Have yourself a carbon-neutral Christmas...

WHAT'S THE PERFECT GIFT for the environmentally conscious man who has everything? This holiday season there's a new must-have: carbon neutrality. In the past few years, a cottage industry has grown up around the sale of so-called "carbon offsets." Concerned consumers, or their secret Santas, can pay to have their greenhouse gas emissions -- from driving, plane travel, home heating, even beef-eating (cattle ranching is the among world's leading sources of greenhouse gases) -- canceled out by a corresponding emissions reduction elsewhere.

Travelers buying airline tickets on the travel websites Expedia and Travelocity, for example, can now pay extra to offset their share of the flight's emissions ($16.99 on Expedia for a cross-country flight), their money going into subsidies for wind and biomass energy, the planting or protection of forests (trees take carbon dioxide out of the air), or the installation of more energy-efficient light bulbs. Avis Europe now offers clients the option of making their rental car carbon neutral. And for as little as $5 a ton, companies and nonprofits like Terrapass, Native Energy, and the Climate Trust will offset the 5 to 6 tons of carbon dioxide an average midsized sedan emits over the course of a year.

Many such organizations also offer individuals the chance to offset a year's worth of total emissions. Depending on the sort of offset they sell, you'll be asked to provide various bits of information about your carbon-burning lifestyle: your car (its size or make, how much you drive it), the amount you travel, the size of your house, and the composition of your diet. In seconds, you'll have a calculation of your annual carbon footprint, and with a few clicks you can pay your way to carbon neutrality.

No one knows the exact size of this new industry. But everyone who follows it seems to think it's blossoming. "When Native Energy was founded in 2000," says spokesman Billy Connelly, "there were only one or two other organizations offering retail carbon offset." Today he counts around 30.

The number of high-visibility clients, both individual and institutional, is certainly growing. HSBC, Europe's largest bank, recently announced it would offset all of its business travel. The Dave Matthews Band has retroactively offset its travel and accommodations for every show it's ever played. Al Gore's "An Inconvenient Truth," both the book and the movie, were proclaimed carbon neutral, as was the 2006 World Cup. Famously green companies like Stonyfield Farm and Ben & Jerry's are offsetting their emissions, as well -- the energy bar manufacturer Clif Bar, by its own calculations, offsets more than it emits.

And last month the New Oxford American Dictionary anointed "carbon neutral" its "word" of the year (it edged out "dwarf planet" and "Islamofascism"), securing its place alongside "fair trade," "organic," and "sweatshop-free" in the lexicon of responsible consumerism. Like those classifications, though, carbon neutrality has invited skepticism, from environmentalists concerned about the message it sends -- for a few dollars, are we just giving people license to pollute? -- and from economists who doubt it really works.

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Of course, not even offsetting's most fervent evangelists suggest that they are doing much to constrain the world's billions of tons of annual greenhouse gas emissions. "We're a long way from being part of the solution," says Tom Arnold, Terrapass's CEO, or "chief environmental officer."

"What this market is really trying to do is to educate the public," says Mark Trexler, president of Trexler Climate + Energy Services Inc., an energy and environmental policy consulting firm, "to show the public a way to demonstrate its concern for global warming."

According to this argument, offsets are a first step in illustrating to the wider public the environmental impact of everyday living. And the more people get used to the idea that carbon reductions can be bought and sold, supporters argue, the more receptive they will be to the sort of binding, global market-based measures like a cap-and-trade system that environmentalists and economists alike believe could truly cut greenhouse gas emissions.

There's no substitute, argues Bill McKibben, an environmental scholar at Middlebury College and the author of the 1989 book "The End of Nature," a widely read warning of the dangers of global warming, for changes to national and global climate policy. Nevertheless, he believes that carbon offsetting is "something we can do in the meanwhile to help." Every Christmas McKibben buys offsets for his household's relatively meager carbon emissions and sends them out to friends as presents.

Yet some environmentalists worry that offsets could end up being a tool not of consciousness-raising but complacency, offering as they do the promise that our carbon-burning sins can be expiated for the price of a tank or two of gas. It's vital, says Daniel Lashof, a climate change analyst at the Natural Resources Defense Council, that offsets be seen as part of a larger strategy of reducing one's own individual energy use. Offsets could be counterproductive, he argues, "if people think they can buy a Hummer and drive it guilt-free by buying a few carbon offsets."

A few retail offset products do seem particularly tailored to high-rolling habits: Terrapass designs custom offsets for private jet travel.

Still, to Robert Stavins, director of Harvard's environmental economics program, if an offset system actually were reducing emissions there'd be no reason to worry about people buying offsets for their Gulfstreams and Hummers. If it's worth the price of an offset to someone to drive their SUV, and the money they're paying actually buys a reduction elsewhere, that's the definition of economic efficiency. "That's the system working," says Stavins. The point, as he sees it, is to reduce emissions, not to reward individual virtue.

The real problem with offsets, for Stavins and other economists, is that they fail to do this. Even if all of the carbon offset companies held themselves to the highest standards -- and in what is still a completely unregulated industry that is a big if -- economists doubt that offset vendors can assure that a certain amount of money paid by an individual will buy a certain amount of greenhouse gas reduction.

"What you have," says Stavins, "is a comparison to an unobserved and unobservable hypothetical." How does an offset company know that a landowner wasn't going to preserve his forest anyway, perhaps because the timber market was weak? Or that an electric utility hadn't decided to build the wind farm long before it got the offset money? In such cases, the offset money is simply allowing the forest owner or utility to make more money for a decision already arrived at.

The offset industry acknowledges this problem and vendors insist that they do their best to ensure that they're not paying for redundant reductions. William Pizer, an economist at the environmental think tank Resources for the Future, believes that this is ultimately impossible. "You're never really sure that what you're getting is an addition," he says.

But while Pizer finds the selling of offsets on the retail market, as he delicately puts it, "sort of gimmicky," he thinks the larger idea has a role. It's never going to be terribly efficient, he says, but it's still a pretty good way of funneling money toward people doing environmentally beneficial things that we want to reward.

Drake Bennett is the staff writer for Ideas. E-mail drbennett@globe.com.