09.06.2011 0

Renewable Energy Credits Called Out as “The Ultimate Greenwash”

By Kevin Mooney — The Corporate Renewable Energy Index (CREX), a product of Bloomberg New Energy Finance and Vestas Wind Systems, provides some insight. For the moment, News Corp. appears to be outpacing Starbucks in its commitment to renewables, according to the index.  News Corp. purchases 67 percent of its electricity from renewable in comparison to 58 percent by Starbucks. Researchers with the Cascade Policy Institute, based in Oregon, surmise that public relations schemes are at work. News Corp. is not exactly a media darling, while Starbucks has been winning points in recent years for its environmental posturing. In any event, neither company sits at top of the index. Whole Foods, Intel Corp. and Kohl’s are the leading purchasers, the latest survey shows.

But a significant percentage of the companies listed on CREX did not actually make purchases of renewable energy, the Cascade Policy Institute has revealed.  In reality, they are purchasing renewable energy credits (RECs), which Cascade describes as a “fabricated commodity.”

“A REC represents the alleged ‘environmental amenities’ associated with certain forms of electrical power production such as wind or solar,” Cascade reports. “For those in the trade, one REC is created every time one megawatt-hour (MWh) or renewable energy is generated.  Two distinct commodities are associated with renewable energy, Cascade explains. First, there is the actual electric output, and second, there is the illusive environmental benefit.

In the aftermath of the climategate scandal involving “scientists” at University of East Anglia’s Climate Research Unit (CRU) in Great Britain, there is ample room to raise serious questions about the premise of man-made global warming theories that the United Nations continues to peddle. But even if companies do accept this premise they should know that purchasing RECs do little if anything to reduce total carbon dioxide emissions.

A company that buys green power can make the claim that it is alleviating its carbon footprint, but it cannot argue that it is curtailing its total emissions, according to the Environmental Protection Agency (EPA).

Even so, Bloomberg touts the index as a meaningful environmental exercise.

For years, we at Bloomberg New Energy Finance have focused so much of our attention on the generators of clean energy”, said Michael Liebreich, CEO of Bloomberg New Energy Finance. “For this report, we shift the lens just a bit to look at who is buying this electricity.  The CREX brings transparency to the renewable energy use of major global corporations, and will be a useful tool for energy investors.”

But where Bloomberg sees transparency, Cascade sees duplicity.

For starters, the price for RECs is too low to spur any meaningful investment into clean energy, the institute points out. The average price is less than $1 per REC. Furthermore, it is very clear that corporate America is using REC as a “marketing gimmick” to bolster its environmental credentials.

“RECs are little more than a waste of other people’s money,” Cascade argues. “As a fabricated commodity, RECs are little more than the ultimate greenwash.”

Kevin Mooney is a contributing editor to Americans for Limited Government. You can follow Kevin on Twitter at @KevinMooneyDC.

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