse gas emissions.

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A wide spectrum of projects can provide the basis for the sale of carbon offsets, including
renewable energy projects, carbon sequestration, methane gas flaring projects, forestry
projects, and many others.

Similar consumer protection issues arise from the selling of carbon offsets as arise from
the selling of RECs.

       2.      Substantiation of Claims Made by Sellers of Carbon Offsets

As with RECs, sellers of carbon offsets make express and/or implied claims (1) about the
environmental and scientific benefit of the offset – i.e. that the project underlying the
offsets sold will actually cause the promised reduction of greenhouse gas emissions, and
(2) the offset will not be double counted or double claimed. Consumers may be mislead
if the seller of a carbon offset is unable to substantiate either of these claims.

               a.      Claims about environmental benefit and additionality

Sellers of carbon offsets must be able to substantiate that the promised reduction in
greenhouse gas emissions has or will occur. The seller must be able to produce
competent scientific evidence that the project yielding the offset has caused reductions in
greenhouse gas emissions that are real, measured, permanent and verified.

The seller must also be able to substantiate that the emission reductions are “additional,”
meaning that the project underlying the greenhouse gas emissions reductions is beyond
business as usual for its particular industry/sector, in that it was facilitated by the market
for carbon offsets and/or would not have been completed absent a desire to curtail
greenhouse gases in the atmosphere.

                       i.      Offsets produced by renewable energy generation

A question raised at the Workshop was whether renewable energy generation facilities
can be the source of carbon offsets. This is not a controversial issue.

It is universally accepted that the generation of renewable energy can displace and reduce
the emission of carbon and other greenhouse gases. All of the major internationally
recognized offset programs, including the United Nations’ Clean Development
Mechanism of the Kyoto Protocol, the Gold Standard, and the Voluntary Carbon
Standard allow renewable energy generation projects to serve as the basis for offsets, as
does CRS’s Green-e® Climate Renewable Energy Protocol, developed through a
rigorous process of nearly two years, which included an expert advisory group and five
public stakeholder comment periods. These offset programs have defined rules for the

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recognition of offsets from renewable energy projects in regions with no mandatory
greenhouse gas emission caps or similar policies in effect.5

RECs are not “carbon offsets” in and of themselves. However, they are an essential
component of the process for measuring and verifying the amount of greenhouse gasses
offset by renewable energy projects.

Sellers of offsets evaluating whether a particular renewable energy project can generate
offsets must determine whether such a project is “additional” to the market for carbon
offsets – that is, is the project beyond business as usual? If the answer to this question is
yes, the renewable energy project can serve as the basis for carbon offsets, provided the
greenhouse gas emissions reductions attributable to the renewable energy generated are
not double counted. If the answer to the question is no, the project is not additional, and
the sale of offsets based on such a project would be inappropriate.

There is debate among the policy and scientific community about the best methodologies
to quantify greenhouse gas reductions, and about the design and application of specific
tests to assess additionality in a variety of industry sectors, including agriculture, forestry,
industrial fuel switching, energy efficiency and renewable energy. CRS supports
ongoing collaborative discussions among organizations that have expertise in these areas
to further the science, auditing, administrative, contractual, and policy tools used in these
endeavors. However, CRS, along with several other panelists at the workshop, believes
that there is no basis to question the widely accepted fact that renewable energy facilities
can be a source of carbon offsets, if additionality requirements are met and there is no
double counting of the emission reduction attributes.

                  b.       Claims about exclusive ownership of carbon offset

Sellers of carbon offsets make an implied claim, which must be substantiated, that the
offsets sold are transferred exclusively to purchaser and have not been double counted.
As with RECs, double counting occurs any time the benefit of an offset is directly or
indirectly claimed by more than one party.

                  c.       Third-party certification can be a means of substantiation

As with RECs, sellers can engage in a third-party certification process to substantiate
their express and implied claims about the environmental and scientific benefit of the
products they sell, and about the exclusive transfer to purchaser of all interest in the
offset. Assuming certification/verification was conducted by a respected, independent
third party, third-party certification provides sellers a reasonable basis for claiming that
their carbon offset products are additional and not double counted.

 In regions with greenhouse emission caps on the electricity sector, the ability of renewable energy
generators to claim emission reduction benefits will depend on the specific rules of the policy in effect. For
example, states may enact rules permitting such claims under the Model Rule of the Regional Greenhouse
Gas Initiative agreed to by ten states in the Northeastern United States.

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       3.      “Carbon claims” by companies

Many companies seek to make claims about their “carbon footprint,” or “carbon
neutrality” (or the carbon neutrality of a particular product or event). Reasonable
consumers likely understand that a company making such an assertion has calculated its
total carbon inventory (the quantity of carbon and other greenhouse gas emissions
attributable to the actions of that company), and purchased an amount of carbon offsets
equal to this amount.

                             III.   CLOSING REMARKS

In closing, CRS would like to thank the FTC for this opportunity to provide comments in
these areas. We are very supportive of the FTC’s consideration of consumer protection
issues around renewable energy and carbon offsets. CRS relies on guidance from the
FTC in our own consumer protection guidelines in the Green-e® Energy, Green-e®
Climate, and Green-e® Marketplace programs. Similarly, we feel because of our
experience in these markets, we can offer insights into the challenges and opportunities to
effectively communicate the value and meaning of renewable energy and carbon
reduction products to consumers.

Additional issues relating to consumer protection arising from the sale or purchase of
renewable energy or carbon offsets may be brought to the attention of CRS as it
administers its certification programs. CRS may bring such issues to the attention of the
FTC through comments submitted in connection with the FTC’s general revision of its
Guides for the Use of Environmental Marketing Claims.

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                     Appendix A

      Carbon Offset Workshop—Comment No. P074207
Appendix A to the Comments of the Center for Recourse Solutions
                    Appendix A: Overview of Green-e® Energy, 

                   Green-e® Climate, and Green-e® Marketplace 

The Center for Resource Solutions administers three programs that address claims made
in connection with the purchase and sale of renewable energy and carbon offsets: the
Green-e Energy program, the Green-e Climate program, and the Green-e Marketplace
program. Complete information about these programs is available at

A.     Green-e® Energy

The CRS Green-e® Energy certification program certifies and verifies the sale of
renewable energy products. CRS ensures that wholesale and retail renewable energy
products meet environmental and consumer protection standards developed in
conjunction with leading environmental, energy and policy organizations. These
standards include the following:
    •	 The definition for a qualifying renewable energy resource or technology.
    •	 The generator that produced the renewable energy was built in or after 1997.
    •	 The consumer is the only one that can claim the benefits of the renewable energy
       purchased (no double selling).
    •	 The renewable energy purchased by the consumer was not built to comply with
       government requirements (such as an RPS).
    •	 Sellers of renewable energy products provide clear disclosure of essential
       information to potential consumers, allowing consumers to make informed
       choices about their renewable energy. Required disclosures include:
           o	 The price, terms and conditions for the renewable energy option;
           o	 A Product Content Label for the certified renewable energy option, which
               identifies the renewable resource type they supply (such as wind or solar)
               and the geographic location of the renewable energy generator.

Green-e® Energy certifies the sale of three types of renewable electricity products:
renewable energy certificates (“RECs”), renewable energy offered through a utility’s
green pricing programs (through which end-users are charged a premium for renewable
energy) and renewable energy sold through competitive electricity programs in a de­
regulated market.

B.     Green-e® Climate

CRS will launch Green-e® Climate in early 2008 after a development process of nearly
two years, which included an expert advisory group and five public stakeholder comment
periods. Green-e Climate will certify and verify the sale of greenhouse gas emission
reductions, measured in tons, sold in the voluntary market. Green-e® Climate will verify
that certified GHG emission reductions products contain only real, measured, permanent,
verified and beyond business-as-usual (i.e. “additional”) GHG emission reductions.

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                                   Page 1 of 2 

To verify that certified GHG emission reductions meet the above requirements, Green-e®
Climate will enlist the expertise of a limited number of endorsed programs that have
developed rigorous scientific and environmental standards. In addition, Green-e®
Climate has developed its own rigorous protocol setting forth requirements for GHG
emission reductions based on the generation of renewable energy (the Green-e® Climate
Renewable Energy protocol). Sellers of products certified by Green-e® Climate must
demonstrate that the GHG emission reductions they sell are either certified by one of the
endorsed programs, or (for projects based on renewable energy generation in the United
States) qualify under the Green-e® Climate Renewable Energy Protocol.

In addition to enforcing environmental standards, Green-e® Climate verifies that the
quantity of GHG emission reductions sold by a seller or generated by a project do not
exceed supply. Green-e® Climate also ensures that disclosures to consumers are accurate,
complete and follow program guidelines. Required disclosures include:
    •	 the nature of the project yielding the GHG emission reductions (energy efficiency,
        renewable energy generation, forestry etc);
    •	 the location and implementation date of the project;
    •	 the date the GHG emission was generated or certified;
    •	 the program certifying the project; and
    •	 price, terms and conditions of the GHG emission reductions.

Green-e® Climate is intended to complement—not replace—mandatory GHG emission
reduction regulations.

C.         Green-e® Marketplace

Through the Green-e® Marketplace program, organizations purchasing or generating
qualifying amounts of renewable energy can license to use the Green-e® logo on
company materials, advertising materials, and (in some cases) on product packaging, to
communicate to consumers their commitment to renewable energy the marketplace. To
qualify to participate in Green-e® Marketplace, organizations must purchase or generate
a sufficient percentage of their total electricity use with renewable energy.1
Participating companies may also license to use a Green-e® mark on specific product
packaging, or in connection with a specific event, if that product or event was
manufactured or operated with 100% Green-e® certified renewable energy.

    The required percentages match the requirements of the EPA Green Power Leadership Club.

                     Carbon Offset Workshop—Comment No. P074207 

               Appendix A to the Comments of the Center for Recourse Solutions 

                                       Page 2 of 2 

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