PG&E's 'ClimateSmart' offsets are anything but
Breaking all the offset rules 16
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Posted 2:16 PM on 9 Jul 2007
by Joseph Romm -
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Joseph Romm is the editor of Climate Progress and a senior fellow at the Center for American Progress.
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Delay And Deny Posted 7:11 am
09 Jul 2007
Back in the Civil War if a rich son was conscripted, the family could pay a poor guy to step in and fight for him.
This is what Carbon Offsets are.
John Bailo
You Read It Here First
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odograph Posted 7:34 am
09 Jul 2007
I certainly got the idea, that if a better or more effective offset came along, the author would be open to it.
See also, Hasty Generalization
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GreyFlcn Posted 7:50 am
09 Jul 2007
But yeah, the real question is why they aren't selling green electricity.
i.e. Paying for someone to put green power on line.
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GreyFlcn Posted 7:55 am
09 Jul 2007
http://www.pgecorp.com/corp_responsibility/reports/2004/e ...
5 million dollars is a pretty penny.
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Sam Wells Posted 8:01 am
09 Jul 2007
Maybe them really smart Californians really screwed the pooch this time. How embarrassing.
/sammie
Onward through the fog
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GreyFlcn Posted 8:08 am
09 Jul 2007
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naturescene Posted 8:17 am
09 Jul 2007
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Adam Stein Posted 8:24 am
09 Jul 2007
As you know, I'm posting some further thoughts on this topic, but one thing that's just screaming out to be addressed now: the green power purchases you like so much are exactly the same thing as carbon offset programs. They work the same way, the have the same issues, etc., etc. For example, additionality is just as big an issue for RECs as it is for offsets. And a huge portion of the offsets generated under the CDM come from wind.
There are technical differences between RECs and offsets -- for starters, RECs are denominated in megawatt-hours and offsets are denominated in metric tons -- but the technical differences don't mean that much at the level that you're analyzing these programs.
So purchasing green power, while a good thing, is not the same as "cleaning up your own house." Purchasing green power does not, for example, give you license to waste as much electricity as you want guilt-free, any more than offsets give you license to buy a fleet of Hummers.
- Adam
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odograph Posted 8:33 am
09 Jul 2007
I note that the Northerners do not put all their eggs in this basket, either.
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BiggusCattus Posted 10:35 am
09 Jul 2007
Yet another offsetting program, where the consumer pays the corporation. I can't believe people go for these schemes; PG&E is laughing all the way to the bank.
Your obligation to offsetting carbon is completely, 100 percent incorporated in the price of the goods and services you pay for. While it is true the the economic system runs a little roughshod over the environment right now, as soon as some of these cap and trade programs go into effect that anomaly will be substantially corrected. Business will very quickly pass on these costs to you.
Here's my advice; take that money you planned to put into voluntary carbon offsets and go buy dinner for your family; go buy steaks, go buy lobster, and enjoy it. With the money you have left over, put it in the bank. For as soon as
obligatory carbon pricing hits the economy, you are going to pay dearly.
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SustainableGreen Posted 12:42 pm
09 Jul 2007
Well, for the first time Bailo has provided something that is not pure distractive troll crap. His comment about the rich avoiding service in the Civil War is very close to the "rich man's war, poor man's fight" point I made in one of the other threads on offsets. Borrowing from another Civil War theme, 'of the rich, by the rich, for the rich'. [Deepest apologies to Lincoln.]
And the obvious references to graft and abuse--precisely what I have been saying. These ideas and their proposals need to be attacked at every opportunity, for they are wrong and have no possible benefit for reaching sustainability, and in fact will hinder progress, and further widen the gap between the 'haves' and the 'have-nots'.
What we need is advocacy and activism, not passive weak reporting. What we need is fundamental change, not sucking up to the Corporate Oligarchy. If the electricity utility you choose actually has on line sustainable electricity (from Wind or Sun), you would have the option of purchasing Green Power. Otherwise it is FRAUD.
David
Sustainability For Life
Messages done with sustainable energy, with Wind and Sun!
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sunflower Posted 1:54 pm
09 Jul 2007
Imagine you are rich. What happens to the brain? What happens to time? It finally clicked for me. Yesterday does not exist - no grudge matches because I won, I have the money by hook and by crook. No emotion about yesterday. Tomorrow does not exist - no need to think about getting money, no worries, no need to think about tomorrow. There is only today, one day to have fun, to gamble, to play rich games.
The lack of interest in climate is a symptom of having too much money and no worries. The brain does not worry the rich, does not worry about the climate, nor about the lives of the poor. The rich have disassociated. It is organic, not their fault. They live one day at a time, outside of the continuum, and play money games with offsets, green politics, this and that, but not looking for real solutions, no real vision about the future, no real concerns. They are about as substantial as smoke in the wind.
I, for one, will not suck up to these frames of rhetoric, will not be passive. I most heartily agree, we need fundamental change. No more games.
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RPakhurst Posted 9:36 am
11 Jul 2007
Several mutual friends and colleagues forwarded me your blog on ClimateSmartTM and I have the utmost respect for your work. However, your posting has a number of inaccuracies and I am writing to clarify how PG&E designed and plans to implement the ClimateSmart program.
We conceived of ClimateSmart during our January 24, 2006 testimony (https:/www.pge.com/regulation/ClimateProtectionTariff/Testimony/PGE/2006-01-Fwd/ClimateProtectionT
ariff_Test_PGE_20060124-01.pdf) before the California Public Utilities Commission (CPUC):
"PG&E's voluntary [program] is designed to be the proverbial "icing on the cake," supplementing other programs and policies that address climate change." (page 1-2)
That means ClimateSmart must be understood in the context of PG&E and California's ambitious energy and climate change policies.
As a world leader in energy efficiency, we are investing $1 billion in enhanced energy-efficiency programs from 2006 to 2008. (http://www.pge.com/about_us/environment/features/energy_e ...)
PG&E delivers some of the cleanest electric power of any major electric company in the United States. And we are aggressively adding renewable electric power resources to our energy portfolio. (http://www.pge.com/about_us/environment/features/clean_en ...)
We are committed to leading by example when it comes to climate change. (http://www.pge.com/about_us/environment/features/climatec ...)
After an eleven month public approval process, the CPUC approved the program (http://www.cpuc.ca.gov/word_pdf/final_decision/63046.doc) on a 5-0 decision on December 14, 2006. In their summary, they stated:
"Pacific Gas and Electric (PG&E) demonstrates strong environmental leadership by being the first utility in the nation to offer its customers a means to offset their greenhouse gas (GHG) emissions. This proposal is a very important step in developing awareness of the causes of global warming and creating a sustainable and credible emissions offset program." (page 2)
But don't take our word for it; listen to what others have said.
Numerous organizations sent in letters during the extensive CPUC regulatory proceedings on ClimateSmart, including Environmental Defense, Small Business California, and the Natural Resources Defense Council. Here is a link to those letters (https:/www.pge.com/regulation/ClimateProtectionTariff/Testimony/PGE/2006-01-Fwd/ClimateProtectionT
ariff_Test_PGE_20060606-01.pdf).
Since the unanimous approval of the program by the CPUC, here is a sampling of what climate change policy leaders have said:
"ClimateSmart, combined with energy efficiency and solar power, can shrink our climate footprint. We hope that ClimateSmart can play an integral role in helping San Francisco meet our aggressive greenhouse gas emissions reduction goals."
-- Jared Blumenfeld, Director, Department of the Environment, City and County of San Francisco
"ClimateSmart's focus on transparency, accountability, and environmental protection provides a great example for all carbon offset programs."
-- Diane Wittenberg, President, California Climate Action Registry
"The Climate Group congratulates PG&E for its ongoing leadership to address global warming through programs such as ClimateSmart. The company's actions are serving to educate and deepen community awareness of the issue, while providing an opportunity for the general public to take positive steps to reduce their carbon footprint."
-- Mark Kenber, Policy Director, The Climate Group
"We can prevent the most devastating consequences of global warming, but only if we act swiftly and decisively to reduce global warming emissions. By meeting strict standards for offsets, the ClimateSmart program will engage individuals and businesses as part of the solution in the fight on global warming."
-- Karen Douglas, Director, California Climate Initiative, Environmental Defense
"NRDC today reaffirms its view that the ClimateSmart program is an effective way for PG&E customers to invest individually in rigorously verified environmental benefits, even as we continue to emphasize (like PG&E itself) that voluntary measures are complementary to the mandatory measures that are needed to meet the challenge of global warming."
-- Luke Tonachel, Energy Program Analyst, Natural Resources Defense Council
"I am delighted to see the PG&E ClimateSmart program opening to enrollment, and intend for our family to sign up right away. Voluntary programs such as ClimateSmart illustrate the opportunities that exist to address global warming, and the power of individuals to send a message that personal action is both possible and significant."
-- Dan Kammen, Professor in the Energy and Resources Group, in the Goldman School of Public Policy, and Director of the Renewable and Appropriate Energy Laboratory, University of California, Berkeley
Our partners joined with us to debate the challenges of the voluntary carbon market.
On June 28, when the program was launched (http://www.pge.com/news/news_releases/q2_2007/070628.html ...), we held a symposium called "Voluntary Carbon Offset Programs: A License to Pollute or a Climate Change Remedy?" This program featured the views from:
Ricardo Bayon, Director, Ecosystem Marketplace and Author of Voluntary Carbon Markets
Cheri Chastain, Sustainability Coordinator, Sierra Nevada Brewing Company
Eric Holst, Manager, Center for Conservation Incentives, Environmental Defense
Dan Kammen, Professor, Energy and Resources Group, in the Goldman School of Public Policy, and Director, Renewable and Appropriate Energy Laboratory, University of California at Berkeley
Peter Liu, Initial Founder and Vice-Chairman, New Resource Bank
Wendy Pulling, Director, Environmental Policy, PG&E
Laurie Wayburn, Co-Founder and President, Pacific Forest Trust
Diane Wittenberg, President, California Climate Action Registry
The audio of the program can be heard here (http://www.pge.com/about_us/environment/features/news/cli ...). We encourage you and your readers to listen to it.
Through ClimateSmart, PG&E will be purchasing greenhouse gas emissions reductions through a formal, competitive process.
We are investing 100% of the ClimateSmart payments toward new GHG emission reduction projects in California.
On June 28 we initiated a competitive process (http://www.pge.com/about_us/environment/features/climates ...) to select the projects in which we will invest. The process is based on PG&E's best practice of renewable and conventional energy purchasing process. We are currently in the process of collecting those offers and will select the projects later this year. Eligibility for the ClimateSmart competitive bid process requires that Projects meet the stringent requirements of either the Forest Project Protocol (http://www.climateregistry.org/docs/PROTOCOLS/Forestry/Fo ...) or Livestock Project Reporting Protocol (http://www.climateregistry.org/docs/PROTOCOLS/CCAR_Livest ...) of the California Climate Action Registry (http://www.climateregistry.org/) (Registry). It is designed to include other types of GHG emission reduction projects as the Registry completes and adopts a broader range of project measurement protocols.
PG&E is applying stringent additionality requirements.
Additionality is most commonly defined as doing something that wouldn't have been done under a "business as usual" condition. While that is a simple principle, most people involved in quantifying GHG emissions reductions agree that it is complicated to implement. In order to quantify these reductions, PG&E is applying two additionality tests to projects submitting bids to our request - regulatory additionality and financial additionality.
By following the stringent Registry protocols, we are ensuring regulatory additionality. The Registry's Forest Project Protocol (http://www.climateregistry.org/docs/PROTOCOLS/Forestry/Fo ...) states that "Project Developers are required to describe their project activity and explain how their project activity exceeds, or is additional to, the baseline qualitative characterization, including any mandatory statutes or regulations used to characterize the project baseline." (page25)
In addition to the Registry additionality requirements, PG&E - as a part of our competitive solicitation process (http://www.pge.com/about_us/environment/features/climates ...) - is requiring every bidder to specify exactly how ClimateSmart funding would be used for new projects. This is our financial additionality test. In our request for offers we state that we "will require all ClimateSmart Projects to provide evidence that but for ClimateSmart funds, the Project that generates the Registry-certified GHG emission reductions would not have occurred." (page 9)
As you indicated in the Salon.com article that you referenced in your post, people should not invest in carbon offset program if they don't meet basic additionality standards. PG&E won't invest in them and neither should anyone else. The pictures of the van Eck and Garcia River forests are just examples of the projects that are going through the Registry certification process. They may or may not qualify for the PG&E program based on their response to the competitive bid process. You blog has shown us that the van Eck picture may be confusing, so we will take a fresh look at how we caption that photo to make sure that we are being as clear as possible.
Accountability and transparency are key aspects of this program.
With ClimateSmart, our goal is to create a voluntary GHG emission reduction program with the highest standards of accountability and transparency. In developing the program, we worked with regulators, key environmental groups, and other stakeholders to create this process, incorporating a wide variety of best practice oversight and verification measures. Some of the measures we have put in place to reach these high standards are:
Limiting investments to projects with an approved project protocol from the Registry and accepted by the CPUC
Seeking ongoing feedback and input from an External Advisory Group (http://www.pge.com/about_us/environment/features/external ...) of respected community, environmental, business, and government leaders
Requiring that all emission reductions for the selected projects are independently certified and registered with the Registry
Permanently retiring all of ClimateSmart's certified GHG emission reductions, which means they cannot be used by PG&E or anyone else for any other purpose
Requiring an independent, annual program audit and regularly reporting the results to the CPUC and enrolled customers
Through the ClimateSmart competitive bidding process, we are also requiring all projects to be new. Even if a project had been certified, PG&E will not purchase the reductions unless they occurred after December 14, 2006, the date which the CPUC unanimously approved the program. PG&E will only enter into contracts for projects that invest in new GHG emission reductions that would not have otherwise occurred.
Voluntary programs are only part of the solution.
As stated by Peter Darbee, Chairman, CEO and President of PG&E Corporation before the U.S. Senate Committee on Environment and Public Works on June 28 (http://epw.senate.gov/public/index.cfm?FuseAction=Files.V ...), PG&E believes:
"Voluntary programs alone are insufficient and will not send the appropriate price signal to U.S. industry to make a measurable impact on global climate change. Only a mandatory, national reduction program is capable of stimulating sustained action and investment on the scale required to meaningfully reduce emissions and establish the U.S. as a leader in the response to global climate change."
Consistent with our policy position on mandatory regulation, in 2006, PG&E joined with other leading businesses and environmental nongovernmental organizations as part of the U.S. Climate Action Partnership (http://www.us-cap.org/) to develop a set of policy principles and a legislative framework for a federal, market-based, mandatory climate change program.
And, while we prefer a national approach to addressing climate change, we also recognize the important role that states can play--in terms of acting as a catalyst for federal legislation, bringing forth innovative ideas and approaches to tackle the complexities of the issue, and making progress toward combating climate change. That is why we worked constructively with the California legislature and the Administration to enact AB 32 (Nunez/Pavely), the Global Warming Solutions Act, and were the first major utility to support its passage.
We also supported passage of SB 1368 (Perata), which requires that all power sold to utilities in the state under long-term contracts meet a GHG emissions performance standard that is equivalent to that of an efficient, combined-cycle natural gas plant. Implementation of these two pieces of legislation will ensure that California continues on a path of reducing its overall carbon footprint and challenging its businesses to do the same.
The ClimateSmart program was designed as a demonstration program to provide customers with an option to mitigate the GHG emissions associated with their own energy use. When mandatory GHG regulations are about to be implemented, PG&E will re-evaluate the program and determine if it should be ended or modified to ensure consistency with any such new mandates.
We look forward to continued discussion on these important topics and would welcome the opportunity to discuss ClimateSmart, as well as PG&E's broader commitment to climate change, with you personally the next time you are in San Francisco.
Kind Regards,
Robert Parkhurst
Pacific Gas and Electric Company
ClimateSmart Manager
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GreyFlcn Posted 9:56 am
11 Jul 2007
For instance, warmer temperatures melts white reflective sea ice, which leads to warmer temperatures, which melts more white reflective sea ice, etc etc.
1 ton of carbon offset now, is not equivalent to the effect of 1 ton of carbon offset 20-40 years in the future.
Much in the same way that taking out a loan for $10,000 today, and paying it back tommorow.
Is not the same thing as taking out a loan for $10,000 today, and paying it back in 20-40 years.
How is that not a fundamentally disqualifying flaw in the whole "plant trees" offset scheme?
_
By contrast, maintaining mature rainforrest is likely undervalued, as the additional carbon mass added is near immediate.
But in addition, by virtue of maintaining it you are avoiding a near equal or greater ammount of carbon maintained in the peat soil beneath the trees. (Peat is very important)
In addition, the tropics share a disproportionate effect of direct heat reflection, by putting out reflective water vapor in the day reflecting sunlight, and not putting up water vapor at night allowing for excess heat to escape.
There's also the addition of evaporative cooling.
http://www.llnl.gov/pao/news/news_releases/2006/NR-06-12- ...
http://www.llnl.gov/pao/news/news_releases/2005/NR-05-12- ...
By comparison, growing trees in higher latitudes may be overestimated due to the fact that they trap increasingly more heat than they reflect at higher latitudes.
_
In addition, what about when those tree leaves decompose? Don't they put up CH4? Which is 23 times more potent than CO2?
Certainly if there is any benefit to be had with trees, it is vastly over estimated with new trees in California, and vastly under estimated with old trees in the tropics.
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JennyAmes Posted 2:45 pm
11 Jul 2007
I am new to Grist and your regular commentary, but I am quite familiar with emission reduction projects and the general rules that accompany them. From your postings, it is clear that you are passionate about solutions to global warming.
If this is true, then you will need to acknowledge that, in additon to our overuse and over-reliance on fossil fuels, we must do something about land use and primarily our forests since they currently contribute to roughly 20% of human-caused CO2 emissions (check the UN Ecosystem Millenium Report). Historically, the loss of our forests have contributed up to 40% of overall CO2 emissions. When our forests are lost or liquidated, we lose the carbon that they store to the atmosphere as CO2.
The California Climate Action Registry Protocols are designed to quantify the climate benefits when forest loss is prevented and the carbon stores that our forests once had are restored. The tremendous significance of the California Climate Action Registry is that it is the first Registry in the world to acknowledge that forests are a part of the global warming problem and solution, and provides standardized methodologies to quantify climate benefits. I encourage you to learn more about the Registry's forest protocols and the nexus between forests and global warming.
I think other postings have done a good job of distinguishing some of the issues that you have confused - notably that PG&E's request for proposal process has just started and reduction projects have yet to be approved - not to mention that the passage of AB 32 does not mean, whole cloth, that any reductions in California are no longer additional.
Setting the PG&E program aside, there are a couple more issues that need clarification. The first issue is related to your understanding of additionality and how forest-based emission reduction projects are implemented. An evolving approach to emission reduction projects is the use of a performance standard baseline. Since baselines are hypothetical projected scenarios of "what would have happened in the absence of a reduction project" policy-makers must determine what that is. So, instead of doing a subjective analysis, which is extremnely difficult to analyze and certify, a performance standard is an attractive and credible approach that can be consistently 3rd party certified. The effect of this approach is that the program itself determines additionality (and absorbs the risk) versus leaving the consumer or certifier to try to figure it out on a case by case basis. The California Climate Action Registry, in general, uses this approach and other programs are moving toward this as well (see WRI protocols).
Your idea of additionality also seems to misunderstand that GHG reductions from a forest project accrue over time - as the forest grows. The analysis of whether a project will be additional or not takes place at the time the project is started (i.e., time 0). Actual reductions may not take place OR BE SOLD until reductions (the absorption of carbon) actually occurs, which may not happen until 5, 10, 15 years after the project is initiated since trees take time to grow. Your logic with respect to additionality and criticism of the VanEck project would lead one to assume that no project reductions that accrue after initiation (i.e., time 0) would be additional.
You seem to accuse the VanEck project of not being additional because an easement (which is a requirement of the Registry to secure the permanence of reductions) was already placed on the property. Did you ever ask when the project started or if the start of the project was coincident with the easement? I think it is a prudent question to ask.
Finally, it seems that your post has another subliminal undertone that I think is unfortunate. Your analysis implies that it is not alright for emission reduction projects (forests or otherwise) to make a profit. This criticism ignores s fundamental issue that is driving emissions. In the case of forest based emissions, it is the (our) consumer demand for residential/commercial development, cheap wood products and investment profits (as shareholders) that contributes to the depletion of our forests and their climate benefits (aka forest-based emissions). One of the few tools that we have is to make the conservation and restoration of our forests financially more attractive than their liquidation.
While you may not have intended this from your article, the implication is that it's okay for forest conversion and depletion to make a profit, but we should not make conservation, restoration and better stewardship profitable. I encourage you to understand the dynamics and drivers of forest loss/depletion and ultimaetly GHG emissions to better inform your next article.
Sincerely,
Jennifer
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nancyw Posted 10:39 am
17 Jul 2007
Regarding your article on the PG&E ClimateSmart program, there are a few areas that need to be clarified, particularly regarding forests.
The California Climate Action Registry recognizes reducing climate change requires a multitude of strategies but forests can be a part of a comprehensive strategy. To effectively address climate change we need to change the way we produce and consume energy. This transformation will take time and forests are an important element in a bridge strategy.
Contrary to what is stated in your article, the Registry is not oblivious or indifferent to the potential albedo effects of forestry projects, (which are still being understood by the scientific community). The Registry's California Forest Protocols and reduction projects associated with them, however, do not decrease the albedo for the following reasons:
1.) The Conservation Management Protocol relies on implementing sustainable management practices that maximize the sequestration of carbon on land already covered by forests.
2.) The Reforestation Project Protocol relies on reforesting land that has historically been under cover by forest in the first place.
3.) The Conservation Project Protocol relies on maintaining existing forest cover, in other words, protecting forests from conversion.
To support our commitment to developing measurement tools that facilitate a comprehensive strategy on climate change, The California Climate Action Registry is in the process of developing additional greenhouse gas reduction project protocols including: transportation related reductions; landfill gas capture and destruction; port electrification; and truck stop electrification, among others.
The Registry first and foremost works with members to encourage them to identify internal reductions before they use offsets. We support the PG&E ClimateSmart program and believe it is of the highest integrity and will make a positive impact on the reduction and sequestration of greenhouse gases.
Regards,
Sam Hitz
Vice President of Policy
California Climate Action Registry
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