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Renewable energy credits gain ground

When Green Living & Energy Education flew three speakers to its Expo in March 2007, they turned to Terrapass (www.terrapass.com) to determine how much carbon these flights would be putting into the atmosphere. In order to make up for the impact that this would have on the environment, in a sense becoming “carbon neutral,” they purchased what are known as carbon offsets. These offsets generally involve support for renewable energy, industrial energy efficiency and reforestation projects.

“Being carbon neutral was a natural extension of what we were doing,” said Diane Marshall, founder of the nonprofit GLEE. “The Expo is all about conservation, sustainability, and alternative resources. Buying the TerraPass was an easy way to get them here while reducing our impact. Our TerraPass purchase offset 7,500 pounds of carbon dioxide.”

With all of the recent focus on ways to reduce your carbon footprint on the earth, essentially how much carbon you produce in your daily life, many people are no longer content with just reduction. Instead, they want to eliminate it entirely, and over 30 new organizations like TerraPass have sprouted up promising to help people become carbon neutral.

Eric Carlson, executive director of the Carbon Fund (www.carbonfund.org), a Washington based nonprofit that sells carbon offsets, said that since the Carbon Fund was established in 2003, it has seen a groundswell of interest in climate change and carbon reductions. “Especially in the past 18 months, we’ve seen people become more concerned with wanting to know what they can personally do to reduce their impact on climate change.”

He noted that participation with his organization grew twenty-fold last year, and more than 40,000 people join together to offset over 350,000 tons of carbon dioxide. In the beginning, they were a completely volunteer effort, and now they have grown to a staff of seven full-time employees.

Online calculators

Organizations such as TerraPass, Carbon Fund and the Bonneville Environment Foundation (www.b-e-f.org) offer online calculators to help determine how much carbon you are producing in your daily life. These calculators take into consideration things such as the amount of electricity, natural gas and heating oil that are used, the types of cars that are driven and any type of road or air travel based on destination. They then put a price on each ton of carbon, and you donate that amount of money, which is invested in various projects.

One way of offsetting is through the support of renewable energy by purchasing what are called renewable energy credits (RECs) or green tags. These are units that represent the amount of CO2 that would have been generated from the burning of oil or coal but instead was reduced because of renewable energy. For example, TerraPass purchases RECs from the Garwin McNeilus Wind Farm in Dodge Center, Minn., which feeds its energy into the grid providing electricity to local states. Not only can individuals purchase these credits, but companies can purchase them so that they can declare themselves environmentally friendly.

“This helps the environment by creating additional capital for renewable energy projects,” said Mark van Soestbergen, CEO of Climate Safe, a federally recognized certification company for green house gas neutral products and services. “A donation is a one-way relationship where you are just giving money, but here there is an exchange. You are giving money, and you’re getting back something in return. It’s on paper, but it represents a specific unit of zero emissions generation. It incentivizes these actions.”

Climate Exchange

Another tool that organizations use to offset carbon is the Chicago Climate Exchange (CCX), which is North America’s largest carbon trading market. More than 200 companies, cities, states and universities have voluntarily joined this “cap and trade” program and have committed to reducing their carbon emissions. This is similar to the federally regulated market program for sulfur emissions, started in the mid-1990s, which successfully cut sulfur emissions and reduced acid rain.

Once participants join the exchange, they make a legally binding commitment to meet annual greenhouse gas emission reduction targets. Those who reduce below the targets have surplus allowances to sell to other companies that do not meet their target goals.

For example: Company A was supposed to reduce its carbon emissions by 10 tons, but instead reduced them by 15 tons. Company B was supposed to do the same, but instead only reduced them by 5 tons. Company B could buy the extra 5 tons from Company A to come out even and avoid being penalized.

Offset organizations go into the CCX and purchase those extra tons, so that they can’t be handed over to another company, in effect “retiring” the carbon emission credits. “If one company buys another’s credits, you haven’t reduced anything,” Carlson said. “You’ve just transferred it. If we go in and buy 100 units of carbon, and we don’t have any obligation to reduce, you have the entire market level minus 100. Companies are then forced to reduce their emissions.”

Reforestation is another popular program used to offset carbon emissions. It is a form of carbon sequestration, which is the removal of carbon dioxide from the atmosphere. While forests are growing, they capture CO2 and store it in the tree’s mass and in the soil. For example, Carbon Fund is working with several planting projects globally including the Sequoia National Forest in California, Mangrove Restoration in India and Community Agroforestry in Nepal.

Buyer beware

Carlson warned that since the carbon market is a non-regulated entity, consumers should take care when choosing an organization work with. “The key is the certification,” he said. “Do they buy Green-e certified RECs? Are they buying Chicago Climate Exchange certified carbon credits? Is an independent third party looking at their portfolio, and is that transparent on their Web site? Many organizations can’t say that.”

Also, he noted that people should keep in mind that buying offsets to become carbon neutral does not take the place of reducing your carbon output through your daily activities. It is not meant as a tool to buy your way out of environmentally damaging practices. However, used correctly, these organizations provide a new and innovative way to raise awareness about carbon emissions and offer solutions that individuals can afford.

“I think these are very pioneering organizations, because if the Federal government is not reducing greenhouse emissions, who else is going to do it,” van Soestbergen said. “It’s the American way, if you will. Eventually, the people start taking action on their own. That’s what makes this such an interesting country.”

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