Boing Boing and Wind RECs

A Boing Bonig post (later updated) on Whole Foods selling Renewable Energy Certificates generated a fair amount of blog discussion. There have also been responses in a Treehugger post and a Sustainablog post.

First in the interest of full disclosure – I am a co-owner of an organization that sells carbon offsets (although we are a co-operatively owned non-profit).

To respond to some of the concerns:

“...How can you even be sure the money will go towards wind energy...”

Because these projects are audited by a third party and certified. The third party guarantees that the money will go towards wind energy. The auditing and certification is quite intensive and expensive.

“...why perpetuate the idea that alternative energy costs more...”

All legitimate offset programs must meet the criteria of “Additionality.” This means that offsets can only be used for projects that would not otherwise be financially viable. And the the offsets can only be used for the portion of the cost that is “additionality.”

“..a for-profit company (I assume that this is the case her) is kinda odd...”

See the comment above on “additionality” - the money can only be used on a project that was not otherwise financially viable.

For example, let's say that the utility grid buys power at 9 cents a kWh, but it costs 10 cents /kWh to produce wind power – the offsets would cover the 1 cent difference.

“..others were upset that the card looked like a phone card...”

I agree that this was a mistake. Most offset sellers produce “certificates” rather than “cards” - I do think cards are confusing for consumers.

“...if I were so inclined, more easily just invest in a publicly traded....”

You are completely missing the whole point of OFFSETS. People buy OFFSETS to OFFSET a specific amount of ghg emissions – it might be for a trip they took, an event, their annual power consumption or their total annual ghg emissions. That's why these are called OFFSETS. They are not investments, they are not donations, they are OFFSETS.

If you buy equity in a corporation you have no idea how much ghg emissions that equity investment offests. However, if you buy an offset (or green-tag / REC) you know who much ghg emissions that is offsetting.

And you should have some guarantee of that offset. For larger projects there is usually some soft of third party audit or certification. For the smaller projects that my organization does we send a report to offset purchasers of the project and our accounting is completely public. Our policies and methodology is based on the so-called “Gold Standard” of carbon offsets (although the projects are not in the majority-world so they don't qualify for the Gold Standard).

I can't find anywhere on RCE website that mentions what certification process they use.

And then of course there is the whole issue of the new ISO 14,000 standard .....

Seriously folks, before you label all this a “scam” maybe you should at least do a little research on the Gold Standard, the ISO 14064 standard, Green-E certification, EcoLogo certification, etc. Etc.

“...I don't think these things are part of planning a windmill project at all....”

Sorry, you are wrong. Many larger renewable energy projects account for selling carbon credits as part of their financial model. Some projects would not even go ahead if it weren't for carbon credits being used either directly (sold by the project developer) or indirectly (the utility paying a premium for green power because they can sell carbon credits).

In fact, even the old version of RETScreen software used carbon credits as part of their financial analysis. Which means carbon credits have been part of even the most basic planning process for several years now.

“...for the purpose of building profits. ..under the pretext of 'doing your part to save the environment'”

If you buy RECs from a source that uses third-party verification/ certification the third party guarantees that there is a specific environmental benefit (measured in pounds/kgs of ghg emission reductions). TerraPass has a good explanation of verification at: http://www.terrapass.com/projects/verification.html

A certain percentage (sometimes 10%) of the cost of the credit does go to management fees (the profit part) but the majority of the cost should go to the environmental benefit.

You seem to be implying that all of the cost of the credit goes to building profits with not guarantee that there is an environmental benefit. This is a serious accusation and it would mean that the third party verification organizations have defrauded people of thousands of dollars. If you really believe that you should start a class action law suit. Good luck with that.

“..$15 and they use about $2 to buy and resell CO2 credits...”

But that assumes that RCE is buying credits from the the Chicago Climate Exchange instead of using funds to support real world renewable energy projects.

The CCE carbon credit pricing is notorious for being well below the cost of real world renewable energy projects. That is because the CCE credits are used on a wide range of projects some of which are a bit dubious (sequestration projects, majority-world projects that use cheap labour, etc.).

You will find that cost of the renewable energy projects is often more than $15 per tonne. For example, in our local area we have calculated the cost for solar hot water projects to be about $35 / metric tonne and for solar photovoltaic projects more than $100 / metric tonne. And that is just the cost of additionality – not the total cost of the project.

“...What exactly do they recieve [sic] in exchange...”

Only the knowledge that a specific amount of their ghg emissions has been offset.

I realize this may sound strange to some people but there is a well established market for these offset credits. Not only among individuals, but also businesses that have made a commitment to being “carbon neutral.” And major events have made a commitment to carbon neutrality. The 2006 Olympics purchased carbon offsets and the 2010 Olympics has a multi-million dollar budget just for carbon offsets.

“...green energy co-op in your community...”

This has been used extensively in Europe. There are also a few examples here in North America:

http://www.windshare.ca/
www.peaceenergy.ca
http://www.ccenergy.com/
www.vanrenewable.org