Tuesday, March 15, 2005

Schwarzenegger Terra-ized by TerraPass

Americans love their cars dearly and the independence they bring. They drive to work, honk at other Americans in traffic, and drive home again. They drive to the mall, they drive to go bowling, they drive to buy Pez and, when convenient, drive to pick up the mail.

And when they get out of their cars, they try to ignore the fact that they can no longer see the sky through the quickly thickening blanket of smog.

This is why a paradox exists for many Americans: cars are bad for the environment. And while many would like to do something about it, giving up their means of transportation is simply out of the question. Even Austrian-born American Arnold Schwarzenegger, in a recent act of manic inspiration, had one of his eight environment-busting Hummers converted to hydrogen power at a cost of $100,000.

With only seven left to go, it was time to…

Enter the TerraPass
On March 7, a 30-day challenge was issued to six American leaders to purchase a TerraPass and thereby take personal responsibility for the environmental impact of the vehicles they own.

What is TerraPass?

For a fee between $30 and $80 per gasoline-powered car, Americans can assuage the guilt of owning a gas-guzzling beast. The money goes to fund renewable energy resources, thus “wiping away” the individual impact of the vehicle upon the environment.

TerraPass owners get a bright and shiny sticker to slap on the bumper along with the knowledge that they are now good environmental stewards.

Schwarzenegger, of course, is the chief target and Public Polluter #1 in TerraPass’s crosshairs.

“Arnold Schwarzenegger’s an easy target for TerraPass,” Tom Arnold, Chief Environmental Officer of TerraPass said. “He cares about the environment and actually has a pretty good environmental record as Governor of California. But those eight Hummers that he owns are a thorn in his side – he won’t get rid of them.”

With regard to Schwarzenegger’s new hydrogen-powered Hummer, Arnold said, “Why pay the $100,000 to convert one Hummer when there’s a practical solution: buy TerraPass instead.”

Arnold (Not Roseanne’s addled, high-strung ex-husband) claims that the money from each TerraPass sold is used, in effect, to cancel out the emissions produced by an automobile by financing a wide range of environmentally-sound projects, markets, and green energy technologies.

“We as Americans love our cars. They’re how we express ourselves and are part of our lifestyles. You can’t take away people’s cars, but owning a car and taking care of the environment at the same time are not incompatible. We can take responsibility for the emissions that our cars create and still maintain our lifestyles.”

Arnold added that he hopes that the former actor and bodybuilding champ turned Governor sees the fun in TerraPass’s challenge. “We hope he realizes that this is a humorous attack meant to highlight our cause.”

Schwarzenegger isn’t standing alone in the TerraPass spotlight, however. Leaders such as San Francisco Mayor Gavin Newsom and New York Senator Hillary Clinton are also being targeted. “There are leaders with great environmental records,” Arnold said. “We’re looking to highlight these environmental issues, and want to give some of these leaders a chance to stand with us.”

“We’re looking to create a buzz,” Arnold went on. “We’re trying to do something good for the environment, and we’re trying to have some fun at the same time. We think this is a great way to think carefully about the environment, about how each of us has an impact on the Earth, and what each of us can do about it.”

The Cost
The cost of a TerraPass is based upon the car that it’s purchased for. While a utility/performance vehicle such as an SUV or Schwarzenegger’s Hummers will run a $79.95 price tag, an efficient hybrid vehicle that yields 41 or more miles per gallon of gas costs $29.95. The calculation is made by the amount of carbon dioxide “offset”: a utility/performance vehicle requires 20,000 pounds of carbon dioxide offset, while a fuel-efficient hybrid only requires an offset of 6,000 pounds.

There are also TerraPass offerings for Efficient (29-40 mpg, $39.95) and Standard (19-28 mpg, $49.95) cars.

“Every car – even hybrid ones – have an impact on the environment,” Arnold said. “Pollution is based on the amount of gas you put into a car.”

Each TerraPass package comes with a membership card and several decals and stickers. A car adorned with a TerraPass membership bumper sticker, it is thought, will prevent those (such as Laurie David, wife of Curb Your Enthusiasm’s Larry David) who might look to slap slogan-blaring stickers on low gas mileage vehicles in the name of environmental justice.

In the Fall of 2004, a graduate-level Systems Analysis and Problem Solving class at the University of Pennsylvania was asked to embark on a somewhat unusual endeavor: form a socially and environmental-conscious company, and make it profitable in a short period of time. The professor, Dr. Karl Ulrich, bequeathed $5,000 in seed money out of his own pockets and set his 41 students out to perform brand and market research.

Dr. Ulrich was convinced that the concept of "carbon credits" – or paying back the environment in equal measure for what is taken away from it – would be a popular one with Americans if it was presented in a way that was easy to understand.

Within 16 days of its founding, the class had succeeded in meeting Dr. Ulrich’s challenge: 150 TerraPasses had already been sold, making it a profitable company.

Today, nine students (with the help of Dr. Ulrich and a few others) are still with the company and committed to both preserving the environment and making TerraPass a household name.

Where the Money Goes
The money generated by TerraPass sales is directed into three major areas: wind power, methane abatement, and industrial efficiency. One of the major avenues for wind power proponents is to allow people to select a “green power” option as an alternative and environmentally-friendly way of obtaining energy from utility companies. Methane abatement is a way of dealing with harmful landfill gasses by means of anaerobic digestion.

Finally, industrial efficiency is sought through markets such as the Chicago Climate Exchange, which institutes a cap and trade system via willing industrial participants. “It’s a voluntary framework that adheres to the Kyoto Protocol and seeks to reduce carbon emissions,” Arnold said. “It’s a place where companies can come together to find common solutions to our environmental problems.”

“We’re seeking to combine a belief in scientific research with a broad-based approach to solving our environmental problems.”

The Future
While TerraPass won’t solve all of the world’s environmental problems, Arnold believes that it can have a major impact. “TerraPass can solve global warming,” he said. “But local issues – such as the smog problem in Los Angeles – will require additional solutions.”

TerraPass sees itself as more than a student-run one-trick pony, however. As the company is listed under the name Benven LLC (short for Beneficial Ventures), Arnold says that there are a number of new environmentally-friendly initiatives in the works.

Arnold sees a bright future for TerraPass, and for other environmental-for-profit companies as well. “Social entrepreneurship is a growth industry. People are attracted to companies dedicated to making the world a better place.”


The Sore Loser said...

So is terra-pass basically the equivalent of making a donation to an environmental group? Shouldn't $50 to the Sierra Club cover my polluting ways?

Eric Berlin said...

Yeah, but it's like personalized one-to-one charity to very specific environmental renewable energy causes. It's a brilliant concept in that it really hits at the guilt that a certain number of upscale, pro-environmental people have... especially those who drive Hummers and SUVs.

Anonymous said...

How much of your money goes towards CO2 offsets and how much is in profits for this company, salaries, and overhead. I would stay away from this company until there is tranparency we regard to where the money is being spent.

Eric Berlin said...

That's a good question, Pete, and I wouldn't be surprised if it was addressed at www.terrapass.com. The company's been very successful so far, so I would think there's some level of transparancy there.

Thanks for checking out Dumpster Bust.

Anonymous said...

Hi Pete:

We're built for a long term model of 10% profit. That means that 90% of your money goes to either carbon reduction, or raising awareness about global warming (both good things IMHO). We are currently not quite profitable, but will get there soon.

For a list of our investments see http://www.terrapass.com/investments.html


Eric Berlin said...

Tom -- Thanks very much for checking in with DB.

I imagine that you would consider TerraPass a transparent company in terms of its finances? How would you prove this to the public or to potential investors?


John said...

If it were a not for profit organization, I would think their stance would be stronger.

Eric Berlin said...

They make the argument that they have a lot more flexibility and leverage to make a difference as a for profit company.