You see, I had made the 10-mile round trip between lower Manhattan, where I live, and the Beacon Theatre on the Upper West Side, by bicycle. Burning a gallon of gas to go 20 miles makes 20 pounds of CO2, so I figure that by biking instead of taking a taxi I prevented 10 pounds of climate-altering greenhouse gases from going into the atmosphere. That may not be much, but it's something.
But now I'm told that for 6 cents I could have been just as "climate-neutral" as I was by pedaling ten rather sweaty miles. Just a nickel and a penny could have purchased enough wind-generated electricity to keep the coal-fired power grid from burning a few lumps of bituminous and releasing 10 pounds of CO2 -- the same climate-altering amount the cab ride would have made.
Says who? The very popular, and now supposedly climate-conscious, Dave Matthews Band. According to a link posted at the jam band's website, the group is contributing $216,000 to a wind power investment fund to finance wind turbines, which over their operating life will offset 18,000 tons of CO2 that would otherwise have been produced with fossil fuels. Supposedly that's as much carbon pollution as the DMB and its fans have produced by traveling 36 million car-miles since the band began touring in the early 1990s. This donation works out to 6/10 of a cent for each of those miles, or 6 cents for the 10 car miles I would have racked up if I'd taken a cab to the Zappa show.
Want to try that again? Most electricity generation and all car driving make carbon dioxide, whereas wind power and bicycle riding do not. Just as biking can substitute for driving, wind-powered electricity displaces kilowatts that otherwise would have necessitated burning fossil fuels and making CO2.
So in my case -- says the DMB -- instead of bike-riding to the Beacon, I could have driven and still not produced any net carbon, as long as I paid a wind developer 6 cents to build a bit more wind power and displace enough coal-fired power to offset the emissions from my gasoline-fueled taxicab.
Whew! That reasoning is almost as intricate as one of Mother Frank's fiendish marimba parts. But is it equally logical? I'm not so sure.
First, a minor math matter: I ran the numbers and came up with only half of the carbon offsets the DMB is claiming. The $216,000 that the band is anteing up will only build enough wind capacity to offset the CO2 from 18 million car miles, rather than 36 million.
No big deal there. The offsets should be priced at 1.2 cents a mile, not 0.6 cents, which would bump up the cost to make my cab ride carbon-neutral to 12 cents from 6. Wowie Zowie, as Zappa might have said.
Intuitively, though, it feels like there's something wrong with this picture. When you stop and think about it, the whole idea of driving a car, paying money into a green kitty to offset the CO2 from burning the gas, and then calling the car trip carbon-neutral, is ludicrous.
The windmills may offset the driving, mathematically, but so what? The windmills should, and likely could, have been built without my 6 cents or even Dave's $216,000. (Indeed, wind turbines and other clean energy would be sprouting up everywhere, without green offsets, if the prices of fossil fuels included a charge for their climate destructiveness.) Crediting me or the DMB with climate neutrality for financing green energy, while the actual implementer -- a wind developer here, an insulation installer or a mass transit builder there -- also takes credit, is double-counting.
But it's worse than padding the books. Carbon offsets are disturbingly redolent of the sale of indulgences in the Middle Ages, by which the wealthy could expiate their sins without prayer or good works by greasing the palms of the Church hierarchy. Leaving aside whether carbon emitting is "sinful," the purchase of carbon offsets smacks of the same corruption that turned indulgences into "get out of Purgatory free" cards and helped set off the Protestant Reformation.
"Be the change you want to see in the world," urged the 20th century's greatest revolutionary. Gandhi wasn't speaking about the climate crisis, but his words still apply. At the same time that we press for policy changes like carbon taxes and efficiency standards, we Americans must move individually toward low-carbon lives -- bicycling instead of driving, replacing watt-wasting incandescent bulbs with compact fluorescents, and minimizing air travel. This personal commitment is essential, not just to deliver big reductions in carbon emissions but for the sake of moral consistency.
Preserving Earth's climate isn't a job that the environmentally concerned can subcontract. Telling others to cut back while we keep burning carbon will destroy our moral authority, no matter how many offsets we purchase.
We can't buy the change we so desperately want to see in the world. As Gandhi said, we must be it.
Komanoff, an economist and Gristmill contributor, first saw Frank Zappa and the Mothers of Invention at the Garrick Theatre in Greenwich Village in 1967 in the company of his sister, percussionist Ruth Underwood, who went on to tour and record with the band.
Comments
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bookerly Posted 12:24 pm
21 Jul 2006
You are absolutely correct, buying "indulgences" doesn't work for very long. There are two errors in the offset equation.
The first involves the word "displaced". There is an assumption that the wind energy built will displace "bad" energy. There is no evidence that this is true. This would only be true if the amount of energy the world uses is a fixed constant.
The energy the world uses is increasing all the time. So, offsets may encourage more "good" energy, but they don't displace "bad" energy (they don't make it go away).
Since the current world "bad" energy situation is unsustainable, offsets, will only (at best, if they really worked) keep things from getting worse. That is not enough to prevent catastrophic global warming.
The next flaw, as you pointed out, is the assumption that the offsets build "new" "additional" renewable energy resources that would not be built anyway.
This is somewhat unlikey, more likely, you are only contributing to reduced costs (and higher profits) for a renewable company and of course, jobs and money for a new NGO sector.
This is laudable, but again, does nothing to stop, or probably, even slow global warming.
Why? Because the number of people who can afford offsets is too small to make any significant difference in world energy usage.
What is needed is concerted investment by governments and large industrial entities. (smile).
Individual action is good, it can be educational and healthy. But only cooperative large scale mass action will "untip" the scales.
I will keep riding in the meantime, though!
patrick
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Kif Scheuer Posted 12:43 am
24 Jul 2006
Patrick rightly criticizes RECs for their scale and the fact they will not be effective alone. He says what we need is more industrial and government investment. What better way to tell industry and government that we want wind than to tax ourselves to get it? RECs are a form of self-taxation, serving as consumer-driven market signalling. I don't think anyone thinks RECs are the sole answer, but they do offer a means to promote investment, stimulate demand and let government and power providers know citizens are serious about wanting renewable power and climate protection.
I also disagree about the assessment of whether RECs displace "bad" power. If power and environmental benefit can be unbundled and sold separately (the premise of RECs) and there is transparency to the process (as Green-E tries to do) then the purchase of benefits are displacing impacts. Thirdparty certification of RECs is supposed to eliminate doublecounting of credits, so the purchaser is the only one who can claim the "benefit" in terms of carbon mitigation. If we ever see a carbon cap, or carbon tax this will become very clear. If consumers buy RECs in large amounts investors are likley to build a wind farm in place of a coal plant, thereby more literally displacing "bad" power. Finally what life cycle analysits call the the fossil energy ratio of our electric grid is about 1/3. Meaning we put 3 units of fossil energy into the grid for every energy unit out. Putting renewables into the mix significantly improves that ratio (wind has among the best ratios ~10/1). So the badness or goodness of our energy system is the sum of all power sources. In this sense renewables do displace bad energy in that they can improve the overall performance of the system.
One thing I have thought of, that addresses Charles initial frustration with RECs (i.e. why biking gets no credit) is the range of RECs available should be expanded to cover conservation. Why not get credit for biking, changing your lightbulbs etc.? Imagine a municipality that aggresively pursues conservation and then can raise additional revenue by selling their offsets to other communities. I don't know how it would work, but including conservation in the REC portfolio could incentivize conservation and signal market interest in ways similar to how it works for wind under current REC programs.
In my opinion Shooting down RECs altogether is unproductive. They have their benefits and their limitations like most of the environmental "solutions" out there.
Of course we can't buy our way out of climate change, but for the time being Americans in particular are going to keep buying, and if there is a way to have them buy wind power along with their gas, electricity and other consumer choices, it's going to boost windpower at a time when I beleive we need to do everything in our power to make renewables our energy choice of the future. Lately it seems that coal, nuclear and ethanol are getting all kinds of media primping as THE Solutions to our energy future. Wind is growing, but anything we can do to let the market and politicians know we want wind is valuable.
So for the time being we can "be the change" we want to see on our bikes and in the market.
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bookerly Posted 7:49 pm
24 Jul 2006
Kif raises some good points. It is true that not every one who buys RECs is a guilty hedonist (as I described). Mea Culpa.
However, most people who do such are relatively wealthy (in world terms) which is what I was attempting to get at! Sigh. This is not always a bad thing (smile).
One of my concerns (poorly articulated) is that people who purchase RECs will think (not Kif, or anyone posting here) that they have done there share, while I believe this is insufficient.
It becomes a matter of whether given actions give the illusion of solving the problem while they don't, although if they were only part of the mix, then Kif is right, they are a good idea.
My concern is that for too many people they become distractors, and thus end up being "the" solution.
I hope I am wrong, but I remain skeptical.
patrick
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Tom Stoddard Posted 1:06 am
25 Jul 2006
First, offsets aren't so you can drive instead of riding your bike. They're for when you can't ride your bike. I assume, Charles, that you drive sometimes, and heat and power your home. Yes, we should all reduce our energy use, but as a practical matter we can not eliminate it. We'd freeze in the dark. Offsetting is to mitigate the impacts of the energy we can't avoid using.
Second, renewable energy does displace fossil fuel power, whether the amount of energy the world uses is a fixed constant, or is rising or falling. It's a matter of the laws of physics. At any given level of electricity demand, to maintain constant voltage, the amount of electricity going into the grid must equal the amount being used at that moment. If the wind starts blowing at a wind farm, the extra electricity must be compensated for. If demand is constant, the grid operators must turn down other generators by an equal amount. If demand is falling, they must turn other plants down by the amount it is falling plus the amount of the wind farm's power. If demand is rising, they must turn them up less, by an amount equal to the wind farm's power. In each case, the influx of the wind power results in less power being generated from other sources than otherwise would have been. The one's the turn down are the fossil fuel plants - hydro and nukes are always used to their fullest capacity.
Third, it is correct that crediting DMB with climate neutrality while the actual implementer(s) take credit would be double counting. That's why we make sure that the actual implementers are contractually prohibited from taking credit.
Fourth, not all REC purchases finance new construction. Many projects are built because they are cost effective, and Patrick is correct that they'd be sprouting up everywhere if we didn't subsidize fossil fuels so much. But the fact is that we do subsidize fossil fuels, and thus many wind farms cannot compete. The Native American wind project DMB is helping build is in an area (SD) where it has to compete with coal power that can be produced for 1.2 cents per kWh. It and wind farms like it absolutely will not get built without someone stepping to the plate to pay a premium for the RECs. We encourage people considering RECs and other kinds of offsets to do their due diligence. There are three kinds of RECs:
RECs from projects that were built because they were cost effective. Because they exist, the RECs will be generated whether you buy them or not. Your purchase makes the project more profitable, and theoretically attracts more investment in wind farms because they're seen as more profitable. The problem is that you're not rewarding a real risk taker, so your "signal" to the market is weak.
RECs from projects that were built in reliance on market demand for RECs. Because they exist, the RECs will be generated whether you buy them or not. Your purchase, however, rewards someone for taking the financial risk that REC revenues will be forthcoming, and so sends a stonger signal - you show that market demand favors risk takers, so risky projects have less competition from non-risky projects.
RECs from projects that aren't built yet and can't get built without a firm contractual commitment (one that they can "take to the bank") to purchase the RECs on a long-term basis (commensurate with project financing). Here's the rub. Projects are financed on a long-term basis, and if they really need REC revenues, they need them on a long-term basis. The buyers in the market, however, don't want to make long term commitments. That leaves a lot of projects in the lurch, especially the smaller, distributed projects that are valuable in strengthening the grid and building local economies.
We fix that market failure. We work with these "type 3" projects, and commit to them while they're in development, that if they proceed with construction, we will purchase and pay up front for all the RECs their project will generate over its expected operating life. This enables the project to need to borrow less, providing the financial equivalent of a long-term contract paid over time, rendering the project economic and financeable. To finance our purchase, we sell shares of the long-term REC output up front. Each of our customers buys a forward "slice", and collectively they buy it all. To count the forward RECs as offsetting their current footprint, our customers donate their rights to their forward stream of RECs to Clean Air-Cool Planet, who's like a land trust for the RECs - they tear them up as they are generated. This enables our customers' to make a short-term (one time) purchase while providing the project the financial equivalent of a long-term purchase. Certainly there's a little cost in the delay in the generation of the RECs, but we believe that cost is greatly outweighed by the benefit of getting those RECs generated at all, when, due to that market failure, they otherwise wouldn't be.
Finally, I agree that personal offsetting won't fix global warming. We do need "concerted investment by governments and large industrial entities." For that we need widespread and strong public support for major policy changes. The offsets market provides a platform for the education and awareness building - and for conversations like these - that are needed to build that support. Offsets also can be, if you choose the right ones, a way for each of us to do our part, however small that may be individually or in the aggregate. To argue that we shouldn't offset because even collectively it won't amount to much, is also to say, like it or not, that we shouldn't bother to reduce our personal energy use, for by definition it can only amount to less. Only offsetting can mitigate 100% of your energy use. You can only reduce part of it.
So please reduce your energy footprint, offset what remains, and choose offsets that make a real difference.
Thanks!
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Kif Scheuer Posted 11:34 pm
25 Jul 2006
Thanks for the very detailed explanation of RECs and your approach to them. Wish I had found something this clear when I was shopping for them. If I had had this level of guidance I probably would have gone with Native Wind instead of the other providers I did choose.
Right now there's a lot of confusing information out there among the REC providers and it's incredibly difficult to compare apples to apples (i.e. do your due diligence). There's seems to be too much variation in the; price/ton of carbon offset, methods for calculating emissions, and the ways your investments are handled. As a fairly informed consumer who tried to do my homework I was still frustrated by trying to pick between the various REC providers. I can't imagine what it's like for someone with less motivation.
There needs to be more transparency and standardization across providers. The lack of this hampers growth, acceptance and credibility of the products. I can see some consumers looking at all the variations in the market and getting the feeling there's a shell game going on.
A side note - I ended up going with other providers because they subscribed to Green-e, which seemed more credible, I see now that at least some of your products are green-e certified. Is that new? Did I miss something when I was looking? Are some of your products green-e certified and others not?
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bookerly Posted 6:54 pm
30 Jul 2006
Tom, I agree with Kif that your answers provided me with a different perspective and room for thought on this issue. (And I like the Dave Matthews Band, which may bias me (smile)).
Kif's further questions (Kif, if you get answers, please share them!) point out how difficult it is to always get clear answers to these issues.
But let's not lose the focus on institutions in cheering our individual successes!!
patrick
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Tom Stoddard Posted 6:57 am
31 Jul 2006
A couple things folks should bear in mind. Not all RECs are offsets, and not all offsets are RECs. RECs represent the environmental attributes of renewable generation, and until recently (except for NativeEnergy, BEF, and maybe one or two others) were sold as a means to convert (legally and practically) your electricity to renewable electricity - to be green powered, not to offset your CO2. Back then, RECs cost too much to be sold as CO2 offsets competitively (we were able to do it through the discounting to present value inherent in our forward model, driving a lower nominal price while providing the project the equivalent of higher revenues over time).. Now that wholesale REC prices are falling, it seems that everyone and his brother is selling RECs as offsets. But not all RECs carry a particular attribute necessary to qualify them as a bona fide offset - additionality. Additionality is a term used to describe projects that were undertaken for the purpose of producing CO2 reductions, and that could not have been undertaken without the opportunity to realize value for the CO2 reductions. Many renewable energy projects are undertaken without meeting these requirements, and so their RECs and the associated carbon reductions are non-additional.
Second, Green-e does not (yet) certify the carbon reducing impact of RECs, so don't assume that because a REC is Green-e certified, the CO2 claim made by the marketer is certified or even accurate. Right now, in the US, only the Climate Neutral Network and ERT certify the carbon impact of RECs and other offsets. I understand that Green-e is working on developing a carbon standard, and depending on how it comes out, it may be a welcome addition.
So, you're right to look for certification. If you're looking to be green powered, go with Green-e certification. If you're looking to be climate neutral, look for Climate Neutral Network or ERT certification. The exception is the Climate Trust. They're not certified, but they don't really need to be. They're a statutorily created organization, and I know the standards they use to purchase offsets. They're good people who are doing it right. If you're looking for non-REC based offsets, go to them.
If you're looking for REC based offsets because you want to be climate neutral while supporting the development of clean electricity sources, NativeEnergy is here to help you help build "your own" truly new wind farm.
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Kif Scheuer Posted 10:38 pm
01 Aug 2006
This makes them the second largest wind REC purchaser after Whole Foods.
A Colorado conservationist quoted in the article reiterates what I've been saying above; the vail plan "says to the economy that people are interested in renewal."
My question is about how loud do RECs speak? What's the current capacity for RECs and how much has been sold off already? At what point will use of them catch up to available sources, or exceed the ability of programs like Native Energy to put them into development?
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Tom Stoddard Posted 12:41 am
02 Aug 2006
Regarding how loud RECs speak, certainly the theory is that buying RECs from existing (preferably recently built) wind farms demonstrates that demand is there for RECs, and by making these wind farms more profitable, that demand encourages additional investment. The problem with that is that current wholesale prices for REC represent a very very very small portion of a wind farm's overall economic return. So by buying RECs from existing wind farms, you send a market "signal," but at today's prices, that signal is weak. Given the weakness of that signal, new wind farms are getting built for other reasons. What we're seeing is utilities taking long-term positions on wind projects as a hedge against anticipated future legal requirements, and unloading the short-term RECs they have no need for onto the market at low prices.
That's why we focus on projects that really need REC revenues secured on a long-term basis to get financed and built, and that don't have a utility around that is willing to step to the plate on a long-term basis. And as the voluntary market only wants short-term purchases, we convert their one-year purchase, through our Future RECs model, into a purchase that has long-term impact for the project, by buying down its up-front construction costs. That way, our customers not only send a market signal, they actually help finance construction of a specific new wind farm that really needs their help.
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farnishk Posted 6:12 am
02 Aug 2006
Let's applaud the growth of renewable energy, and oppose the growth of coal. Let's applaud the use of hybrids, and oppose the use of SUVs. Let's applaud the new found climate conscience in politicians, and oppose their two-faced pro-growth policies.
The climate battle will be fought on many fronts, but the moment an army abandons one of these fronts is the moment the enemy swarms all over you!
Keith Farnish
http://www.theearthblog.org
http://www.reduce3.com
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spaceshaper Posted 4:42 am
23 Dec 2006
Let's save our applause for the walkers and the cyclists, and for those who build, design and preserve the civilized urban communities which enable the walkers and cyclists to live full, rich, and transportationally unimpaired lives.
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Formosa Posted 2:58 am
05 Feb 2007
The laws of physics improperly referenced!
This would only be true if there was a 1:1 ratio between the power source and the electric output. To use the automobile analogy - your car is burning fuel at 20mph or 50mph. The coal plant is creating steam (by burning coal) regardless of 50% or 100% output from the turbines. Base load isn't ramping up or down when windmills decide to come on line - now you are messing with the laws of Thermodynamics.
Indeed there is NO documented evidence after 20 years of large scale grid based industrial wind that it reduces fossil fuel use. Not a single coal plant decommission.
Komanoff continues to write of fiction and wishful thinking. How bizarre it is to read him musing about riding his bicycle to a electric hogging rock concert.
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wiscidea Posted 3:36 am
05 Feb 2007
Perhaps... if aware of the approaching crisis... give up material possessions, never use light bulbs (incandescent or fluorescent), live according to the natural rythms of light and dark, never use ari conditioning (try sitting still for a bit), never consume meat, and walk everywhere. If one needs an airplane to go somewhere, try meditating on why you feel the need to travel so far from your home or the need to transport material goods from one continent to another.
I've flown only four times in my life and wonder why so many people feel the need to fly so much. Try exploring the area around your home.
I'm not necessarily advocating this... just suggesting an answer to the question.
Forward!
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Formosa Posted 9:26 am
07 Feb 2007
Secondly, since wind does not blow all the time how do you figure you have purchased wind power when you flip the switch for your blender and there is no wind? Third, do you really believe that the power you receive at your home is being supplied from RE (read: Wind) being that the grid supplies demand from many sources according to the grid operator?
Isn't it true that since all those coal plants continue to burn day and night you really aren't accomplishing any reduction of global warming?
This is nice symbolism, but unless you go off the grid and create your own power (which I have done), I simply don't see how these certs accomplish much or even pass the common sense test.
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