Published January 19, 2005

With the Kyoto Protocol set to go into effect in February, some Americans may be feeling left out — the United States withdrew from the international accord on climate change in 2001. But a new company, using a market-based system of carbon credits and debits not unlike Kyoto, allows drivers to pay to offset their cars' annual emission of greenhouse gases. Think of it as Kyoto for commuters.

The U.S. company, Benven LLC, sells a product called TerraPass, essentially a pricy bumper sticker identifying the driver as a volunteer in the fight against global warming. Benven directs the money from TerraPass sales toward clean energy and efficiency projects that will — if it all works as advertised — reduce overall carbon-dioxide emissions commensurate with their cars' output of the gas.

TerraPass emerged last fall from a classroom project at the University of Pennsylvania's Wharton School of Business, but began as a pang of guilt in the mind of professor Karl Ulrich, who drives his Ford F-150 pickup from Philadelphia to his farm in Vermont on the weekends.

"I'm an environmentalist, but I need this truck," Ulrich says. "On one of the trips it occurred to me that I'd be willing to pay to offset the impact of the truck."

With a no-interest loan from Ulrich, the class set up the Web-based, for-profit business (www.terrapass.com) offering three levels of carbon dioxide "remediation": four metric tons for $39.95; six metric tons for $49.95 and 10 metric tons for $79.95. For reference, a vehicle that gets 20 miles per gallon and travels 12,000 miles per year produces about five metric tons of carbon dioxide per year.

In the near term, the money TerraPass generates will be used to buy carbon credits on the Chicago Climate Exchange (www.chicagoclimatex.com), a commodities market-like organization whose members have committed to reduce greenhouse emissions. Benven then "retires" those credits, making that capital available to cover the marginal costs of purchasing more energy-efficient equipment, for example, or switching to renewable energy sources. Exchange members include Ford Motor Co., International Paper Co. and IBM.

Transportation represents about 25% of U.S. carbon emissions (slightly more in California), but electrical generation represents about 40%. Because it is generally easier to reduce carbon emissions in the production and conservation of electricity, Ulrich says, a carbon-conscious dollar spent with TerraPass goes further than one spent on a more fuel-efficient vehicle.

"A Toyota Prius costs about $3,000 more than a Corolla, and for that $3,000 you reduce carbon emissions by about 3 tons per year," says Ulrich. "But if you invested that $3,000 in TerraPass, you can save 375 tons of carbon."

Such arithmetic might make some environmentalists queasy. "Any program that reduces CO2 is a good thing," says John Boesel, president of WestStart-CALSTART, a nonprofit organization dedicated to fostering clean transportation nationwide. "A win-win would be that people would be buying more efficient vehicles and taking these sorts of steps."

Ulrich acknowledges that TerraPass, in assuaging the guilt of those who drive gas hogs, could reduce consumer resistance to purchasing such a vehicle, but he says, "A customer who buys a TerraPass will be one that buys a responsible vehicle."

Ulrich, who has no financial interest in Benven, compares the program to recycling. "You don't have to recycle," he says. "People just do it."

http://www.latimes.com/news/science/environment/la-hy-wharton19jan19,1,3584143.story?coll=la-news-environment