Business

Carbon offsetting: the answer to all our consumer problems- or just good marketing?

15:58 pm on 13 September 2018

Ben and Jerry's has an ice cream shop in London where at the till along with your scoop of 'cookie dough' or 'karamel sutra', you're asked if you want to save the planet.

Photo: 123RF

With each ice cream scoop sold Ben and Jerry's donates a penny and the customer is asked if they want to donate one too, to offset their carbon 'scoop-print.'

This money is transferred via blockchain-enabled carbon credits to projects which plant trees, fund wind farms and support hydroelectric power.

Could this be a new way to balance the environmental cost of consumer goods?

Dr Bodo Lang Head of the Marketing Department at the University of Auckland Business School explained how it depends on what you're asking for.

"It's not quite so much what it is that you're selling but I think it's the value of the transaction and how big the carbon footprint is that you're trying to offset."

"If you look at a $4 cup of coffee where you're paying $0.02 extra to offset the carbon footprint, my feeling is very few people would budge at that. But paying an extra $50 on a flight to offset your carbon footprint? Most people wouldn't do that."

"I think it can work however," he says, "What it does is increase the authenticity of the brand because it's not just words but actually actions behind that as well. I do think it's limited to certain types of products and certain types of transactions."

I asked Dr Lang if it should be the consumer's problem? If most people are baulking at paying extra for the carbon footprint of a product or service, should the onus be put on the business to sort out their environmental impact?

"Ultimately the onus will always be in some way or shape on the consumer."

"If a business engages in more sustainable practises that tends to result in higher operating costs and therefore that will be passed on to consumers resulting in higher prices. It's certainly a great thing if companies give consumers the option because if consumers haven't got the option then there's nothing we can do about it. It's very important that companies take this option and present it to consumers and they can then make their choice as to whether they want to follow it."

Dr Lang says the answer to the problem of competitive pricing could lie in industry collaboration, "if a whole category of manufacturers or service providers were to get together and say 'look, collectively this is what we're causing, why don't we all do 'X'? Then nobody is at a relative priced disadvantage."

This kind of industry collaboration goes against the grain in a competitive market place but there is a growing trend for businesses trying to be more openly sustainable as consumers demand changes.

"It is 2018 and I think most companies would have smartened up enough to realise the impact on the environment and to just to pull a publicity stunt without real muscle behind it, financial or otherwise, would be a really risky thing to do. I think companies that embark on that journey would be quite serious about it."