Financial Soultions: The fine line between renewable credits and Co2 offsets.

Oct. 5, 2009 - PRLog -- Under the new U.S. climate bill, experts argue that Renewable Energy Credits should not be qualified as carbon offsets, according to an environmental policy source known to Financial Soultions.

Carbon offsets are generated by greenhouse gas cut backs achieved by clean energy projects like wind farms, and that these are 'additional', signifying that they would not have been financially feasible without the prospect of offset sale revenues.

They are produced when renewable power generators sell electricity and then sell the environmental elements of that electricity separately through a certificate symbolizing one megawatt hour of low-carbon power, Financial Soultions understands.

Whilst RECs are traded in several U.S. states, they have been branded "a poor man's carbon offset," by field experts, arguing they do not finance additional renewable energy and therefore should not be eligible under a U.S. cap-and-trade scheme.

"We don't like the idea of RECs as offsets and don't want to see this in a bill," a senior fellow at climate policy think tank on Global Climate Change, told Financial Soultions sources.

Climate bills proposed by the U.S. Senate recently and passed by the House of Representatives earlier this year would see U.S. carbon dioxide emissions cut to between 17 and 20 percent below 2005 levels by 2020.

Financial Soultions, who are known in the Carbon Credit trading arena reports that firms not capable of cutting emissions inexpensively can buy offsets, thus creating a market of up to 2 billion tonnes of carbon annually.

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