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Renewable Energy Certificates Reduce Green House Gas Emissions
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Chien Si Harriman, LEED® AP, San Francisco Senior Design Engineer
Climate change experts such as Jim Hansen, the director of NASA™s premier climate research center, believe that the earth™s atmosphere is at a tipping point. The major culprit: greenhouse gases. He gave testimony in 1988 to a Senate committee, and later stated to reporters, "It™s time to stop waffling so much and say the greenhouse effect is here and is affecting our climate now." For conscientious consumers of energy, this message is really a siren for change“to reduce consumption and find alternatives to the greenhouse gas emitting fossil fuels that we consume each day. Glumac is finding new ways to reduce global greenhouse gases every day, and have recently found we can do more.
For most of us, reducing greenhouse gas emissions is simple enough“recycle, purchase organic and locally-grown food, bike to work, decrease energy use through retrofitting our houses or keeping the heater off by turning the thermostat down, or maybe taking shorter showers. On the other hand, there are corporations, like Sony, which participate in global initiatives to offset thousands of tons of carbon dioxide from the atmosphere each year. They might do this by looking at their own internal practices, boosting their own efficiency. The difference between Sony and many corporations: Sony is a Japanese corporation. Japan is one of the countries that have signed the Kyoto Protocol, America and its corporations have not.
A Bit on the Kyoto Protocol
For those who are not aware, the Kyoto Protocol sets mandatory reductions in greenhouse gas emissions for all signing countries. It was first submitted for resolution and signing back in 1997. The goals are simple enough: promote policies and measures that foster energy efficiency, sustainable forms of agriculture, reforestation, and research in new and renewable forms of energy, carbon sequestration, and environmentally sound technologies. Because the entire atmosphere is linked, and links other countries beyond traditional borders, all countries that signed the treaty could participate in the aims of the Protocol simultaneously. A global cap and trade system has been set up“a commodities market like gold or wheat or silver, where efficiency and greenhouse gas emissions could be traded on an exchange for a fair market price. Big-time polluters like old power plants, that could not meet the mandatory reductions in emissions, could purchase credits on the global exchange from companies who were reducing their greenhouse gas emissions below standard practice.
The beauty of the new cap and trade system, in the eyes of its creators, was the formation of a multi-billion dollar fund by the World Bank and subsidiaries to help these developing countries create new carbon offsets and sustainable development. This system has become known as the Clean Development Mechanism (CDM). This fund helped developing countries to adopt sustainable practices and investments“such as the installation of wind power or solar power for electricity, sustainable farming practices that eliminated the use of artificial fertilizer (usually made from natural gas), biodiesel plants that produced fuel more efficiently, to name a few. More importantly, these developing nations could then sell their carbon reductions on the global carbon exchange and be paid by polluters at the market rate for a ton of greenhouse gas“so long as it was proven that these new installations were improvements over "business as usual practice" in the second and third world. So, for example, if a plantation in Brazil was using pesticides and industrial fertilizer to maintain a bumper crop, a switch to sustainable practices would actually increase revenue to the farmers there, via carbon credits they acquired and traded through the CDM. For example, a large plantation would receive over $1,000,000 annually for ten years at the current price of a carbon credit on the exchange, if it could prove that its sustainable practices resulted in the reduction of 200,000 metric tons of carbon released into the atmosphere.
America vs. Kyoto = Private vs. Public
The Kyoto Protocol sets up a global market, much like the New York Stock Exchange, or the Chicago Mercantile Exchange, where global companies go to achieve success on a global scale. America™s system is more like a private holding company, which makes partnerships with only the willing members of a smaller coalition, is not subject to the demands of its "stockholders", and is not hindered by the monitoring of the regulators and overseers of the exchange.
This privatized view of greenhouse gas management has meant that American corporations only must volunteer to meet their own internal guidelines for greenhouse gas emissions, beyond that required by the United States Environmental Protection Agency. Smaller companies are of course exempt altogether, since most only consume electricity and produce no direct emission. The privatized view also means that Americans, as non-signatories of the Kyoto Protocol cannot take part in the global greenhouse gas exchange, and cannot participate in programs aimed to improve sustainable development in second and third world countries through the Clean Development Mechanism. So, as in the sense of a small private company, the United States is protected from regulation but also legally denied participation in a growing and multi-billion dollar sustainable development movement going on throughout the world. (There are loopholes to this legal withholding, but they are slowly closing).
Americans, therefore have had to create other means to provide polluters with a way to voluntarily reduce greenhouse gas emissions. One of the primary means, Renewable Energy Certificates (RECs), are produced by companies that assist in the creation of renewable energy markets. RECs are popular in locations like Northern California, where electricity consumers wish to voluntarily do something positive for the environment, and are willing to pay a premium of a cent or two per kilowatt-hour. This money, like the money in the Kyoto Protocols global exchange, creates a fund that promotes renewable technologies, greenhouse gas reduction, and promotion of renewable energy. Renewable Energy Certificate providers then use this money to provide a monitoring, accounting, and marketing opportunity for wind farms and solar photovoltaic farm owners and developers. We highlighted RECs in our last Glumac newsletter.
Glumac is currently investigating what it would take to offset 100% of its business-related greenhouse gas emissions annually through the purchase of RECs. We™ve been investigating our annual greenhouse gas production through the use of studies and surveys, and have set our first realistic target of annual greenhouse gas production for each of our six offices-nearly 2,000 pounds of carbon annually to be removed from the atmosphere. In the future, we believe that conscientious consumers and clients will desire to pay a 10% carbon offset fee for our services, that will help to cover the cost of our voluntary carbon offset. As part of our commitment to act as efficiency experts and as environmental advocates, we at Glumac believe this action promotes a healthy environment and provides a private way for companies to improve the environment, while living in a world without the Kyoto Protocol. Now, through Glumac, it is possible to promote energy efficiency and renewable energy-two of the primary mandates of the Kyoto Protocol. It is a way that Glumac is doing its part to promote sustainability despite the lack of other alternatives for greenhouse gas reductions.
We believe that our services offer some of our clients the chance to do business with another advocate of sustainability, who is passionate about their role in it. For others, it offers a small but simple way to promote green businesses without having to make a huge purchase themselves.
So long as the system remains voluntary, it will continue to be private business models that drive greenhouse gas emission reductions in the United States. When compared to the Kyoto Protocol, we wonder whether this system will ultimately work. However, for both the American system and the internationally-approved Kyoto treaty, a change to reduce greenhouse gas emissions means new business opportunities for individuals who can prove they reduce greenhouse gas emissions when compared to "business as usual". Companies spring up each day to tackle the growing greenhouse gas emissions. Unfortunately, there continues to be a global marketplace that we cannot tap as Americans. Until then, we will do our part.
