If you thought President-elect Joe Biden’s promise to go carbon neutral within 15 years was merely campaign rhetoric, think again.
Biden appointed Paris Agreement negotiator John Kerry as his climate czar, a new position that he created to elevate the issue of climate change. He also unveiled a transition agenda that includes “achiev[ing] a carbon pollution-free power sector by 2035” as one of its top priorities.
Many have discussed their thoughts on the political wisdom or senselessness of this public policy priority. However, few have really called out the elephant in the room: It’s not possible and will only enrich Wall Street at everyone else’s expense.
It’s easy to preen “green” when you have enough green to buy a certificate for not actually being green yourself. This buying-of-your-image works a lot like buying your way out of the draft did during the Civil War: A guy with enough money could hire someone else to take his place.
Today, corporations, big universities, and even big media companies do the same, often without even realizing it, by purchasing Renewable Energy Certificates, or RECs. They are sold by middlemen such as xGreenPowerLLC, which makes its own green in the exchange.
In lieu of directly buying solar panels or wind-farmed power, one buys the REC. This enables the REC buyers to avoid the hassle of actually installing the panels or sweat the prospect of brownouts from undependable green power that comes and goes with the wind or sunshine. They bask in the glow of being green, but reality paints another story.
For instance, Nike, which Newsweek ranked as one of the greenest companies in America, is not even listed on the Corporate Renewable Energy Index, which ranks companies according to their actual use of renewable sources of energy. But Nike buys lots of RECs, and probably in part because RECs are less expensive than buying and installing solar panels or using wind-farmed power. Companies have a financial and political or marketing incentive to buy them.
Ironically, this undermines the market for actually-green alternative energy since the money goes to the REC broker rather than directly to the producer of the alternative energy, thereby decreasing the money earned by the producer for the sake of REC broker profit.
There is also an element of soft extortion at work since businesses, and even not-for-profits such as public universities, are often under a great deal of pressure to source their power from green alternatives. In some cases, they are even required to buy in.
RECs don’t even necessarily translate as renewable sources of energy. As Daniel Press, professor of environmental studies at the University of Santa Cruz, explains, RECs are also bought and sold based on “environmental attributes.” In plain language, that means something like the image of greenness, not the actual green thing itself.
The REC buyer may think he is buying a certain quantity of green energy to offset the use of not-as-green energy — for example, electricity generated by a wind turbine rather than a coal-burning utility plant. But the seller of the REC can claim that, in addition to the electricity being generated by the wind turbine, there is also the environmental attribute, and that can be sold as a REC, too.
At the University of Santa Cruz, students agreed to self-tax themselves to the tune of $100,000 to buy what they thought was green energy that turned out merely to be the attribute of greenness. This amounts to a twofer scam.
The first scam is the buying of green to be able to preen green without actually being green. The second is the selling of nothing that’s actually even green but merely has the attribute of greenness.
The REC brokers cash in on this by selling the REC “attributes” for less than the actual wind, solar, or biomass energy, which makes it seem that environmentally concerned buyers are getting a good deal when in fact, they are getting ripped off.
“The reason everyone wants to buy RECs,” Press explains, is “because green power is more expensive than conventional power; that’s part of the problem.” A REC might cost a cent or a fraction of a cent versus several cents for coal-grid power and several more cents for solar or wind-equivalent power. Nothing green is actually purchased.
Interestingly, this would have constituted actionable fraud before 2012, before the Obama administration made it legal via regulatory legerdemain to preen green without actually doing or selling anything green.
Given the stated intention of Biden to ramp up alternative energy production, there will be even more incentive to buy and to cash in on the selling of these RECs — even if the only thing green about them is the color of the money being made.
Kevin Mooney (@KevinMooneyDC) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an investigative reporter in Washington, D.C., who writes for several national publications.
