IPPBC member, Reknewco (Renewable Energy Knowledge Company), had the following article in the Globe & Mail last week.

Below the article is more information on Reknewcos carbon credit purchases and their plans to purchase credits from Canadian IPPs.

Credits offer polluters peace of mind

RICHARD BLACKWELL

Globe and Mail Update

Feeling guilty about driving your SUV through the crowded streets of the city while a grey pall of smog sits on the horizon?

Now you can assuage your guilt by doing what some of the biggest industrial polluters do: buy "carbon credits" to offset your personal greenhouse gas emissions.

Companies are springing up across North America to help arrange these transactions. They'll calculate the annual emissions from your car, and sell you a credit that means someone else's pollution-cutting efforts have balanced off your greenhouse gas creation.

For your credit card payment, usually between $50 and $100, you get a sticker that shows your car emissions have been offset.

While the business appears ripe for scams, environmental activists say so far there's no hint of scandal, and they support a trend encouraging people to take responsibility for their role in global warming.

"I've heard of no horror stories whatsoever," said John Bennett, senior policy adviser at the Sierra Club of Canada. As long as the credits can be verified, "it's one way for individual acts to accumulate into something significant," he said.

So far, there are at least a half-dozen offset organizations in place in the United States, and a couple have popped up in Canada.

One of those is Cleanairpass, an organization set up by Toronto renewable energy company Reknewco Ltd.

Its system works like this: An individual uses a calculator on the company's website to figure out how much carbon dioxide their car emits. The company then sells them a "clean air pass" -- essentially a sticker that says the car's emissions are covered for a year.

The company takes the money from all those who subscribe, pools it, and then uses it in one of two ways: It gives the money to Tree Canada -- an Ottawa foundation that plants trees to offset carbon dioxide emissions -- or it buys emission credits from the Chicago Climate Exchange (CCX).

The CCX was set up in 2003 as a voluntary marketplace, where companies that exceed specific pollution-reduction goals can sell credits to those that have not met their targets. The bulk of the membership is large companies, but smaller organizations can also join.

Cleanairpass and other offset sellers buy carbon credits on the CCX and "retire" them, which means no one else can get credit for the reduction in carbon emissions.

Some carbon credit companies also buy and retire "renewable energy certificates" -- credits created by wind energy, solar energy, biomass or other alternative energy systems that are given a stamp of approval by one of two certification organizations in the United States.

Reknewco chief executive officer Bryce Conacher said Cleanairpass, which has been up and running since late last year, has already bought and cancelled 600 tonnes of carbon dioxide credits on the CCX. And it is set to buy another 500 tonnes within a couple of weeks.

Mr. Conacher won't disclose how many subscriptions that represents, but he said it amounts to about two million kilometres of driving.

It's not only individuals who have signed on. Ken Johnston, president of Vancouver company Novex Couriers, has already paid about $1,400 to cover the emissions of the personal vehicles owned by about 35 of his staff. He plans to spend about 10 times that much to offset the emissions from his entire courier fleet.

It's all part of a concerted effort by Novex to be as green as possible. The company also has 17 hybrid cars in its fleet of 100 vehicles, and runs four natural gas vans.

Mr. Johnston admits to a few misgivings about the way the carbon credit system works, and he's a bit puzzled about the function of the CCX trading system.

Still, "it can be baby steps, and some things are not always perfect, but it's a start," he said. "I'm hopeful it will have a positive impact . . . we're trying to find a way to do the right thing."

Mr. Johnston said he was unaware Cleanairpass currently uses 75 per cent of the money it receives for administration, with only 25 per cent actually used to buy credits.

Mr. Conacher said his company's goal is to reverse that ratio so that three-quarters of the funds go to credits, but startup costs and the difficulty in projecting carbon credit pricing makes that impossible at the moment.

He also hopes to be able to buy emission credits in Canada soon -- possibly at the planned Montreal Climate Exchange -- and eventually to refine the Cleanairpass system so customers can gear their support to carbon-cutting programs in their own region.

Marlo Raynolds, executive director of the Pembina Institute for Appropriate Development, an Alberta-based environmental research firm, said the personal carbon credit market will work in the long term if there is a transparent and standardized system of verification, so buyers can be assured their money is really being used to reduce emissions.

"If we had a clear domestic emissions trading system that set clear rules, it would go a long way to empowering individuals and companies to buy offsets," he said.

What's happening now is a "learning phase" where companies are experimenting, Mr. Raynolds said, but eventually "it's going to develop, it's going to advance."

Reknewco’s first carbon credit purchases, 600 tonnes and 500 tonnes specifically were U.S. projects because there were not any Canadian sources listed with the CCX at the time of purchase will to sell a relatively small amount of credits.  

Reknewco plans to purchase credits from IPPs across Canada as the framework to do this emerges, and we have enough consumer demand to support the cost. They want to link local buyers with local sources on a province by province basis (or state by state in the US). 

Reknewco currently source their credits from the Chicago Climate Exchange (CCX).  Their long-term goal is to be able to source credit and/or RECs from regional sources (ie. the region from which the cleanairpass was purchased).  They launched using the CCX because it is the most legitimate, auditable source available in North America right now.  They are now ready to begin sourcing directly from certified sources in Canada, especially if they are listed on the CCX.  There is a hope that the Montreal Climate Exchange will come into being in the not to distant future.  That of course depends on Minister Ambrose and Prime Minister Harpers plans for a Kyoto replacement.  Until then, Reknewco is using the voluntary mechanisms available today. 

They are not in the market for more credits at this time, but they want to begin sourcing process in the near future. Product information at: www.cleanairpass.com

Interested IPPs that are ecologo certified should call President Bryce Conacher at bc@reknewco.com.