RUTH CALLARD< Certified Public Accountant
 
Making sense of numbers  

 

Ruth E. Callard, CPA, MBA
608 NE 63rd St.
Seattle, WA 98115
tel: 206-284-4163
fax: 206-632-7445
click to email

Carbon Offsets

I am making a continuous effort to reduce the environmental footprint of my business. You have been a part of this effort by receiving your tax returns electronically and by sending in original Green Tagdocuments rather than copying them.

I have purchased Carbon Offsets to offset my energy use that I currently can't eliminate - largely utilities and consumption of office materials.

To make the most helpful impact on the environment, I try to practice conservation. For example, I use less paper and toner than I used to. Conservation is better than the purchase of Carbon Offsets because the effect is direct, immediate and ongoing.

I am always interested if you have ideas about how my business can be more sustainable.

How Carbon Offsets work — anyone can participate
Pearl Jam  is carbon neutral!

Perhaps you want to use electricity from renewable energy sources like wind, solar, and the less favorable, hydropower. Your local utility provider only generates a minority of its energy from renewable sources. The majority of its energy comes from fossil fuels like coal and natural gas.

Let's say your cost for electricity is 7 cents per kWh (kilowatt-hour).

A supplier in Texas is interested in producing electricity from a wind farm. Currently it costs more to generate energy from wind so the supplier will need to charge 7.5 cents per kWh. (Renewable energy sources are a bit more expensive to produce and they are less subsidized (a) by our government.)

wind powerThis wind power supplier will be credited with one Carbon Offset for every 1000 kWh of energy it produces. These Carbon Offsets allow us to place an economic value (.5 cents in this case) on the environmental benefits of renewable energy. Carbon Offsets are sold on the open market (b).

The wind power supplier will sell energy to their customers for 7 cents per kWh. They get the extra .5 cents per kWh from your purchase of a Carbon Offset. You are subsidizing the production of renewable energy while you are offsetting your consumption of non-renewable energy.

Any individual or organization can buy Carbon Offsets to offset their share of carbon emissions created from polluting, non-renewable energy sources. You can go to many non-profit websites, one of which is the Bonneville Environmental Foundation or CarbonFund. These sites will help you to make a calculation to indicate how many Carbon Offsets you would need to buy to offset the part of your energy use that pertains to your transportation and home energy use.

solar powerIf you wanted to buy offsets for all of your energy use, including the use that relates to things you eat , wear, furnish your house with, the roads on which you drive, the hospitals, the streetlights, etc., the CarbonFund website offers an estimate; you can multiply the carbon emmisions that relate only to your transportation and home energy use by 2.5 to estimate your total energy use.

a) Many of the costs incurred in producing non-renewable energy are not included in the cost of the product but are 'externalized', or paid for by our whole society. For example, there are many health and environmental costs related to the production and use of fossil and nuclear fuels. Also, our government directly subsidizes liability insurance for the nuclear industry. The true cost of managing nuclear waste is not included in the price of nuclear power. See Grist Magazine article.

b) Purchasing Carbon Offsets is currently, for the most part, voluntary in the United States but in many countries users of non-renewable energy must buy Carbon Offsets to offset the carbon emissions that they create.

For a great website for all of your environmental questions, see Grist Magazine.