Passing Popularity?
TerraPass becomes the popular – or unpopular – face of eco awareness
Any three year old company whose mission is to reduce carbon emissions and who has gained such a foothold as to become a household name throughout the U.S., not just among the environmentally-conscious, would certainly deserve a spot among the startups profiled here. But its exposure – and even some adjacent controversy – has ensured that there is little that I can reveal about this particular young company that the New York Times of USA Today hasn’t already. The company is TerraPass.
Though there are certainly other companies in the carbon offset business (NativeEngergy and Carbon Fund, for example), TerraPass has taken the lead, at least in terms of visibility. If you ask the average consumer if he’s ever used carbon offsetting services, you’ll likely get a confused stare. If you ask him about TerraPass, he’ll say, “Oh, that environmental thing on Expedia?”
Founded in October of 2004, TerraPass has now sold more than 50,000 carbon offsets – essentially certificates that assuage carbon-induced guilt for travelers. TerraPass matches the amount of carbon emissions its customers produce with a given activity (such as flying to New York or driving an SUV for a year) with a TerraPass coupon that will pay for the same amount of energy produced in a renewable way. So, for instance, an $80 TerraPass pays for a wind turbine somewhere in South Dakota and lets you buy gas for your SUV all year sans guilt. For tree huggers, the idea is now passé, but its penetration into popular culture is a milestone for any green company. This year, celebrity gift baskets at the Oscars were replaced with crystal teardrop trophies and TerraPasses worth 100,000 pounds of carbon emissions.
Recently, TerraPass and its entire industry has seen controversy. Though everyone agrees it’s a good idea, no one seems to agree on how to pursue the idea. There are no regulations on how to arrive at the right dollar amounts for carbon-emitting activities, for instance. And there is the fact that TerraPass is a for-profit company that has refused to release details of its bookkeeping, citing competition as the reason. Though the company insists that each alternative energy purchase it makes is independently verified, some consumers are still wary of the “for-profit” tag.
The question with voluntary carbon offset companies seems to be one of balance. On one hand, will the problems like oversight mentioned above keep them from being successful? On the other hand, will they become so successful, and alternative energy so popular, that they essentially work themselves out of an industry?
There seems to be a pretty wide gap between those two ends of the spectrum. In the meantime, TerraPass is enjoying popular success that is very rare for most green startups. After all, you won’t find a crystal teardrop from Hanger Network on Al Gore’s mantle.
Tuesday, July 17, 2007
