Ethics and “Green Tags”

From BusinessWeek Online, It’s A Little Easier Being Green: Consumers and companies are giving alternative energy a boost with “green tags”

Martin Hughes is not your typical hybrid-driving, clean-energy fanatic. Hughes and his wife, both longtime oil-industry veterans, zoom around Houston in no-compromise vehicles. His, a Nissan Xterra SUV. Hers, a zippy Volkswagen Passat.

Yet when Hughes heard last year about an environmental startup called TerraPass Inc., he was intrigued. The Menlo Park (Calif.) company sells “green tags,” which cost up to $80 a year and which are designed to offset the emissions a car spews into the air during that period. After taking a small cut of each sale, TerraPass pools its members’ fees and invests them in clean energy production, including wind power. Hughes checked out the service online last August and then forked over $129 for two TerraPass windshield decals. “I was impressed,” he says. “It’s a for-profit product that allows you to exercise your conscience.”

The story goes on to explain that companies all over the U.S. are buying “green tags” as a way of offsetting their energy consumption.

Green tags have several ethically interesting features.

  • First, they allow polluters (direct or indirect) to avoid taking direct action to reduce their own pollution. That is, rather than actually changing their behaviour, companies can now buy green tags (most of the price of which goes to getting other companies to change their behaviour.) Some will find this feature offensive.
  • Second, this is an effective strategy, in terms of reducing pollution. If we care about promoting good outcomes (and not just about who takes the blame for what), then green tags seem like a good idea.
  • Green tags seem to make the most sense where it’s more efficient for a polluter to buy someone else’s reduction in pollution than to cut its own pollution…which will be the case wherever there are serious technological or practical barriers to changes in consumption. So, for example: an urban SUV driver paying $800 for a green tag to support a local bicycle co-op is simply off-setting pollution that she arguably doesn’t need to emit in the first place. On the other hand, a small-business owner who needs an SUV, and who donates $800 to the bike co-op rather than spending thousands to switch to a hybrid SUV is doing something good.
  • The idea of a “tag” is crucial. A simple green “credit” would do just as much immediate good: a company like Starbucks could simply pay for someone else’s energy-consumption, feel good about it, and leave it at that. But a “tag” (or certificate) has the additional feature of allowing the company to show the world the good it’s doing. In some cases, this will mean getting credit where credit is due. Sometimes it will mean something closer to greenwashing. But it’s a new dimension along which to evaluate corporate behaviour. It’s time for everyone interested in evaluating corporate behaviour to start getting literate in the language of green tags.

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