Archive for the ‘carbon credits’ Category


photo: Todd Woody

With the U.S. House of Representatives set to vote on the Waxman-Markey climate change bill this week, a report issued Thursday predicts the American Clean Energy and Security Act will create a huge market in carbon offset projects like reforestation.

In its current form, the legislation allows companies to comply with a cap on greenhouse gas emissions in part by purchasing carbon offset credits generated by domestic and international projects that reduce CO2 — such as capturing methane gas leaking from landfills. According to an analysis by research firm New Energy Finance, demand — for up to 5.7 billion tons of offsets — will far outstrip supply, with domestic projects contributing fewer than 30% of the offsets.

“Waxman-Markey will induce cumulative production…of offsets until 2020 to satisfy demand for reductions,” wrote the report’s authors. “We estimate that Waxman-Markey’s targets and lenient offset limits will create high levels of offset project development – both domestic and international.”

In other words, U.S. climate change legislation could goose a global market for offsets. In the U.S. alone, New Energy Finance estimates that the offset market will grow 27-fold by 2015, becoming a $46.7 billion business by 2020.

Some environmentalists have slammed Waxman-Markey for its generous use of offsets, arguing that U.S. companies could actually increase their carbon pollution while meeting the cap by buying other people’s emissions reductions. Relying on overseas projects to supply the majority of offsets also raises questions about how those efforts will be verified and overseen, especially if a carbon boom develops.

On the plus side, New Energy Finance expects tree projects to “play a pivotal role” in the offset market, which could slow the rapid rate of deforestation afflicting the planet.

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Green Wombat often highlights high tech when it comes to tackling global warming and energy independence. But a new study from the University of California’s Lawrence Berkeley National Laboratory shows that simply installing white roofs on homes and commercial buildings – to reflect the sun’s rays rather than absorb them – can reduce air-conditioning costs by 20% and could save $1 billion a year in energy outlays in the United States.

Switch to cool sidewalks and roads and the savings rise to $2 billion annually, according to the study by scientists Hashem Akbari and Surabi Menon and California Energy Commissioner Art Rosenfeld to be published in the journal Climate Change.

The scientists calculated that a global white roofs and roads effort would offset 44 billion metric tons of greenhouse gas emissions, or more than a year’s worth of carbon, and help stablize future C02 emission increases.

“The 44 Gt CO2-equivalent offset potential for cool roofs and cool pavements would counteract
the effect of the growth in CO2-equivalent emission rates for 11 years,” according to the authors.

Such emission reductions, of course, can be securitized into tradable carbon credits, which the study estimates would be worth $1.1 trillion. Regulated carbon market exist in places like Europe but securities based on cool roofs have not yet been created.

A global cool roofs agreement could avoid the pitfalls of Kyoto-style accords, the scientists note.  “Installing cool roofs and cool pavements in cities worldwide does not need delicate negotiations between nations in terms of curbing each country’s CO2 emission rates.”

It’s one of those low-tech, commonsense solutions to both energy use and global warming – one used for thousands of years in the regions like the Mediterranean; those picturesque villages overlooking the sea are white-washed for a reason.

In California, commercial buildings with flat roofs have been required to cool it since 2005. But one of the biggest hurdles in the U.S. to doing the white thing may be homeowner associations that dictate everything from the color of your mailbox to where you place your rubbish bin. The vast majority of homes in California either have standard black shingle roofs or Spanish-style red tiles. A proposal to paint those roofs white will likely incite architectural outrage.

But there’s another, albeit much more expensive solution, to hot roofs: Cover them with solar panels.

photo: California Energy Commission

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virgin-galactic-spaceshiptwo-feather-1.jpgIt is an article of faith these days that any company worth its public relations budget must proclaim loudly and frequently its good green intentions. So it was rather refreshing to hear one of Richard Branson’s top lieutenants – Will Whitehorn, chief of Virgin Galactic – cast his company’s enviro-friendly initiatives as strictly business.

“We’re not doing this to be environmentally kosher,” declares Whitehorn, referring to Virgin’s efforts to develop greenhouse-gas free biofuels for its jets and forthcoming spaceship, “we’re doing this to ensure our company’s survival.”

The occasion for Whitehorn’s remarks was one of those “green salons” that have become popular in San Francisco of late. You know, gather a group of so-called thought-leaders – executives, environmentalists, venture capitalists, journalists – in a chi-chi restaurant and let the ideas and sauvignon blanc flow. Easy enough to skewer, particularly when the well-compensated are dining on ahi tuna skewers, but you never know where the conversation will go, and in this case it strayed interestingly off-topic. The subject du jour was a white paper on corporate greenwashing from Bite Communications, the public relations firm that organized the recent lunch. Among those on hand were Whitehorn and execs from Chinese solar panel maker Suntech (STP), fuel-cell maker Bloom Energy, utility PG&E (PCG), and VantagePoint Venture Partners, investor in electric car startup Tesla Motors and solar power plant builder BrightSource Energy.

Whitehorn held center court, tracing Virgin’s trip down the green path a decade ago when the company forecast a dramatic rise in oil prices and tried to gauge the impact on its airline and new railway business. As a result, he says, Virgin spent big bucks on energy-efficient locomotives to hedge against future fuel cost spikes.

“This is not really a question of being green,” says Whitehorn, who expresses annoyance that Branson’s pledge last year to invest $3 billion in biofuels research and development was portrayed in the media as a charitable deed. “We’re doing this to make money and we’re creating a more sustainable economy in the process.”

“We’ve got to get away from this idea of doing these things as good works,” he adds. “We’re doing what we’re doing to create a profitable business for the future.”

It’s a meme increasingly being advanced by some environmentalists, most notably by the black sheep of the movement, Ted Nordhaus and Michael Shellenberger, whose 2004 essay, “The Death of Environmentalism” riled the green elite. The Berkeley duo’s new book, Break Through: From the Death of Environmentalism to the Politics of Possibility, calls for reframing global warming from a doom-and-gloom scenario to an opportunity for unbridled economic prosperity by investing in green technologies. Their central argument: only when people and societies achieve a certain level of material wellbeing do they have the luxury of supporting environmental preservation. In other words, greed is green.

Whitehorn also took aim at companies that proclaim themselves carbon neutral, scorning the notion that corporate greenhouse gas emissions can be offset by merely buying carbon credits. “We’re not going to be carbon neutral – it’s impossible,” he says of Virgin. “You need to get out and do something other than buy someone else’s carbon problem.”

Still, Kristina Skierka, director of Bite’s clean-tech practice, wanted to know just how green Virgin Galactic can be, given its business model of ferrying the rich into outer space for a couple of hundred grand a pop. “If we use biofuels we will get the emissions down to near zero,” Whitehorn claims. “This is about a new type of launch system; the carbon impacts will be negligible.

He says space tourism is just the launching pad, as it were, for a host of space-based ventures. “If you look at space as an industrial place to conduct human activities, it has huge advantages.”

Virgin’s next frontier is the deep blue sea. According to Whitehorn, the company recently created a skunk works to develop a “radical” new submarine technology for a startup to be called, what else, Virgin Oceanic.

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Giant utility American Electric Power said today it will buy 4.6 million carbon credits to capture methane produced by some 400,000 cows between 2010 and 2017. The Ohio-based utility – one of the U.S.’s largest producers of coal-fired electricity – did not disclose the price of the credits. Farmers in the 11 states where AEP operates will receive payments for participating in the program. AEP’s (AEP) deal with the the Environmental Credit Corp. calls for the methane, a potent greenhouse gas, to be captured in covered lagoons and burned off. That still produces carbon dioxide, of course.  But if AEP really wants to neutralize the greenhouse gas emissions – and tap some naturally clean power – it could emulate California utility PG&E (PCG) by supporting the conversion of methane into biogas to generate electricity on farms or at natural gas plants.

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Native_energy_windfarmjpg Wind farm project in the Native American village of Kasigluk, Alaska

How much does it cost to make your company carbon neutral? In the case of Salesforce.com (CRM), the bill for offsetting the greenhouse gases produced by its corporate operations in 2006 comes to $126,000, or about $6.40 per ton of carbon emitted. The Web-based software company today announced Earthforce, an initiative to neutralize its contribution to global warming by funding alternative energy and forest conservation projects. Salesforce.com worked with the non-profit Cool Air Cool Planet and Native Energy, a  Native American owned renewable energy company, to calculate that the San Francisco tech company’s data centers, offices and corporate travel produced about 19,700 tons of carbon last year. To compensate, the company’s Salesforce.com Foundation will help finance Native Energy wind farm projects in Alaska and South Dakota, a family farm wind farm, and a methane digester to produce electricity from cow manure – cower power – at a family-owned dairy farm. Salesforce.com will also work with Makiraforest_5fwcs_5fdmeyers
Conservation International to preserve the threatened but ecologically rich Makira rain forest in Madagascar. The idea: the amount of renewable energy produced by the wind farms and methane digester and the carbon absorbed by the rain forest will zero-out the carbon produced by Salesforce.com’s operations. According to Native Energy, an independent audit is conducted to ensure the offsets purchased result in actual emission reductions. "We feel it’s an important first step for us to take," Bruce Francis, Salesforce.com’s VP for corporate strategy, told Green Wombat. "We wanted to be able to tell our customers that when you partner with Salesforce youre not contributing to global warming." He acknowledged that such programs are no longer just about green marketing. "Increasingly, smart customers are going to ask the question" about greenhouse gas emissions "and we want to have the answers for them," says Francis. Carbon offset programs are "quickly moving from a nice-to-have to a must-have." But with even old-line tech giants such as Dell (DELL) promoting programs like "Plant a Tree for Me,"  carbon-savvy customers are next going to be asking companies what they’re doing to directly reduce greenhouse gas emissions – such as using energy-efficient servers and solar power and trading in gas hogs in their vehicle fleets for hybrids.

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Before you give your sweetie a holiday gift of carbon credits to make up for that global-warming flight to Fiji and all those unncessary greenhouse gas-emitting trips to Starbucks in the Subaru, it would be best to read a new report on the burgeoning carbon offset market to make sure your money is not going up in smoke. Responding to people’s desire to do something on a personal level about climate change, nearly three dozen companies and non-profits now offer services to neutralize your contributions to global warming. That’s done by selling an array of "carbon offsets" that are supposed to result in a corresponding reduction in greenhouse gas emissions. But the report commissioned by the Portsmouth, New Hampshire-based non-profit Clean Air Cool Planet found that there’s no guarantee that buying offsets will do anything more than assuage your green guilt. "Achievement of personal carbon neutrality is certainly laudable. But pursuing carbon neutrality at the individual level will not solve global warming, or even mitigate it to any significant extent," the report’s authors wrote. "Indeed, the potential for the retail offset market to inform and influence the public regarding global warming is almost certainly as important, if not more important, than its role in reducing actual (greenhouse gas) emissions."

Their conclusion after surveying 30 carbon offset services: "While we can identify top-tier providers based on currently available information, we cannot categorically state that purchasing offsets from them will render you carbon neutral." The reason for that is that offsetting greenhouse gases with personal carbon credits is an incredibly complicated endeavor. To be effective, the offsets purchased must result in additional greenhouse gas reductions that would not have otherwise occurred because of planned projects, government mandates or voluntary programs. For instance, buying credits attributed to Company X’s previous commitment to cut greenhouse gas emissions by a certain amount would not make the world cooler. On the other hand, the report says that buying credits purchased on the European carbon trading market – a service Green Wombat wrote about last week – would have an impact on global warming. That’s because the EU Emissions Trading Scheme limits total emissions among participating countries and by purchasing carbon credits you’re taking off the market someone else’s right to emit a certain amount of carbon dioxide, forcing actual reductions.


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Naughty little boys and girls get a lump of coal in their Christmas stockings; green little boys and girls get…carbon credits to take coal gases out of the atmosphere and fight global warming. The Science Museum of London and UK specialty gift retailer MoonEstates.com are selling the Climate Relief Gift Pack, which includes 100 kilograms (about 220 pounds) worth of carbon credits bought on the European carbon trading market, known as the EU Emissions Trading Scheme. The market helps European countries meet their obligations under the Kyoto Accord by setting greenhouse gas emission limits and then requiring corporations that exceed that cap to purchase credits from those companies that have lowered their emissions. In other words, by purchasing the Climate Relief Gift Pack – retailing for 20 or about $40 – you take the right to emit 100 kilograms of carbon dioxide and other greenhouse gases off the market, offsetting your personal "carbon footprint" from driving, flying – and buying all those PlayStation 3s, iPods and other carbon-producing holiday presents.

Therein lies a business opportunity: personal carbon trading products have been proliferating like coal-fired power plants in China, often confusing enviro-minded citizens about which are legitimate carbon offset services and which are just green-fleecing schemes. What’s needed is someone to create a certification program to give a green seal of approval to legitimate personal carbon trading services and to roll up these various programs.


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