Carbon Offsets or Renewable Energy Credits - Part 2

When you support projects at BuyforEarth.com you can choose the type of project you are supporting. Projects or products are of either the Carbon Offset variety or the Renewable Energy Credit variety. In an earlier article, we provide some insight into Carbon Offsets. In this article we will discuss Renewable Energy Credits.


Renewable Energy Credits
Renewable Energy Credits or Certificates or Green Tags or Tradable Renewable Certificates or...(let's just call them RECs) are proof that a renewable energy source has been used to generate 1 Megawatt-hour (1,000 Kilowatt-hours). To put that in perspective the average Utility Customer in the U.S. uses about 800 KWh of electricity in a month. You can check your utility bill to see where your average use falls.

As with Carbon Offsets, RECs are issued to the company that produces the electricity and makes it available for consumption to a utilities customers. Once the REC is issued it can be sold to offset the higher cost of producing renewable energy.

How Does Renewable Energy Credits Reduce Carbon Emissions?
In about half the states, utilities are required to provide a certain percentage of the power they provide to their customers in the form of Renewable Energy. Because of this, they must have sufficient RECs to represent the amount of green energy that they must provide. If they do not produce enough with renewable source they own, they must purchase RECs to make up the difference.

As RECs are purchased by non-utility parties, they are no longer available to 'offset' the required generation of the regulated utilities. The utilities must either produce more green energy or offer more money for the RECs, creating more incentives for independent producers to produce more renewable energy and sell the credits to the utilities.

The more renewable energy that is available to us, the less fossil fuel generation will be required to meet our electricity needs. The less fossil fuel burned, the lower the Greenhouse Gas Emissions.

The REC market should, in the long run, even the economic playing field and allow Renewable Energy Sources to be cost-competitive with fossil generation.

How many Pounds GHG emissions are Reduced when an REC is Purchased?
Tough question. The GHG emissions represented by generating 1,000 KWh of electricity is the easy answer. To determine the actual reductions we have to make some assumptions about what kind of fossil fuel is being replaced by the renewable energy generation. Typically, this would be coal or natural gas. However, these are only replaced in the long run and a diversity of renewable sources are needed to replace the reliability of fossil generation. On average the GHG output to produce 1 MWh (1,000 KWh) of electricity for generation in 2004 was:

• For Coal -- 2,189 pounds.
• For Natural Gas -- 1,140 pounds.
• All Fossil Fuels -- 1,922 pounds
  

Based on this information, the assumption of a similar mix of fossil generation being displaced by the REC would mean that GHG emissions slightly less than a ton are being reduced. Depending on where you live this number is going to be higher or lower. A good carbon footprint calculator will provide an accurate estimate of the emissions that 1,000 KWh of renewable electricity would offset. (Simply see what the carbon footprint is for you when you enter 1,000 KWh for your energy use at home.)

Which is better -- Carbon Offsets or RECs?
Carbon offsets represent a reduction in Greenhouse Gas emissions. RECs represent energy produced, that theoretically replace generation that produces GHGs. So they both have similar goals. It is all going to depend on your personal preferences. If you are also concerned with energy dependency on foreign oil, you may prefer to support Renewable energy projects offering RECs. If you want to support all reductions, Carbon Offsets may be the best choice since they include Renewable Energy and other types of Carbon Reductions. If you are price shopping you will want to compare apples to apples and convert RECs to equivalent emissions to see which is the lowest cost option for you.

Regardless of whether you choose Carbon Offsets or RECs to reduce your Carbon Footprint, remember that BuyforEarth.com will let you use your online shopping to support your favorite projects.

That's a Good Idea

Your Feedback Is Important

We have received several comments and feedback on the BuyforEarth.com concept, from many of our prospective members and friends. Like we said our mission is to provide a way for people to join together and make a difference. Getting the concept out has helped us learn what we can do better.

We have spent the last few days, re-inventing certain aspects of our site and approach to answer to many of the suggestions we received. Here is what we have done.

We Simplified the Membership Process.
Joining BuyforEarth.com is as simple as we could make it. Membership is free, easy and we will track all of your activity and provide you with quarterly reports of your contribution to the environment.

You Choose Where Your Support Goes.
We have added the capability for Projects and Offset providers to be listed on BuyforEarth.com. In order to make it work we have implemented a system that will reward your shopping with points that you will use to 'buy' Carbon Offsets or Renewable Energy Credits from listed sources. You will use your Points to support the project of your choice. We have implemented standard products that you can choose from, but more choices will become available soon.

We Reward You for Referrals
When you refer your family and friends to BuyforEarth.com and they become members and make a purchase we will reward you with more points to use when you buy Offsets or RECs offered on the BuyforEarth.com website. The referral link is available in the BuyforEarth.com Mall.

You Can Suggest Projects
We need to build our Project list to include the kinds of projects you want to see. You can send us an email with a link to the project website and let us know of any projects or products that you would like to see listed on BuyforEarth.com. We will invite them to join.

Coming Soon -- A Green Mall
We are in the process of creating a mall that will include Merchants that offer 'Green' products exclusively to our members. Be looking for the opening soon.

We are still discussing some other suggestions that we have received. Thanks for the comments, they make us better at meeting your needs and accomplishing our goals. Keep 'em coming!

Carbon Offset or Renewable Energy Credits

When you join BuyforEarth.com you choose if you want to direct your offset earnings to Carbon Offsets or Renewable Energy Certificates.

We struggled with giving you the choice, seeing that the end result really ends up being the same -- Less Greenhouse Gas Emissions. However, we believe that the choice is necessary, because of the differences in how the reductions are achieved. We should be able to choose, so we gave you the choice.

In part 1, we will take a look at how Carbon Credits are Created on the Chicago Climate Exchange. (Say that three times fast and you get a one-ton carbon credit free.)

The following came from the Chicago Climate Exchange (CCX) Website:

CCX issues tradable Carbon Financial Instrument® (CFI®) contracts to owners or aggregators of eligible projects on the basis of sequestration, destruction or reduction of GHG emissions.

Is that helpful? Methinks we need to look a bit closer:

1. GHG Emissions -- Greenhouse Gases consist of a great number of gases that exist in our atmosphere. Even though we have come to think of the term as somewhat negative, not all GHGs are "bad". In fact we need GHGs. Without GHGs in the atmosphere, heat would escape and the Earth would be really chilly. However, too many GHGs, and more heat would be retained, causing the temperature to rise. The claim is that we now have too many and the Earth's temperature is rising.
   
2. Carbon Financial Instrument -- In order to reduce the total amount of GHGs emitted, the
   Chicago Climate Exchange was formed to provide a financial aspect to the equation. Industry is invited to voluntarily join and commit to the reduction of GHGs. Companies can either reduce their emissions directly or purchase Carbon Offsets to make up for emissions that exceed their commitments. A CFI is the instrument that provides for the Offsets. CFI's are traded on the CCX to provide a market value to the offsets. Companies that reduce more or implement projects are awarded CFIs and can sell them on the CCX. These funds are used to offset the expense of the projects themselves.
   
3. Eligible Projects -- There are many different types of projects eligible to receive offset credits. You can review project types at Carbon Neutral Digest and on the CCX website. Projects are proposed to the Exchange by the owners of the projects. The project must then obtain independent verification by a CCX approved verifier to assess the projects actual GHG emission Sequestration, Destruction or Reduction. Only then, are the offsets issued to the project owner. CFI contracts in a quantity equal to the project’s GHG emissions mitigation for the year that the reductions take place.

As a side note, these projects can include projects that would otherwise be eligible for renewable energy credits. We will discuss these in the next segment of this article.

Now the important part...

When a company gets these credits they can sell them. In some cases, these credits are sold to others that need to mitigate GHG emissions through offsets to meet their quota. In other cases, BuyforEarth.com's case, the CFI contracts are purchased and then retired. This means that the offset is not available to allow the emissions to occur. So our role is this, buy them, retire them and reduce the emissions.

Welcome to the BuyforEarth.com Website Blog

First post. We have published the site. Still have a few pages to finish up, but all in all, things are looking pretty good.

Our research thus far tells us that the concept, if we approach it right, is valid. The audience is HUGE, the service is Broad and the purpose is significant. Now, the real test is to see if we can get our name out there and create a base of users that will make a difference.

We want (and need) to hear from you all. What is right? What is wrong? How Can we make it better for you, while maintaining a strong focus on our goals.

We still have to complete the Sponsors Page, Reports and need to add more links.

Some of the things that we have already begun to discuss:

• A Member Recognition Page (e.g. the 100-ton Club, 1,000-ton Club)
• A Green Product Mall.
• More choices (currently we allow the choice of CCX based Carbon Offsets and RECs)
• Promotion: 100-ton offset to the Member with the most Referrals
• Promotion: Cash Prize to the Member with the most Offsets

Anyway, take a look at the site, and let us know what you think.