Part: 1, 2, 3

Branding Green

Chris Erikson and Michel Gelobter have a big idea: a product that promises to unleash the power of American capitalism in the fight against global warming. The Bay Area entrepreneurs are hustling to launch a credit card that aims to neutralize carbon emissions released in the production of just about anything we buy, from blue jeans to an airplane trip. When consumers' purchases put greenhouse gases like CO2 into the air, Erikson and Gelobter will create "carbon offsets" - projects that claim to take an equivalent amount of CO2 back out. In the lexicon of the emerging green economy, Erikson and Gelobter are offering consumers a path to a "carbon-neutral" lifestyle.

Going carbon-neutral is built on the fast-growing trade in carbon credits, a global market spurred by the Kyoto Protocol - the international agreement to cut greenhouse gases that contribute to global warming. Under Kyoto, companies that exceed caps on greenhouse gases can buy carbon credits directly from other firms that are short of their caps. Companies are also allowed to invest in projects in poorer countries that reduce emissions. While much of the current carbon market is dominated by heavy industries and power companies, Chris Erikson says other businesses and consumers are vying for a bigger role.

"If our customers start voting with their pocketbooks," says Erikson, "then in fact, the natural economic forces of the capitalist system will kick in, and businesses and manufacturers will begin to aggressively transform themselves."

Erikson and Gelobter take their idea to Lexicon, a branding company that created names for icons such as Pentium, Blackberry and Powerbook. In an understated office nestled in the hills above San Francisco Bay, Gelobter and Erikson tell Lexicon president David Placek that their aim is to attract customers who do not see themselves as environmentalists. Placek responds that the idea has to be simple.

"I think your biggest challenge," he tells the group, "is getting people to understand what this really does. Make this very tangible. You say, 'Okay, if you buy a cup of coffee, to offset it, we're going to plant a tree.'"

"I think you're exactly right," says Erikson. "People don't get it."

"You buy a cup of coffee. It takes hot water," says Gelobter. "The beans have to be shipped across the world. That all adds up. You know, as much as we love coffee, that adds up to an impact on our planet."

"You have to set up the fact, 'Let's think about that cup of coffee,'" says Placek, "because nobody thinks about coffee. 'Well, let me just show you Juan Valdez over here who's planting that tree today in Costa Rica. And every time you walk in here and buy a cup of coffee from Starbucks, Juan is going to plant a tree for you.' Now I'm going, 'Well, this is pretty cool.'"

"If cool can be cool," says Erikson, "that's one of our marketing objectives for sure."

Hundreds of companies are branding themselves green as concern over global warming reaches the American mainstream.

"There's going to be a huge scramble in this marketplace for ecological something, anything," Placek says. "From credit cards to fuels to organizations to solar energy, everybody [is] making claims. So, there's going to be a lot of sincere people, perhaps some insincere people along the way."

Weeks later, Chris Erikson and Michel Gelobter gather in their Oakland offices to pour over a list of 43 names developed by Lexicon. Among them:

Green 2.0
Green Side
Triple Green
Green Silk
Verion
Seven Across
Change Point
Zift
Wix
Xeel
Biom
Cooler
Capital G.

Erikson and Gelobter settle on "Cooler."

"We could call our products Cooler," says Erikson, "like 'the Cooler Card,' 'Cooler Shopping,' 'Be Cool.'"

"Cooler inside," suggests Gelobter.

"Be a climate cooler," says Erikson. "I think it all works."

Shopping with the Green Card

Europe signed on to Kyoto while Washington rejected the treaty. So U.S. innovators like Gelobter and Erikson are playing catch-up. It's no surprise that European companies dominate the booming carbon trade. An offshoot of the carbon trade is the retail market in carbon off-sets. While retail offsets follow the Kyoto guidelines, many are unregulated, relying on voluntary standards and third-party verification. In 2004, a Dutch company called Tendris tapped into the retail offset market by launching the world's first green credit card. To test the promise and pitfalls of carbon offsets, we went to Amsterdam to follow the trail of Tendris's GreenCard.

We meet up with Gijs Zijlstra, his wife Margreet Jelsma and their 10-year-old son Abe as they're shopping for gas, clothes, and some books and chocolate. The family is armed with their Tendris GreenCard.

At a clothing store, Zijlstra buys a pair of jeans and a t-shirt. When he presents his GreenCard to the clerk, he explains how it works. "The only difference with this credit card is that it compensates the carbon dioxide that is emitted for the production of the products that we have bought," he says.

The clerk tells Zijlstra she hasn't seen a green card before, adding with a laugh: "So actually you have to buy more and more and more for a better world."

To make for a better world, GreenCard claims to do two things for Zijlstra and his family. The company uses a complex algorithm to estimate the amount of carbon emissions, or "carbon footprint," created in each purchase. Then it neutralizes these emissions through carbon offsets. Amber Nystrom of Tendris tells us GreenCard removes carbon from the air by having trees planted. "So we would be taking a small percentage of the money generated in that financial transaction and investing that in preserving a tree that would cleanse that CO2," she says.

GreenCard's big draw is offering to neutralize carbon emissions at no charge to customers. Tendris partner Warner Phillips explains that the issuing bank sees this as a promotion, just like offering free airplane mileage, to attract new customers who will spend more and stay with the card longer.

"We don't charge you for offsetting," Phillips says. "And it's relatively easy to get the credit card. You just sign up. It's like a credit card. It is a credit card. So we're making it very easy and attractive for people actually to contribute."

So, are carbon offsets are really just a way of absolving people of the sin of polluting the air?

"I think it works for a lot of people to relieve their guilt feeling by using this credit card," Phillips says. "Because people want to contribute. But, they also want to have the good things in life."

Counting Trees

During their shopping trip, Zijlstra and his family put 180 Euros (over $200) on their GreenCard. Back at home, the family hits GreenCard's Web site to count the number of trees the credit card company promises to plant as carbon offsets.

"Now let's see how much carbon we're compensating," says Gijs. "Log in 'Visa.' There we go. What you can see here is the CO2 credits this month. 427 this month."

"What does that mean, 427?" asks Margreet.

"That's a good question," replies Gijs. "This says 16 credits equals one tree. OK?"

"That's clear," says Margreet.

According to a formula provided by GreenCard, Zijlstra calculates that at least four trees would be planted to compensate for his day's purchases. "Well, that's not too bad," he tells his wife. "We had a good day. We saved the Earth."

Carbon offset schemes like the GreenCard compensate for a carbon-rich lifestyle. But offset companies say their real aim is to coax consumers and businesses to switch to a low-carbon diet. Gijs Zijlstra says GreenCard has opened his eyes. "It makes you aware that you are emitting CO2 even when you just buy a beer in a bar," he says. "Making people aware is the first step in solving it."

Advocates of carbon offsets say Zijlstra is taking a first step toward a carbon-reduced lifestyle. Eventually, they say, he might drive less, buy green products and demand environmentally-sound policies from elected officials. But does knowledge really change behavior? Tendris' Warner Phillips concedes that the jury is still out on his GreenCard.

"If we look at the customer base that we have which includes a lot of families, it appears to be people that want to do something about their responsibility," Phillips says. "But we do not have concrete proof that they've actually changed their lifestyle, take the airplane less or if they've shifted from car travel to bike travel."

The GreenCard statement allows the Dutch family to calculate how many trees are being planted to compensate for their day's carbon emissions. But it doesn't say exactly where the trees are planted or by whom. Nor does it say who is getting paid by the credit card company to plant the trees.

Continue to part 2