What's the difference between carbon offsets and renewable energy credits? Is one better?
Matt Hickman unravels the mysteries behind offsetting CO2 and buying RECs. (Hint: One of them can fund tree-planting efforts.)
Mon, Nov 08, 2010 at 09:31 AM
Q: Hello again and thanks for enlightening me on the ins and outs of green web hosting for my small business a few weeks back. Much appreciated. Well, what do you know? I’m back to pick your brain yet again. In your response to my first query, you mentioned going with a green web hosting company that purchases renewable energy credits (RECs) and/or carbon offsets. Well, both have come up again, this time in regard to my own business, and the thing is, I’m not crystal clear on what the difference between an REC and a carbon offset exactly is. I have an inkling but would love it if you could set me straight before I consider purchasing either for my business.
Grace — Centennial, Colo.
A: Hey Grace,
No sweat at all and glad I could provide insight into green web hosts. It seems to me that carbon offsets and renewable energy credits (RECs) are thrown around a lot as eco-biz buzzwords, sometimes interchangeably, with some folks not really understanding the somewhat head-scratching difference between the two. So I’m glad you asked …
The quick answer: Carbon offsets are commodities that represent reduced greenhouse gas emissions, usually measured in metric tons, while RECs are commodities that support renewable energy efforts like wind or solar power and are measured in megawatt-hours. Both are viable options, but if you’ve done a bit of looking around already, you’ll have noticed that offsets are more ubiquitous, easy to understand and, I hate to use the word, “mainstream.”
Why? It’s partly because carbon offsets can be used to negate any method of CO2 generation and directly fund carbon reduction projects whether it’s the generation of clean energy or tree-planting efforts. Renewable energy credits, however, are much less inclusive as they apply only to renewable electricity generation and not the direct curbing of global warming-causing greenhouse gas emissions.
Triple Pundit also offers another reason as to why carbon offsets are perhaps more popular with consumers and business: “RECs are forward looking — focused on building a clean energy economy and providing an extra incentive for the creation of renewable energy, while carbon offsets are oriented in the present — dealing with preventing greenhouse gases from entering the atmosphere right now.”
Here’s an easy way to look at it: If you decide to purchase carbon offsets you can proudly claim, “I’ve reduced xxxx tons of CO2 generated by my business, including that trip to Cleveland for the trade show, by purchasing carbon offsets.” Whereas with RECS you can boast, “my business is 100 percent wind-powered” (even though it may technically not be, you’ve still got the bragging rights to say so).
On the topic of easy, here’s a more text-booky explanation of the differences between the two from the wise sages over at the Environmental Defense Fund to help clarify:
Carbon offsets are verified tools to achieve greenhouse gas emission reductions. Buying a carbon offset allows you or your company to claim a reduction of your carbon footprint. A renewable energy certificate, or REC, is proof that a megawatt hour (MWh) of renewable energy has been supplied to the market. Purchasing RECs helps develop the renewable energy supply by subsidizing the higher cost of renewable energy. While RECs provide proof that renewable energy has been supplied, they do not offer verified proof that greenhouse gas emissions are reduced. Purchase offsets when you want to buy an emission reduction to reduce your net carbon footprint. Purchase RECs when you want to buy “green power.”
Capisce? I’d look into purchasing both RECs (to supply electricity to your business at its brick and mortar location) and carbon offsets (for everything else). However, Grace, if you’re strictly concerned with lowering the carbon footprint of your biz, I’d start in with the offsets and work your way up to RECs.
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