DNC betting on carbon offsets

By Jerd Smith, Rocky Mountain News

Published July 25, 2008 at 8:50 p.m.
Updated July 25, 2008 at 8:50 p.m.

Text size  

• 3 Comments
• Email
• Print

Thanks to a windmill that toils day and night producing clean electricity, the tiny eastern plains outpost of Wray has landed in the center of the fast-moving carbon-offset world, a place described by some as a new-age, environmental Wild, Wild West.

That's because it's uncharted territory, with little yet in the way of law and order.

Wray's windmill, and three other clean-energy projects, are at the heart of the Democratic National Convention's Green Delegate Challenge, a program that asks delegates from all 50 states to purchase green credits so that the carbon dioxide generated from their participation in the Denver convention can be offset.

To date, some 37 delegations have agreed to participate, with four states signing up all of their delegates.

Carbon offsets are a free-market environmental commodity designed to attract cash to clean-energy projects so that ultimately the planet produces fewer greenhouse gases and global warming can be mitigated.

Carbon offsets were virtually unheard of five years ago. But the market is growing exponentially, as much as 40 percent a year according to various estimates.

Unlike other commodities, though, such as corn or wheat, you can't see a carbon offset, you can't take it home and put it on a shelf, and often you have no idea where it's being produced.

"The most common criticism is that they are not a panacea for global warming," said Susan Innis, program manager for Colorado's own carbon fund, which launches next month. "To some, it's like www.cheatneutral.com. Pay a couple to be faithful to offset your own infidelity."

Delegates ante up

Still, 5,000 Democratic National Convention delegates have been asked to do just that, to ante up $7.50 each to buy a carbon offset through NativeEnergy, a Vermont-based for-profit organization. The firm was one of the early players in the environmental commodity world and sells offsets to everyone from Al Gore to the Dave Matthews Band.

"It's a big deal for NativeEnergy and for the DNCC," said Billy Connelly, marketing director for NativeEnergy. "They're demonstrating that they walk the talk, that they reduce their impact on the environment and then offset the inevitable remainder of carbon that's going to be created by the convention."

When the DNC approached NativeEnergy about its Green Delegate Challenge, the company went to work looking for offsets that fit the bill. Ultimately it found four projects as sources for the DNC's offset program: The Wray windmill, a second wind turbine in rural Minnesota, a methane digester fueled with farm animal waste in Pennsylvania and another methane digester fueled by landfill gas in Iowa.

Each benefits a local community, each brings new, CO2-free electricity to the grid, and each project's long-term performance can be guaranteed over a 25-year power-purchase agreement, according to Connelly.

In Wray, for example, NativeEnergy invested about $250,000 to help finish the turbine project. It recoups its investment, in part, by selling offsets.

But NativeEnergy, and other for-profit brokers, won't disclose many of the financial documents that underlie their business practices, such as the exact size of their investment, how many offsets that investment is worth, or annual revenues.

NativeEnergy gets high marks for selling offsets that have been verified by a third-party. The company's offsets are also registered, meaning that they can't be sold more than once, a problem that has dogged the fledgling green commodities from the start.

Lack of regulation

Lori Bird, a senior energy analyst at the National Renewable Energy Laboratory, is an expert on offsets and buys them herself.

She said there is a benefit to using offsets to reduce CO2 emissions. "There just isn't a lot of oversight yet. It's a really young field that took off before the (regulatory) infrastructure could catch up."

While regulations are beginning to emerge, critics say providers such as NativeEnergy and others have to provide more transparency into both their financial dealings and the technical aspects of what they're selling.

Gideon Greenspan, an Israeli Internet entrepreneur, has created one of the first Web sites that ranks carbon brokers based on the amount of information they provide to consumers on their Web sites.

His site, carboncatalog.com, ranks NativeEnergy 55th out of 85 providers worldwide, in part, he said, because it doesn't provide enough information to consumers.

"I created the catalog because I had begun buying offsets for myself and found the process incredibly frustrating," Greenspan said. "There were a lot of providers out there, but assessing how good or bad they were, there just wasn't a lot of information."

NativeEnergy's Connelly dismisses Greenspan's criticisms and his Web site.

"We're extremely transparent," Connelly said. "The only thing we're not disclosing are our financials. Greenspan is one guy. He doesn't have a lot of credibility."

In fact, other widely cited rankings, including one by the Tufts University Climate Initiative, placed NativeEnergy in the top tier of providers. "That's because of our transparency, our disclosure and the types of projects we use," Connelly said.

Still, concerns about the viability of the carbon offset markets remain high. Last year, congressional hearings were held. Now the U.S. Federal Trade Commission (FTC) is writing rules for the sale of carbon offsets.

Wray schools benefit

Colorado Attorney General John Suthers is also concerned about the rapid growth of offset sales and the lack of oversight and regulation that exists.

"There is no question that carbon offsets are the new frontier in consumer protection because there are no specific rules that pertain to them," Suthers said.

And that's worrisome, given Colorado's well-known environmental ethic.

"I suspect that if you analyzed the Colorado population," Suthers said, "we're probably more environmentally responsible as a whole. But a lot of people won't take the time to see if the offsets they're buying have the transparency that is needed or the verification that is needed."

Suthers said after the FTC establishes its rules, his office will likely begin a public information campaign to help consumers choose viable offsets.

In the meantime, Ron Howard, superintendent of the Wray School District, will be keeping a close watch over his windmill, a project that generates thousands of dollars for the region's cash-strapped schools by selling green electricity to the town of Wray.

Howard is hoping the district can save enough money from those electric sales to add another turbine in the future.

"In tough times, we'll take all the money we can get," Howard said. "But this is a lot more than just a money thing for us."

• July 28, 2008

  6:09 p.m.

  Suggest removal

  prk166 writes:

  How is the Wray turbine generating money for the schools? I thought it still wasn't not generating electricity.

• July 29, 2008

  10:03 a.m.

  Suggest removal

  Tantalus4440 writes:

  A windmill that does nothing (but blow hot air around)...Sounds like a great symbol for the DNC/Obama coronation, er, convention.

• July 29, 2008

  12:28 p.m.

  Suggest removal

  YUMAPIONEER writes:

  There is always some guy trying to build a reputation, get appointed to a government job where the taxpayers can support his habit of spending other peoples money for more projects to expand his reputation and get a bigger more high paying government job. The people of Yuma County know who used this wind project and why. If you can't possibly get elected, get appointed.

Featured

• Rocky Multimedia

  

  The news comes alive in our videos and slide shows. Catch up on what's happening today.

• Holiday Lights

  

  Is your house the jolliest on the block? Submit your holiday lights display.

• Holiday Gift Guide

  

  Looking to get a jump-start on the holiday shopping season?

• Mount Crushmore

  

  Which four Broncos greats should be immortalized on Mount Crushmore? Vote here.

• Bronco Dean's rant

  

  Listen to Bronco Dean's midweek rant on the Chiefs.

• Broncos Video

  

  Get the latest from Dove Valley as the Broncos prepare for Sunday's matchup.

• Calendar wallpaper

  

  Download this month's desktop wallpaper calendar

• Sam Adams' Open Mic

  

  Open Mic: Stirrin' the Soup with Matt Iseman

• The Rocky @ 150 Years

  

  Read the Rocky's coverage of Colorado's cannibal, Alfred Packer, in 1886.