Rep. Markey has asked the FTC to investigate whether or not the sale of voluntary carbon offsets violates the Guides for the Use of Evaluating Environmental Marketing Claims, as laid out by the Federal Trade Commission. The FTC has responded and agreed to commence an investigation, noting that:

The FTC staff has been monitoring this nascent market as part of the Commission's ongoing consumer protection programs in the energy and environmental areas. The carbon offset market poses potential consumer protection challenges. Carbon offset claims may present a heightened potential for deception because it is very difficult, if not impossible, to verify the accuracy of the seller's claims. At the same time, the sale of carbon offset products afford interested consumers the opportunity to participate in the market for products and services that may reduce greenhouse gas emissions. Because of the benefits that this developing market may provide, we want to better understand the market to avoid acting in a way that could restrain innovation or harm consumers.

For full details, see here.

There is clearly a potential for fraud and cause for investigation, but my personal guess is that this is also a good example of the cost of not participating in Kyoto. The accounting for GHG offsets is really complicated, and the formal, audit-worthy work on that topic is now being done in London and Brussels. Voluntary markets are an attempt to bridge that gap, but will never carry the rigor of a Big-4 audited statement.

In any event, this will be worth following to see how the story develops.