Shrinking carbon’s muddy footprint

Offsets present confused picture to consumers and businesses

By Toby Van Fleet

Pamplin Media Group, May 15, 2008, Updated Oct 30, 2009 (2 Reader comments)

Melanie Conner / GETTY IMAGES

The Klondike II wind farm towers over the landscape near Wasco. Projects like the wind farm allow additionality, meaning they can qualify as carbon offsets.

When the folks at Mount Hood’s Timberline Lodge decided to “green” their new ski lift, the equation was pretty simple. Figure out how much electricity the lift would use in a year and offset that with an annual investment in wind turbines or solar power.

For the 2007-08 ski season, Timberline purchased nearly $3,000 of “green tags” from the nonprofit Bonneville Environmental Foundation to offset the lift’s electricity consumption.

“We’re just trying to do our part,” says Jon Tullis, Timberline spokesman.

A green tag, also known as a renewable energy credit or REC, represents proof that a megawatt-hour of electricity — enough to light a 100-watt bulb continuously for about a year — was generated by a renewable source.

As the climate changes, every flip of a light switch or car trip downtown has become a kind of shameful burden. “Whether people understand the physics or not, they understand that their electricity consumption has negative effects on the future,” says Rob Harmon, senior vice president of the Bonneville foundation.

Fueled by a complex mix of green guilt and good intentions, a vast market in “voluntary” carbon offsets has sprouted almost overnight, generating $331 million in global carbon trading in 2007, according to Ecosystem Marketplace and New Carbon Finance, two market tracking firms.

Consumers — and businesses — looking to “do the right thing” simply want to trust that their money is well spent, whether it goes to solar panels or tree planting. Behind the scenes, however, environmentalists, scientists, and renewable energy advocates are locked in an ongoing debate over what should count as a real offset and what shouldn’t.

The RECs sold by Bonneville are a good example.

Buying an REC gives the buyer bragging rights that can be as nonspecific as “climate neutral” or as precise as “powered by wind,” a claim that conjures up a windmill atop the buyer’s roof.

But it’s not that direct. That’s because all electricity, whether it was created with coal, wind or a stationery bike, flows into the grid and mixes together.

“You and your neighbor are going to get the same electrons,” Harmon says.

Do green tags count as offsets?

Bonneville markets its green tags to businesses and individuals as carbon offsets that apply not only to electricity generation but also to activities that cause greenhouse-gas emissions — like the ones spewed from your tailpipe on the way to the ski slopes.

Buying RECs, they say, supports renewable energy projects that displace dirty power in distinct, measurable blocks and therefore balances out the unavoidable emissions that result from our very existence.

It’s a logical equation, and one that brings comfort to consumers seeking absolution for their environmental sins. But within the fast-evolving industry now selling those “Hail Marys,” some criticize the equation of RECs with carbon offsets.

“RECs weren’t really designed as offsets,” says Mark Trexler, a contributor to the United Nations’ Intergovernmental Panel on Climate Change, whose reports on global warming have galvanized public attention to the issue. “They were designed to (encourage) renewable energy.”

Trexler, who is credited with working on the first carbon offset project in 1991 during his tenure at the World Resources Institute, now is the managing director of EcoSecurities Global Consulting Services, an international firm that develops and trades emissions credits in the regulatory market and operates a Portland office.

Mike Burnett, executive director of the Climate Trust, a Portland nonprofit that sells carbon offsets, says that RECs and offsets are both valid, but represent different things.

“Clearly (RECs) have greenhouse-gas benefits,” Burnett says. But, he adds, “Everyone’s trying to shoehorn everything into an offset.”

How to tell REC from offset?

RECs and offsets represent different approaches to global warming. RECs are measured in megawatt-hours of “clean” electricity, whereas carbon offsets are bought and sold as tons of carbon dioxide emissions.

The subtleties are not widely understood. Timberline hadn’t even considered them, Tullis says, because Bonneville markets their RECs as carbon offsets. It makes sense: Burning less coal for power results in less carbon dioxide.

Critics’ main objection is something called “additionality.” It’s an issue that has made RECs (and offsets in general) the target of some skepticism, fueled by stories about misspent funds and dubious projects.

Simply put, additionality means that to qualify as a carbon offset, projects can’t be business as usual.

If the project was started because of the carbon market, it’s additional, Trexler says.

A new project to capture methane on a dairy farm? Yes.

Paying a farmer to practice no-till farming when he’s already been doing it for 10 years? No.

Investing in a project that’s already required by law? No.

“If they’re not additional,” Trexler says, “they’re not offsets.”

But Harmon of Bonneville says that those who criticize RECs for failing the additionality test simply don’t understand how the electricity grid works.

“How do you define whether a renewable energy project is additional?” he asks. “In the final analysis, when wind power enters the grid, what gets backed out of the grid is fossil fuel.”

Carbon confusion continues

Until the Federal Trade Commission or some other entity steps in, voluntary offsets and RECs remain unregulated. In the absence of government rules, consumers — from homeowners and skiers to multinational corporations — rely on certifications that guarantee that what they are buying is real and valid.

To cut through the confusion, Trexler published “A Consumer’s Guide to Retail Carbon Offset Providers” in December 2006.

“We had to travel with bodyguards after that,” says Trexler, explaining that the guide angered a lot of people in the carbon marketplace who didn’t earn a top spot on its list ofproviders.

Bonneville didn’t make the list — a notable omission, since Bonneville was the first group to sell RECs and remains the only national nonprofit to do so.

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