Everyone from Al Gore and Bono to General Electric’s Jeff Immelt are talking green these days and lots celebrities and businesses are “offsetting” their high CO₂ activities with credits that might not really offset the activity they’re supposed to offset.  While the notion of “Cap and Trade” pollution credits, or fees to offset costs of green energy production is not a new idea, but recently it seems that every jet setter is buying the credits to make their lifestyles look like they’re green.  Do these credits help create renewable energy sources or just provide PR for the dangers of global warming?

The article discussed Aspen purchasing renewable energy credits (RECs) for $2 per megawatt/hour of electricity they produce.  This $2 per megawatt fee, is allegedly going to cause more windmill or solar plants to built. Given that electricity retails for 7-12 cents per kilowatt/hour the $2 number is only .2 cents, or only about 1/3 of 1% of the cost electricity sold at 7 cents per kw/hr.  These numbers mean that over a 30 year period a power plant/farm would offset just 10% of it’s cost, hardley a compelling reason to go green if the costs are not equal to current technologies.

There is a very long article on the topic in Business Week this week, which was the inspiration for this article.  The article which discusses buying environmental credits with managers at Aspen Skiing and Johnson and Johnson.  In both cases the credits seemed to be the only way to allow the businesses to grow and do something green.  Companies cannot see any justification in spending money on environmental friend innovations that require 5, 10, or even 20 years to pay off.