Green Marketing Review Is Put on Fast Track at FTC
Tuesday, November 27, 2007
The Federal Trade Commission said it would accelerate a review of its decade-old "green" marketing guidelines because of the booming number of businesses that are persuading customers to purchase certificates or pay premiums to help pay for projects or practices that purportedly benefit the environment.
The FTC, which was scheduled to review its guidelines in 2009, said that on Jan. 8, in the first of a series of public meetings, it would examine carbon offsets and renewable energy certificates that claim to reduce greenhouse gas emissions in one place to offset emissions elsewhere.
"We're responding to a current increase in green advertising claims," said FTC spokeswoman Jackie Dizdul. "We've been studying the marketplace, and a lot of companies are making green marketing claims. The last time our guidelines were updated was in 1998, and obviously a lot of things have changed since then."
An enormous variety of companies now make such claims. They include local utilities that charge premiums to subsidize wind power as well as car-rental companies and online marketers that sell certificates whose proceeds are said to pay for projects to reduce greenhouse gases. Other firms say they use premiums to plant trees, burn methane to convert it to less potent greenhouse gases, boost recycling or use so-called sustainable materials.
In a $55 million market that is largely unregulated, however, other companies have taken measures whose benefits are questionable. Some offsets support projects that would have gone forward anyway. Others promise results that are difficult to measure.
After holding hearings about carbon offsets this year, Rep. Edward J. Markey (D-Mass.), chairman of the House Select Committee on Energy Independence and Global Warming, asked the FTC to review its guidelines. "As the opportunity to profit in this sector attracts more players, the potential for marketing claims to misleadingly portray the offset products in question also grows," he said in a letter to the FTC over the summer.
Yesterday Markey said that "the FTC is taking a positive step by responding to Congress's call for more oversight on carbon offsets."
"We think it's important for the sake of consumer confidence to begin to create some guidelines that people can count on," said David Moulton, chief counsel of the select committee.
"The market is really exploding and relatively unregulated, so there's the potential for scam artists to move in and take advantage of people," Mouton added. "We don't want that to happen because we think that offsets are a valuable activity and we want to make sure that it has integrity. When people pay for reductions in emissions, they should get what they pay for."