Bet made on carbon offsets
Green challenge aimed at clean energy sources
By Jerd Smith, Rocky Mountain News
Published July 26, 2008 at 12:05 a.m.
Photo by GEORGE KOCHANIEC JR.
The Rocky
The Wray wind turbine, a mile south of downtown Wray, is one of four projects that will benefit from carbon offsets purchased by DNC delegates. The turbine generates 20 percent of Wray's electric power.
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."
smithj@RockyMountainNews.com or 303-954-5474
Offset checklist
Before buying an offset, ask yourself:
* Have you already done everything you can to reduce your own carbon emissions, such as turning down the thermostat, insulating your house, taking the bus? Experts say these are the most lasting, verifiable ways to shrink your carbon footprint.
* Who are you buying your offset from and how is the seller ranked among its peers? A handful of new Web sites rank carbon brokers based on the quality of their offsets and how much transparency they provide to consumers. One such site: carbon catalog.com.
* How is your carbon offset generated? It should come from a renewable energy project, such as a wind farm, methane generation project or solar generation. Tree planting also counts, though experts say such projects are harder to verify and sustain.
* Has the offset you're buying been verified by an independent third party who can confirm the accuracy of CO2 calculations?
* Are the offsets you're buying listed in a formal registry? This ensures that once they're sold to you, they aren't double counted, or sold again.
Post your comment
Registration is required. Click here to create your free user account, or login below.
Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.
Featured
-
2008 Voter’s Guide
Use our Ballot Builder tool to compare your viewpoints to the candidates.
-
A Dozen on Denver
Sandra Dallas wrote 'Lennie's tavern' for our ongoing fiction series. Check it out!
-
Rocky Multimedia
The news comes alive in our videos and slide shows. Catch up on today's events.
-
Bronco Dean's rant
Listen to Bronco Dean's totally biased pregame rant about the Broncos-Jaguars game.
-
Presidential Elections
See how Colorado counties have voted through the years.
-
County election profiles
A look at how residents in each Colorado county may vote.
-
A dream fulfilled
A Rocky Mountain News and MediaStorm production
-
Latest from Dove Valley
Click for more broncos videos.
-
Sam Adams' Open Mic
No. 44 means a lot to Floyd Little
July 26, 2008
6:19 a.m.
Suggest removal
roger44 writes:
Nancy Pelosi said the money goes to the government, which will raid the coffers like they did on social security and it will fail.
July 26, 2008
7:26 a.m.
Suggest removal
CORman writes:
Here's another site to add to your checklist where consumers can sound-off on carbon offset providers: http://www.carbonoffsetreview.com
July 26, 2008
8:17 a.m.
Suggest removal
lazier51 writes:
Wow, this one about made me fall out of my chair from laughter! Here is a little info about the little windmill that could in Wray, CO. It does not work and never has!! I repeat, the windmill has yet to produce a single watt of electricity. Check it out in the local Wray Gazette. Front page story. The democrats green convention is all smoke and mirrors just like Gov. Ritter's "no-energy" economy and global warming itself. I am glad to see the democrats have their priorities in line. Spending their time making sure the right trash is thrown into the right receptacle instead of focusing on the real issue such as the economy, the redefining of marriage and by far the most important, the war on Islamic terror. Way to go watermelons!
July 26, 2008
8:18 a.m.
Suggest removal
RegusPatoff writes:
Carbon offsets are nothing but another marketing ploy to shoulder the burden of being "green" without having to make any real sacrifices. It's one more way that those with big mouths and deep pockets can "play green" while doing nothing to change their own lifestyles (ahem... hey Rev. Gore... how 'bout traveling on a commercial plane every once in a while). I'm not saying that everyone who believes in carbon offsets is this way, but I want to see some of the "Champions of the Environment" DOING something. Personally, I get my daily dose of carbon offsets by not buying bottled water (no plastic), driving slower and smarter, turning off the lights, unplugging the tv and appliances... and so on. I challenge everyone to take off their lemming suits and be proactive instead of passive about the environment, and don't think you can "buy" your way to being green.
July 26, 2008
9:34 a.m.
Suggest removal
farmboy writes:
The buying and selling of carbon offsets is just this century's twist on papal indulgences. Under this one, followers can commit all the "carbon sins" they wants long as they pay money to the Church of the Holy Climate.
What a scam.
July 26, 2008
9:41 a.m.
Suggest removal
boogman writes:
Carbon offsets are a joke. I can't believe some people are dumb enough to buy into them. Yes I suppose some people will make money on them but many more people will lose money on them. Sounds like a pyramid scheme. algore buying carbon offsets from a company he owns - the right hand paying the left hand and then high fiving Pelosi on the way to the bank. Lets drill for some more oil so that I can put it in my SUV. Carbon credits don't get very many miles to the gallon.
July 26, 2008
1:57 p.m.
Suggest removal
JluvDC writes:
Carbon offsets is a huge scam. I really struggle to believe that people buy into it.
July 26, 2008
1:57 p.m.
Suggest removal
HopiMedicineMan writes:
Given the quantities of alcohol that will be consumed in August, perhaps we should be offering Booze Credits at $7.50?
July 26, 2008
2:56 p.m.
Suggest removal
NeilT writes:
Gene,
Carbon credits are a free market (you should like that, right?) solution to financing projects that benefit everyone. It doesn’t matter if you’re a green weenie or a tightwad conservative, some of these projects can benefit both groups.
Some credit companies are a joke. They are as transparent as mud, but the free market can weed these crooks out. The good ones can do a lot of good. This is no different than charities. Organizations like the Red Cross maintain excellent ratings in regard to how much of their donations actually go to the cause (usually better than 90%). If carbon credit companies followed this same system the crooks will not get any funding. Individuals and groups that are creating “credit watch” sites, and such, and are setting-up this system as we speak.
If you think cow crap-to-energy is snake oil, please click this link. It is just one of many REAL systems in place.
http://www.strausfamilycreamery.com/?...
July 26, 2008
4:39 p.m.
Suggest removal
SockRayBlue writes:
Hey! DNC! Send all the money you can to me. I need it for a total solar and wind conversion for my county. If this is not feasible then I can reduce the request to my home. Since I live smack dab in the middle of the US, the wind is always blowing either east to west or west to east. It all depends on where the majority of politicians are in this country at any particular time.
Please contact the RMN webmaster for my address.
p.s. I am the greenest of the green.
July 26, 2008
9:50 p.m.
Suggest removal
sutherix writes:
Jerd almost got it right.
Carbon markets could function effectively. In fact, without properly functioning markets, I don't think it will be impossible to address climate change. Unfortunately, todays carbon markets are a Wild West Freak Show and products are routinely hypervalued to an absurd degree.
The only reasonable way to value an enviromental commodity is by estimating the environmental benefits that the sale or transaction will produce/has produced. Selling REC's from the Wray turbine provided essential cash for this project, but it was not the only source of revenue to make up the additional cost of the clean energy it produced. Consequently, the Wray REC's are only overvlaued by a factor of 2 to 5. This contrasts with the vast majority of REC's which are hypervalued by a factor of at least 100. Writing about this one example without noting that it is an anomaly does her readers a disservice.
Smith also does not approach the most glaring mistake that the DNC is making. No matter how you decide to spend it, $7.50 will not reduce the equivalent GHG emissions resulting from refining and transporting the jet fuel, let alone the amount that comes out the engine. The entire concept of "carbon neutral" is the wildest of fictions. We live in an incredibly energy interdependent society. To be "carbon neutral", delegates would have to also offset a portion of the gasoline burned by the baggage handler that threw their suitcases on the plane.
Susan Greene of the Denver Post has been the only journalist to step into the punch about the DNC's shenanigans. She wrote (twice) that the dems ought to be talking about how they are going to green up the whole country, not just their excessive party in Denver.
It is really interesting to read about Susan Innis' (Governors Energy Office) complete 180 degree reversal on this subject. Back when she was on the board of the Center for Recursive Solicitations, she ignored the complaints that the REC's that GreenE was certifiying were almost universally hypervalued. Now that she is tasked with selling quality projects (we hope) for the state of Colorado, all of schuck and jive is a target for her cynicism.
It also should be noted that the Denver Post came forward with a critical look at the RECage back in May of 2007 after the no nonsense snow bunnies at Vail resorts got finished blasting us wth the goon ray.
July 26, 2008
9:50 p.m.
Suggest removal
lazier51 writes:
Forward69, take some initiative and find the article yourself or find me one that disproves it! You might have to think outside the box to get it but, it is possible. Hint: the article might not be online.
July 27, 2008
6:06 p.m.
Suggest removal
lazier51 writes:
Forward69, take some initiative and find the article yourself or find me one that disproves it! You might have to think outside the box to get it but, it is possible. Hint: the article might not be online.
July 28, 2008
11:42 p.m.
Suggest removal
carlindenver writes:
Here, here try this---- http://www.humanevents.com/article.ph.... And try Face the State Colorado. I'm sure this will get further play as this week unfolds. What is going to be entertaining is the double talk and double speak the National and our "local" Democrats will offer. Unbelievable B.S. Never ending.