The California Senate earlier this week overwhelmingly passed legislation that would make it unlawful for anyone to advertise or promote the sale of greenhouse gas credits or emission reductions to the public unless the credits or reductions meet one or more of the following criteria:
(1) it has been approved by the State Air Resources Board;
(2) it complies with protocols adopted by the California Climate Action Registry;
(3) that it is:
(a) quantifiable and measurable;
(b) it is surplus and in addition to any greenhouse gas emission that would otherwise occur;
(c) it is verifiable by a state or local California agency;
(d) it does not result in an increase in the emission of criteria pollutants or toxic air contaminants, and it does not result in adverse environmental impacts, including impacts on species, habitat, ecosystems, land use, biodiversity, air quality, water supply and quality, access to food and production of food.
Under the law any individual would be entitled to bring a civil cause of action for a violation of the statute.
The proposed bill raises at least two interesting questions. First, is this the beginning of the balkanization of offset and emissions reduction advertising claims regulation? If other states follow suit but adopt slightly different regulations national advertisers may find themselves trying to comply with multiple, inconsistent standards. The proposed bill's focus on California specific criteria and protocols is not a good sign in that respect. Similar circumstances led the FTC to adopt its initial green guides back in the early 1990s. Second, what does it mean that a greenhouse gas credit has no "adverse environmental impacts?" Is it net adverse impact or any adverse impact whatsoever. If the former, how do you balance out, for example, a reduction in carbon emissions against the impact on an endangered species. If the latter, how can you ever demonstrate that any activity has no adverse environmental impact. For example, if you plant trees on what was formerly farmland as part of a carbon offset haven't you arguably impacted food production? The FTC's caution in its green guides that claims of general environmental impact are likely to be misleading seems appropriate here.