Taking credit for carbon offsets

Pam Hall, president of Normandeau Associates, a $20 million Bedford-based environmental consulting firm, gives away dozens of carbon offsets — or should we say “windbuilder certificates”? — to clients she does businesses with.
The certificate reflects Hall’s purchase of offsets from Native Energy, a Vermont for-profit firm that is investing in a South Dakota wind farm being planned for development by the Rosebud Sioux tribe.
Those credits are retired by Clean Air-Cool Planet, a nonprofit group that works with businesses to fulfill the last step of becoming “carbon-neutral,” not for any regulatory reason — that might come later – but to enhance a company’s image of an environmental steward.
Actually, you can buy carbon credits that are generated closer to home, from an existing project, such as the North Country Environmental Services landfill in Bethlehem.
The landfill’s owner – Vermont’s Casella Waste Systems – sold the gas rights to a firm in Boston, Commonwealth Resource Management Corp., which flares the methane, such a potent greenhouse gas that burning it offsets more than 20 tons of carbon monoxide emissions.
Commonwealth markets those carbon credits or offsets to businesses worldwide through such intermediaries as the Chicago Climate Exchange, whose members sign legally binding contracts to voluntarily binding emission reductions, and through individuals, such as through Commonwealth’s Blue Horizon Web site, where 10 credits are sold for $50.
Such marketing raises more than the eyebrows of Bethlehem Selectman Lon Weston, who asks, “Why should anyone pay them to do what they have to do, anyway?”
“They have to torch the stuff,” he said. “If they didn’t burn it, it would stink up the whole town. What a corrupt way of doing business.”
“It’s the only way they control the odors,” agreed Wayne Wheeler, an engineer with the state Department of Environmental Services’ Solid Waste Management program, who oversees the landfill.
But on the other hand, the DES does certify that Commonwealth has been responsible for reducing the equivalent of more than 350,000 tons of carbon dioxide emissions since 1998. Other organizations have vouched for the program as well.
“Capturing and destroying landfill gas is a good thing for the environment,” explained Commonwealth owner Anton Finelli, who said that his business model and the criteria he uses, are just as valid – if not more so – then investing in a new project that may or many not turn into a reality.
Measuring footprints
Welcome to the complex and evolving world of voluntary emissions trading, which is a prelude to the carbon credit trading that businesses can look forward to as governments start demanding offsets as part of proposed cap and trade regulatory schemes at the regional (the Regional Greenhouse Gas Imitative, or RGGI), national or even international level.
“It’s like the Wild West out there,” said Bob Sheppard, chief operating officer and director of the business program for Clean Air-Cool Planet, which a few years ago started rating the myriad providers of carbon offsets.
Such offsets are not required now, since these regulatory programs are not in place, but they are still desired for those firms and individuals wishing to become “carbon-neutral.”
Offsets are supposed to be the last resort, not the first step, in neutralizing a carbon footprint. The first thing is to figure out how big that footprint is, and then what steps you can do to lower your company’s emission.
But hardly any company can finish the job without them, especially when discovering – as yogurt manufacturer Stonyfield Farm, one of the pioneers of the field found — that it doesn’t just consist of direct facility emissions, but also the emissions of your suppliers, your workers, your distributors, even your customers, when using your product. It all depends on where you – and the consulting organization you are working with – draws the line.
So after you’ve put in the largest solar array in the state (as Stonyfield did) and replaced mortgage closing documents with small compact discs delivered in a canvas bag with a “green earth in hands” logo (which Regency Mortgage does in Manchester) or give employees a $2,500 subsidy to buy a hybrid car (as does Regency and North American Specialty Insurance Company) you still end up contributing to global warming.
And the only way to offset that contribution is to go out and buy offsets.
What is accomplished?
As more and more companies buy offsets, the offsets become more and more valuable, coming from an increasing array of sources. And that raises all sorts of question about what “counts” as a true offset.
Is it a new project, like the wind farm in South Dakota? Or an existing one, like methane flares in Bethlehem, that would both have happened anyway, without any offsets to encourage them?
Even some of the companies that profit from some offsets question them.
Take the Concord Steam plant, located in the state’s capital. Once upon a time, it burned wood chips, but then the price of oil and gas plummeted, so in 1990 it burned those fuels instead.
But in 2001, it was cheaper to burn wood chips again.
Chopping down trees and burning them may not be what most people think about when they are fighting global warming, mused Peter Bloomfield, president of Carbon Steam, but wood chips are considered waste from trees that would be cut down anyway.
In any case, after Carbon Steam switched to wood, it now has generated practically no carbon emissions. Compare that to the base year used on the Chicago Climate Exchange, and Concord Steam now is producing roughly $60,000 worth of carbon credits a year, at prices ranging from $2 to $3.50 a credit.
As a business owner, Bloomfield is glad to take the money, “but I wonder if it’s really going to accomplish anything. It’s not enough money to support converting from oil to wood if wood wasn’t already cheaper. The reason people are doing it is not to save money, or because they care about environment, but because of the credit.”
Ironically, Bloomfield might lose some credits because he is now burning waste oil from restaurants. Recycling such oil would be good for the environment, but the technology is too new to count on the exchange. Still, Bloomfield might go for it anyway, because it “offsets me from buying virgin oil.”
But Sheppard, of Clean Air Cool Planet, thinks this is more than a feel-good exercise. They’ve worked with companies to actually reduce carbon emissions before there is any talk of buying offsets.
Regency Mortgage, for instance, has taken steps to reduce its carbon footprint, including replacing most of its lighting and offering incentives to employees to buy hybrids, even before the company began to actually measure its activities.
“I have a deep concern for climate change and how it is going to impact our world, particular in New Hampshire,” said Quentin Keefe, president of the company.
Big footprints
Eventually companies do want offsets, either to become completely carbon-neutral or for carbon-neutral events, such as to offset the impact of jet fuel used to attend a conference, for instance.
Stonyfield Farm began tracking its energy use back in 1990. It starting buying credits in 1997 to offset its facility’s energy use, but soon realized that the facility only accounted for a small part of its footprint. Most came from methane produced in milk production and packaging and distribution.
So it launched its Mission Action Plan to create teams addressing how to reduce waste and increase efficiency at every step in the process, from waste generation to packaging to milk production.
Despite all this, Stonyfield continues to invest in carbon offsets with Clean Air-Cool Planet, which has been working with Native Energy for more than five years now on alternative developing energy projects on tribal lands.
One project, the Rosebud Sioux wind farm, started as a simple windmill. Native Energy gave the developers $250,000 to purchase a 20-year supply of future credits in that one windmill.
Now the developers are working on financing a full-scale wind farm. The Sioux tribe will not only get income from the turbines, but jobs to maintain them.
“We prefer bringing new sources online,” said Sheppard.
Above and beyond
Contrast that to a landfill where trash has been dumped for years and methane has been flared for over a decade.
Commonwealth didn’t just start out flaring the methane. For the first five years, it used that energy to evaporate the leachate from the trash in the landfill. By evaporating it, Commonwealth not only got rid of the methane, it also reduced the volume of the landfill’s liquid waste, saving trucking costs (and carbon emissions), as well as the cost and energy to treat it later.
“But no good deed goes unpunished,” said Finelli.
Some neighbors were concerned about the emissions: about 6.5 tons of particulates, including 2 tons of sulfur dioxide, 10.5 tons of nitrogen and 15.8 tons of carbon monoxide in 2007, according to DES.
These numbers are relatively low, said Pam Monroe, compliance bureau administrator in the air resources divisions — but try telling that to some of the residents in the town.
Furthermore, residents complained that the evaporator wasn’t burning hot enough, resulting in toxics getting into the air. DES inspected it, and found that the emissions were murky enough to warrant further testing of the ambient air, Monroe said. After some back and forth, the company agreed to test, but then Casella Waste Systems, owner the landfill, ended the contract, and the whole point became moot.
“DES was finally about to test the air, and then they decided to shut it down,” said Weston.
But Joe Fusco, vice president of Casella Waste Systems, said that testing had nothing to do with the decision to end the contract. First, the company made some technical improvements at the landfill and was not producing as much leachate, so there wasn’t as much to dispose of.
Secondly, the company was moving to burning methane to produce electricity at its landfill.
So for now, Commonwealth is simply flaring the methane, a fairly standard practice to control odors. But Finelli takes issue with the charge that his firm is just getting paid for what it has to do anyway. There is a difference between a requirement to burn the methane (as some larger landfills are required to do under federal regulations) and being required to monitor the methane and only mitigate it when it reaches a certain level. That, he contends, is the case here.
Therefore, burning methane at the Bethlehem landfill goes above and beyond what is required, and to prove it, he points to the DES registry which gave him credit for reducing emissions.
“Different programs have different criteria to qualify,” he said. “The main thing on the buy side is whether they are causing something that wouldn’t otherwise have happened. Under our model, the emission reductions have already occurred, and that is a good thing.”
“A credit is just a credit,” adds Fusco. “People don’t care where it comes from. People get too wrapped up in the sexy part of environmentalism. The real gain is in everyday things.”