Even more head-spinning [than trees as offsets] are the questions about “renewable energy certificates” from wind farms and solar plants, certifying that they made a certain amount of clean energy.
Offset companies buy these pieces of paper. Then, they use them to claim credit for pollution “avoided” — reasoning that they helped produce energy that would otherwise have come from a polluting coal or natural-gas plant.
Some of the money paid for these certificates stays with the offset vendor or with a middleman. The rest usually winds up with the energy project’s builder or the utility that buys its electricity. In some cases, this can amount to something like a donation to a for-profit company: American Electric Power, which sold an undisclosed amount of certificates from wind farms last year, earned more than $1 billion in profit.
Some environmentalists balk at this. If the certificate is bought only after the energy is produced, they wonder, how can an offset vendor know the energy wouldn’t have been produced anyway?
Consider how this plays out for one offset company, Carbonfund.org, whose Executive Director, Eric Carlson, I actually debated earlier this month:
Carbonfund.org bought renewable energy certificates, often from middlemen, that came from a number of wind farms in the western United States. But, at several facilities, officials said the group’s donations had not produced anything new.
“We’ve invested in wind generation” as a way of having a diverse portfolio, said Melissa McHenry of American Electric Power, whose subsidiary buys power from an Oklahoma wind farm that Carbonfund.org says it supports. “It’s not related at all to Carbonfund.”
Carlson responded that, even if a particular utility is not aware of Carbonfund.org’s purchases, buying the certificates is a good thing overall — as it stimulates the building of wind farms.
Carlson struck me as a very thoughtful guy, and I am a big fan of stimulating renewables — I am just not a big fan of selling RECs as offsets, since you can’t know if your money actually resulted in greenhouse gas reductions that wouldn’t otherwise have occurred.
One might also ask, why should the sellers of RECs, which only cover a small portion of a renewable project’s cost, get all the carbon credit for the project? In particular, for windpower, which receives a huge subsidy from the federal government in the form of the production tax credit, why shouldn’t the US taxpayer get some of the carbon credit, if it has real value?
The article also casts doubt on trees as offsets and is well worth a read.