March 25, 2009

The Chicago Way

Oh Boy now we are taking it national!

Chicago's 'green' promise fades
Chicago taxpayers on hook for carbon credits that do little to fight global warming
Mayor Richard Daley promised long ago that his administration would start fighting global warming by buying 20 percent of its electricity from wind farms and other sources of green energy. But more than two years after the deadline he set, the city continues to get nearly all of its power from coal, natural gas and nuclear plants, according to records obtained by the Tribune.Daley administration officials contend they have kept the mayor's promise by buying carbon credits, a controversial way of offsetting pollution by paying money to producers of green energy. The credits are supposed to lower the amount of heat-trapping carbon dioxide sent into the atmosphere.But most of the credits Chicago has bought over the last two years didn't reduce carbon emissions at all, energy experts and the city's own broker on the deal said.

As a result, taxpayers paid the full bill for the city's normal electricity usage, then the city paid again—more than half a million dollars in all—for credits with questionable environmental benefits. Buying carbon credits fights global warming only if they help finance new sources of renewable energy, such as new wind turbines, energy experts said. Yet 87 percent of the credits Chicago has purchased sent money to a wood-burning power plant that has been operating for nearly two decades.

"This is very misleading to the public," said Joseph Romm, a senior fellow at the Center for American Progress who has sharply criticized the carbon offset market. "A city with the clout of Chicago should be able to do this right."

Acting on similar concerns, the U.S. House of Representatives decided last month to stop using carbon credits to offset the chamber's emissions. Like Chicago, the House had been buying credits that supported established energy projects.

It was 2001 when Daley promised that city government would be getting a fifth of its electricity from renewable energy sources by the end of 2006. In November of that year, the Tribune reported that the city had not bought any green energy since 2004. Chicago started buying carbon credits in 2007. In response to Tribune questions, the city provided a certificate from an Iowa-based power company stating the carbon credits that Chicago purchased that year were equivalent to planting 9,317 acres of trees and offset about 35,000 tons of carbon dioxide.

"This is about leadership and trying to demonstrate that we can have an impact on a global issue with local action," Sadhu Johnston, Daley's deputy chief of staff for environmental issues, said in an interview.

While the numbers look good on paper, city records show that only 5 percent of the electricity used by city government in 2007 was offset by credits supporting the construction of wind turbines and geothermal plants. The following year, the figure fell to 1 percent.

Most of the city's credits went to a North Carolina power plant that opened in 1990 to burn wood waste, or biomass, from the lumber industry. Though biomass plants are viewed as a source of renewable energy, the credits amount to little more than a financial bonus for a facility that had been operating long before Chicago paid a dime.

In a September e-mail to city officials, obtained by the Tribune through the Freedom of Information Act, the broker that handled the deal said most of Chicago's credits "do not have a value in offsetting" carbon dioxide because they came from an existing energy source, not a new one. The city's purchases of carbon credits are a little-discussed detail of an otherwise high-profile campaign by Daley to burnish Chicago's environmental image.

Among other things, the credits helped city government meet pledges it made six years ago to the Chicago Climate Exchange, a commodities market where greenhouse gases are traded like pork bellies or cattle futures.

When Daley joined the exchange and became its honorary chairman, the city promised to cut its heat-trapping emissions by 4 percent between 2003 and 2006 and another 6 percent between 2007 and 2010. City officials have had some success in reducing demand for energy—electricity usage by city government fell slightly last year—but they needed carbon credits to meet the exchange's targets.

"Our preference would be to reduce energy use and generate our own green energy," Johnston said. "We're trying to be realistic about doing this in a way that is the most cost-effective."

The credits also made the city eligible for a U.S. Environmental Protection Agency list that promotes the nation's top purchasers of renewable energy.

To join the EPA's Green Power Partnership, buyers need to get at least 2 percent of their electricity from new sources of renewable energy. Older sources, like the wood-burning plant that sold credits to Chicago, don't count but are recognized as additional purchases.

In September, Daley nudged businesses and residents to start reducing their own contributions to climate change, and vowed the city would lead by example. By working harder to conserve electricity and investing in green energy, he said, Chicago could reduce carbon dioxide emissions by 25 percent from 1990 levels within the next 12 years.

The mayor cited the city's renewable energy purchases as part of his ambitious plan—a point that was repeated in several gushing stories about Daley in national magazines and newspapers.

Daley didn't mention the carbon credits, which have become a popular but controversial way for corporations, governments and individuals to offset their contributions to global warming pollution.

Working in a growing but largely unregulated market, carbon brokers estimate how much climate change pollution a buyer generates, then sell offsets that help finance tree-plantings, renewable energy sources or other projects that supposedly cancel out an equal amount of emissions.

This month the federal Government Accountability Office joined energy experts and environmental groups in criticizing the lack of standards for carbon offsets. The Federal Trade Commission also is investigating whether the environmentally friendly claims of credit brokers amount to false advertising, or "greenwashing."

Critics say tougher rules are needed if carbon credits are included in President Barack Obama's sweeping plans to fight climate change.

"If the money is just gravy for some energy provider," said Mark Trexler, a Portland, Ore., consultant who advises corporations about the carbon offset market, "how does that benefit the environment? It doesn't."

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