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Purchasing Renewable Energy Credits in Washington, DC USA - Climate Literacy: Navigating Climate Change Conversations
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Purchasing Renewable Energy Credits in Washington, DC USA - Climate Literacy: Navigating Climate Change Conversations

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Information about renewable energy credits, how they differ from carbon offsets, and cost to switch to renewable energy, in Washington, DC, from the course Climate Literacy: Navigating Climate Change ...

Information about renewable energy credits, how they differ from carbon offsets, and cost to switch to renewable energy, in Washington, DC, from the course Climate Literacy: Navigating Climate Change Conversations ( see https://www.coursera.org/course/climateliteracy )

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    Purchasing Renewable Energy Credits in Washington, DC USA - Climate Literacy: Navigating Climate Change Conversations Purchasing Renewable Energy Credits in Washington, DC USA - Climate Literacy: Navigating Climate Change Conversations Document Transcript

    • Moving to Renewable Energy in Washington, DC, USA Climate Literacy: Navigating Climate Change Conversations Washington, DC Washington, DC is the capital of the United States, with a population of 632,323 in 2012, making it the 24th most populous place in the United States. As a city, it is unique in that is is within the District of Columbia, which is not part of any U.S. State. It is under the exclusive jurisdiction of the United States Congress. The city has endured decades of population decline, with a peak of 802,178 in 1950, to a low of 572,059 in 2000. With the District’s population growing steadily, with 30,600 residents since 2010 ( a 5 % increase) Mayor Vince Gray announced in 2011 that he wanted to make the District “the healthiest, greenest, most livable city in the nation,” which included the launch of Sustainable DC and these as a few milestones: “...more than 300 LEED certified projects with another 700 in the pipeline and we have just announced plans to adopt a new green building code that will dramatically reduce the future environmental footprint of our built environment. Across the city, residents and businesses have installed more than 750 solar energy systems and the District government now purchases 100% green electric power.” Renewable Energy and Renewable Energy Certificates (RECs) For the purpose of this assignment, I am focusing on renewable energy and the impact it could have on climate change. Washington, DC is already ranked #1 in the US Environmental Protection Agency Green Power Community Challenge1 with 1 billion killowatt-hours or 11.4% of electricity supplied by green power. The green power purchased by the Washington, DC Community is listed as “Washington Gas Energy Services*, Various, Constellation*, Clean Currents*”, which are certified by the Center for Resource Solutions’ Green-e Energy Program.2 1 http://www.epa.gov/greenpower/communities/gpcrankings.htm 2 http://www.green-e.org
    • A Renewable Energy Certificate (REC) is not the same as a carbon offset. Instead, it is an “attribute” of renewal energy generation that includes information about the energy created, and sold as a certificate on the voluntary market. From the green-e.org FAQ3: in general, the difference is that a REC represents the environmental benefits of a MWh of renewable electricity generation, and so it can be said to “offset” the emissions of a single MWh of average electricity generation. A carbon offset can be matched with emissions from other sources of greenhouse gas emissions (not just electricity generation), like flying and driving. A REC is a measure of the overall environmental benefits associated with the generation of 1 MWh of renewable electricity. These benefits include the fact that few if any greenhouse gases and other pollutants are being emitted from this generation. Purchasing RECs A consumer in Washington, DC can “switch” to renewable power (which comes from wind) instead of standard power (which comes from coal) by enrolling with Clean Currents Wind Power.4 There are two renewable power options, based on the purchase of Wind power from national markets, or from local markets. As it shows in the chart below, locally purchased wind is slightly more expensive. A review of the author’s current electricity bill shows the current charge for standard power to be 0.0892400 per KWH after the first 30 KWH, which makes wind power about 120% the cost of standard power in Washington. DC From a feasibility/convenience perspective, this appears to be a straightforward process to engage in as a citizen, or as a business. 3 http://www.green-e.org/learn_re_faq.shtml#q7 4 http://www.cleancurrents.com/residential-wind-power/understanding-your-bill/ source: green-e.org
    • In fact the District of Columbia government purchased 50% green power in 2011 and increased to 100% in 20125 Impact on climate of purchasing RECs There are several notes about carbon equivalency claims and depending on where you look, the language is more nuanced. There is a document called the Code of Conduct6 that takes great care to provide guidelines for carbon equivalency, which it suggests should be no more than 1,118.86 lbs of CO2/MWh, and states: “Participants shall not use these claims to suggest the purchase of a Green-e Energy Certified product can be used to directly address the emissions associated with activities other than electricity consumption.” However, electricity composes a large portion of greenhouse gas emissions in Washington, DC. It appears, then, that there is an indirect impact on climate through incentivizing the manufacture and installation of renewable energy systems. A caveat, or expectation, is that the purchase of renewable energy produced elsewhere may not count toward the reduction of carbon emissions by a sub-national/ regional entity, as the Washington, DC Greenhouse Gas Inventory describes: because most purchases of green power are made from national markets, they do not reduce local emissions or factor into GHG inventories. While very important to the growth of a national renewable industry, many of the reductions occur far away and are purchased as renewable energy credits.7 Implications / resources / possible barriers Renewable Energy Certificates present a simple way for ordinary citizens and businesses to incent the production of renewable energy. They may also create a 5 2011 District of Columbia Greenhouse Gas Emissions Inventory, http://ddoe.dc.gov/service/dc- greenhouse-gas-emissions-inventory 6 Green-e Energy Code of Conduct and Customer Disclosure Requirements, retreived from http:// www.green-e.org/getcert_re_stan.shtml#coccdr 7 2011 District of Columbia Greenhouse Gas Emissions Inventory, http://ddoe.dc.gov/service/dc- greenhouse-gas-emissions-inventory
    • tangible linkage between the effects of fossil fuel burning and climate change in the consumers’ mind. Simplicity is an advantage - a certificate is issued for 1 MWh of electricity generation that may not be resold. There are no opaque auctions or trading happening, it is a 1:1 exchange. Another advantage is that the action taken has a national or global impact if the REC is purchased from national markets, even if a local government such as Washington, DC, cannot attach these to its local CO2 emission reduction targets. Barriers and challenges include the fact that there may be a limit on how much renewable energy may be purchased through this mechanism. In addition, it is not clear how this system would result in the decommissioning of coal-fired plants, or how the two actions would be linked in the consumers’ mind. Also, different households may have sensitivity to an electricity charge that is 120% of standard power charges. As discussed in the course and in the Washington, DC, Sustainability Plan, there has been thought given to a carbon tax, which might be able to distribute the burden of fossil fuel usage more appropriately across the population. The District will incentivize reductions in greenhouse gas emissions by developing financial tools to capture the “true” costs of products and services, including their costs of environmental impacts. One incentive could be in the form of a fee-and-dividend carbon tax that would first require a feasibility study to understand how to design and implement such a progressive tool. This tax would place a fee on all energy use; fossil fuels, with the highest carbon content, would incur the highest fees, while cleaner fuels would incur the lowest fees. As fees increase over time, users would be encouraged to switch to cleaner fuels and reduce their emissions. The revenue generated by the carbon tax would be reinvested in future climate protection, preparedness, and adaptation programs.8 8 Sustainabilty DC Plan, http://sustainable.dc.gov, page 42