Monday, January 28, 2008

Manipulating the system

The Federal Trade Commission should be aggressive in making sure consumers understand carbon offsets and take a harder look at renewable energy certificates, or RECS, according to a letter signed by nine state attorneys general.

The AGs cite the potential "to manipulate the system" and make the usual plea that feds make sure offsets aren't being double sold - in other words, make sure that if a project cuts emissions by 1 million tonnes, the offsets sold from that project don't total more than 1 million tonnes. Critics cite double selling as a major drawback of retail offsets programs.

They also want clarity on RECs:

The states also demanded that the Federal Trade Commission consider whether renewable energy certificates-proof that energy was generated by a renewable source-should count as a valid offset. The certificates may not qualify as offsets because renewable energy does not always displace traditional energy sources.

The United States requires power companies increase the portion of their output from renewable energy. Many would argue this is a legal mandate, therefore it doesn't meet the standard for 'additionality' and wouldn't qualify as an offset. The FTC could put an end to RECs as an offset, but this won't dent the booming renewable energy business -- although it might cut into offset brokers bottom line. Which isn't necessarily a bad thing.

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