At Standard Carbon, we do not sell  RECs.  We do not believe that there is anything wrong with the concept, but we want our customers to have an iron clad guarantee that their emissions are being reduced, and this is how we achieve that.

RECs, or renewable energy credits, are an environmental credit that is created by a clean energy project such as wind, solar, biomass, hydro etc. Often they carry a “certification label” from a non-profit like the Center for Resource Solutions (green-e) or the Environmental Resource Trust. RECs exist because there is difference in cost between producing renewable energy and non-renewable fossil fueled energy.

To create an REC, the positive environmental attributes of the renewable energy are striped off and sold to make up part of the difference. For example, an electrical grid has three power plants: two coal fired, and one wind farm. It costs the coal fired plants $3 to produce one unit of power, but the wind farm $4 per unit of power. The wind farm then sells a REC (also called a green tag) to a willing buyer to help subsidize the higher costs of operating the wind farm.

The idea is to promote the competitiveness of clean power by creating an exchangeable credit that can be sold to any willing buyer. This helps consumers and clean power companies because even if there is not a wind farm or other clean power plant connected to your power grid, you can purchase the environmental attributes from one as if it was connected to your grid.

RECs are not the same as carbon offsets. A true carbon offset must meet strict tests for “additionality.” That means that it is not a subsidy to the power company, but rather a payment that changes the usual way that business is conducted. For instance, an existing hydro dam could receive offset credits if it made an investment to increase the yearly efficiency of its water flow to produce more power from a renewable stream. This “additional” clean power reduces the emissions produced by more dirty power plants connected to the same grid. Other examples of additionality include paying farmers to capture and burn the methane from their livestock, or to pay for clean up of industrial chemical process that release greenhouse gas.

The pertinent question is whether someone can reduce their greenhouse gas footprint by purchasing RECs. This question could be answered soon enough by regulations in the US that require “renewable portfolio standards.” But consumer choice will ultimately prevail in the voluntary market. Perhaps that is why many voluntary RECs have fallen in value as compared to true carbon offsets.

When designing climate change strategies for our clients, Standard Carbon recommends purchasing RECs or green tags only for the purpose of supporting clean energy, not offsetting emission. If a clean energy project can pass a UNFCCC test for additionality, then that is a real offset.

On Tuesday, May 15, Standard Carbon Sponsored the Cascade Land Conservancy Annual Breakfast Awards with a donation of 100 tonnes of Co2 offsets generated by the Baldwin Dairy in Baldwin, Wisconsin. These offset credits were generated and verified according to standards accepted by the UN Clean Development Mechanism.

For each table at the Banquet, 1160 lbs of greenhouse gas offsets have been donated. This is the same as approximately 1/6 acre of Douglas Fir growing in Washington or:

• 1000 Miles driven in a Chevy Suburban
• A roundtrip flight from Seattle to Chicago
• 6 months electricity and cooling for an average computer server
• One dairy cow for one month
• Burning 500 lbs of coal

Standard Carbon Is working with the Cascade Land Conservancy to make Carbon Sequestration a new tool for land preservation in the Northwest. Although the value of carbon offsets alone is not enough to purchase and plant forests, it can help. Aggregating forest land that has been permanently protected from development and conversion will help keep Washington the “evergreen” State for the next generation.

When you purchase a verified emissions offset, like the ones that Standard Carbon sells, you are purchasing a credit that represents a real reduction in green house gas emissions by a private, entrepreneurial project.  By purchasing that reduction credit, you support the project that produces the reduction and retire the credit from the marketplace.  This is different than purchasing an “allowance.”

Within the UN’s Kyoto cap and trade marketplace, an allowance is a “right to pollute,” meaning that the owner is allowed to emit as much green house gas as the allowance allows.  In some cap and trade marketplaces, such as the US market for acid rain causing SO2, it is possible to purchase and retire allowance credits and reduce the quantity of pollution.  This is not presently the case with the green house gas market.

An offset credit is similar to an allowance, except that it represents an additional project that is reducing green house gasses rather than a “right to pollute” issued by a government.  Any pollution beyond what is alloted for in the allowance must be offset by an offset credit.  A corporation that must comply with an emissions cap can purchase offset credits and then surrender them to the agency that issued their allowances if it exceeds the allowance.

When you purchase a Standard Carbon emissions offset and retire it voluntarily, you are purchasing the rights to a verified emissions reduction from the same projects that multinationals must purchase from in order to comply with Kyoto and CCX standards.