PG&E Drops the Curtain on Struggling Carbon Offset Program

PG&E Drops the Curtain on Struggling Carbon Offset Program

Pacific Gas and Electric Company's consumer-facing carbon offset program, once billed as the nation's first voluntary protection program, will wrap up in December after a four-year run that fell short of initial expectations.

Launched in 2007, ClimateSmart gave the utility's customers the option of buying carbon offsets to neutralize the greenhouse gas emissions generated by their energy use. It began as a three-year program but was extended to the end of 2011.

PG&E described the program on its website as a successful one that met its core goals for educating consumers, reducing emissions, testing protocols and supporting the nonprofit now known as the Climate Action Reserve. The program, however, also failed to meet some of PG&E's original expectations.

When announcing the program in 2007, PG&E anticipated collecting roughly $20 million for the program in its first three years, to be directed at projects that would reduce carbon dioxide emissions by about two million tons. Instead, the program pulled in about $10 million over four years, the San Francisco Chronicle reported Friday. Total emissions reductions clocked in at about 1.3 million metric tons. Participating PG&E customers never exceeded 31,000, far below early predictions of nearly 170,000 ClimateSmart customers.

Gary Gero, president of the Climate Action Reserve, said PG&E showed "true leadership" by launching the program when the carbon market faced much greater uncertainty than it does today.

"As a result, ClimateSmart was important in demonstrating that carbon offsets could have real benefits to the environment and to local communities," he wrote in a statement provided to GreenBiz.com. "And by demanding rigor in the projects in which it invested and by supporting the work of the Climate Action Reserve, it helped promote the concept of quality offsets throughout the voluntary market."

But the program was met with criticism almost immediately from some who questioned why the utility would push forestry offsets instead of selling green power to its customers. Others urged consumers to skip the program, citing the program's high marketing costs and other issues.

Earlier this summer, California Watch, part of the nonprofit Center for Investigative Reporting, alleged potential double-counting because ClimateSmart was supporting forestry projects it said were already protected. PG&E disputed the findings, insisting that without contributions from the ClimateSmart program, the forest in question would be have been forced to double its timber harvesting.

Curtain illustration via Shutterstock.