All About the Visa GreenCard: RePay Your Carbon Emissions
April 10th, 2007
The race is on for organizations and corporations to erase their carbon footprints with carbon offsets. While larger businesses can maintain budgets to promote these programs, you might wonder how you — as an individual — can contribute to this offset craze and still remain frugal. In most cases it takes money to become carbon neutral, especially if that carbon footprint is larger than King Kong’s.
One way to offset your individual footprint is to choose to use green products, or products produced by companies who embrace a carbon reduction philosphy. And what better way to make those purchases than through a credit card that’s so green that it’s made from corn instead of plastic?
The Visa GreenCard is the first card that offers consumers the option to purchase via green credit. Tendris Holding B.V. launched this card card in the Netherlands in 2004, and this company is now working with Bank of America to bring this green option to U.S. consumers. But, before you hug a tree with joy about this development, you might want learn more about how carbon offsets work and, eventually, whether this card is right for you. If not, we’ll offer you some alternatives.
Carbon Offset Issues
Carbon offset options provide individuals and organizations the opportunity to reduce their CO2 emissions. One way to minimize a carbon footprint is by reducing actions that produce CO2 emissions. Another route is to replace items that produce emissions with new options that reduce energy impacts. Finally, carbon emissions can be displaced by actions that nuetralize carbon footprints with carbon offsets. These displacement options vary from renewable energy to energy efficient practices, but tree planting — or reforestation — currently represents the most common CO2 displacement practice.
For example, say that a company produces 10,000 tons of CO2 per year and that the government has placed a cap on that company for 8,000 tons. The company must then purchase carbon credits to offset that extra 2,000 tons per year . Say that 2,000 tons requires the purchase and planting of 46 trees. The company can equate that output to a trade that supposedly "erases" their pollution. Carbon credits can be exchanged between businesses or bought and sold in international markets at the prevailing market price. The Chicago Climate Exchange and the European Climate Exchange currently represent the only two international exchanges for carbon credits.
Basically, the tree-planting offset has turned into a market based upon monetary values.
So, while tree planting might resonate with your inner Johnny Appleseed, many environmentalists disagree with the basic tenets behind this practice. George Monbiot, an English environmentalist and writer, has criticized tree planting in his book, Heat: How to Stop the Planet From Burning. He has compared carbon offsets to the practice of purchasing Indulgences during the Middle Ages. People with money could purchase forgiveness for their sins rather than confess and change their ways. And, while Monbiot admits that offset programs measure carbon impacts with trades that are verifiable, he states that the companies that use these programs suffer from complacency, political apathy and self-satisfaction with the statement, "You cannot buy the survival of the planet."
The absence of any adequate market regulation or standards in this new industry illustrates how volatile this market can become. The Economist stated in February that, "Unless they [carbon credits] are implemented under a cap-and-trade system, these sorts of environmental efforts are plagued by something called the rebound effect, which is to say that using more efficient technologies causes the price to fall, which causes people to use more of the carbon-emitting substances in question."
This phenomenon recently was illustrated by Professor Catrinus Jepma of the University of Amsterdam, who warned that both the EU’s Emissions Trading Scheme and the UN’s Clean Development Mechanism were in danger of failing. The prices used for carbon credits under both schemes now are predicted to reach just a few cents. According to Green Business, the price for carbon credits is already below one euro, which means that there is little incentive for firms to cut emissions. Why bother when it’s less expensive for these companies to buy into credits to offset pollution?
One other controversy within these offset programs includes the question on whether offsets actually meet proclaimed goals. In March this year, BusinessWeek revealed that the carbon offsets gifts that Vail Resorts and a Seattle power company offered to presenters and performers during the 2007 Academy Awards amounted to little more than feel-good hype. The problem, according to Randy Udall, director of the Community Office for Resource Efficiency (CORE) in Aspen, is that consumers don’t know what is used to offset carbon emissions, let alone how, when, or where carbon credits are used. Therefore, these credits amount to little more than "vaporware."
On the other hand, no authoritative studies have been performed to date that concern offset buyers’ behaviors. Would companies take other measures to reduce their CO2 output if these credits weren’t available, or is it business as usual with salvation offered through payment to companies like Tendris Holding’s RePay International to offset their pollution?
About Tendris Holding B.V.
An online search for the Tendris Holding B.V. company reveals little other than the fact that they’re an investment firm located in the Netherlands and that Warner Philips is a principal at Tendris USA. Lemnis Lighting, a technology company that offers a new, innovative sustainable LED (Light-Emitting Diode) solutions for the lighting market, is a Tendris subsidiary. Additionally, Dutch Innovation, a company set up by Gemex Consultancy and a number of patent managers, has found large-scale support for its production and worldwide marketing through Tendris.
Through these press releases and the introduction of their Visa GreenCard, it appears that Tendris Holding is a company that initiates the development of sustainable projects and businesses. The reports that brought the news about Tendris GreenCard expansion into the U.S. also revealed that Tendris is the holding company for RePay International. According to Fast Company, RePay International "calculates the carbon emissions associated with each purchase, based on a formula developed by CE, a Dutch engineering company. Its software then figures the amount of sustainable credits needed to mitigate the greenhouse gases." In this case, the mitigation consists of tree plantings in the Netherlands, Ecuador, and Uganda through the Uganda Wildlife Authority (UWA) on Mount Elgon National park and in Kibale National park.
From this information, it appears that GreenCard users won’t suffer from the "vaporware" theory, as they’ll know where their trees are planted. And, as you use that green card, you don’t need to be concerned about whether the company you purchase goods and services from is "green." Instead, RePay International makes you green as it figures your impact and translates your footprint into carbon credits. From the GreenCard’s Netherland Web site (paraphrased):
"Suppose you fuel your car with 40 litres of petrol and settle up that bill with your GreenCard. RePay International calculates how much CO2 is released as a result of your full tand and the GreenCard is compensated with the cultivation of new trees. ‘It’s very simple,’ as those trees takes on the CO2 that you released into the atmosphere."
The site offers a table that shows how your spending habits are translated into carbon credits. And, further on into the site the company states that these units are durably "fixed" CO2 bunches for Uganda and Ecuador. What this company does not explain is whether those credit exchanges will change with fluctuations in the carbon exchange market. But, they make certain that you know that the onus is on you and that when you use this credit card you can erase all your pollution sins. You, after all, are the reason for global warming. And, this site makes sure that you know that "the scientists" back them up on this claim.
About Your Decision to Use This Card
According to the Fast Company news blurb, when you receive your GreenCard statement from Visa, you’ll view both your emissions and offsets in addition to your balance. On the plus side, this accounting for your activities might make you more aware about the significance of your personal carbon footprint. What it doesn’t tell you is if the companies that you do business with also met their carbon credits.
Additionally, this credit card acts like any other credit card on the market. You will be faced with monthly bills, interest rates, and all the other bells and whistles that you expect from a line of credit. And, it seems that individuals who own the GreenCard tend to use it more than their other credit cards — Fast Company states that consumers use it three times more — which makes this card highly profitable for Tendris Holdings.
Frugal and Environmentally Positive Credit
You might wonder how much the GreenCard will cost you in interest rates and annual fees, especially if you’re looking for a card that’s both environmentally friendly and frugal. The cost of the American card isn’t available yet, but there is one benefit that the GreenCard brings to the table that’s only offered by one other card. The fact that this card isn’t made from PVC plastic
can make a huge impact on the environment depending upon how many people use it.
The only other known credit card that doesn’t use this plastic is the PVC-Free WWF-UK Visa. The consumer who uses this card will provide the WWF (World Wide Fund for Nature) with money for opening the account as well as an additional amount for every retail transaction on the card. This card, offered only in the U.K., provides cardholders with a 15.9% APR and a 0% p.a. introductory rate for nine months on balance transfers with no annual fee.
Another card that provides an option to the GreenCard is the Salmon Nation VISA Card offered by ShoreBank Pacific (a local community bank) in partnership with Salmon Nation. A full one-half of the income derived from the Salmon Nation Visa program goes directly to Ecotrust — another partner in this enterprise — to support building Salmon Nation. This card offers a 12.9% variable APR and a six-month 8.9% APR for balance transfers with no annual fee.
Other cards, such as the Working Assets Card, donate monies to various organizations. This card is considered the "greenest" affinity card by financial experts at Co-Op America, according to TreeHugger. And, it’s probably the most frugal with its 9.9% APR and no annual fee. Plus, if you want your card to make a political statement, Working Assets would make you proud. One recent action included a call to Apple Computer to take back its used products. The only drawback to this card, if you call it a minus, is that it is backed by MBNA. MBNA has made large contributions to the Republican party and has been accused by consumers of predatory practices; but Michael Kieschnick, Working Assets president, believes that the good his company does offsets any negatives from its association with MBNA.
So you have choices, and some of them are as frugal as they are practical in dealing with environmental issues. But, I should point out — if you haven’t made the connection yet — that MBNA is the Bank of America, thanks to a merger. This is the same bank that will bring the GreenCard to America this month.
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