This week’s writer is Roger White, an artist, teacher and volunteer with 350VT from Middlebury.

Editor’s note: This is Part 2 of a commentary. See Part 1 here.

If meeting the demands of the climate crisis were just a matter of making numbers work out on a spreadsheet, Vermont would be in great shape. But unfortunately, it’s a matter of actually reducing our greenhouse gas emissions and preserving our ecosystems. To understand how Vermont’s environmental standards work, and how we can improve them, we need to take a closer look at the way they quantify the environmental effects of different energy sources.

Utilities and regulators keep track of the production and consumption of renewable energy through a system of Renewable Energy Credits, or RECs. The proposed Clean Heat Standard would require a comparable system of “Clean Heat Credits” in order to function. These systems are necessary for our energy accounting, but they also allow for misleading claims about how clean our energy actually is.

RECs are certificates that correspond to amounts of renewable energy: one REC is “created” when 1 megawatt hour of energy is produced from a renewable source. When that energy is consumed, the REC is “retired,” or taken out of circulation. A utility complies with the Renewable Energy Standard by “retiring” a sufficient number of RECs per year, demonstrating that the energy it provided to consumers was generated from renewable sources.

Energy credits can also be bought and sold as separate commodities. (When this happens with RECs, the REC is said to be “unbundled” from its corresponding unit of renewable energy; what is being bought and sold are the “environmental attributes” of the energy, rather than the energy itself.) This allows utilities to offset their distribution of fossil fuel energy through the supplemental purchase and retirement of RECs.

In theory, credit systems ensure that standards are met, incentivize the use of renewable energy, and keep consumer costs as low as possible. But they can also act as a disincentive for utilities and suppliers to provide energy from genuinely clean and emissions-free sources. Here are two examples:

1. Some of Vermont’s supply of “renewable natural gas” comes from biomethane recovered from a wastewater treatment plant in Iowa. But the reality is more complicated. If permitted by a Clean Heat Standard, the utility could purchase this biomethane, use its “environmental attributes” to comply with the standard, then sell the gas and replace it with fracked gas from a hub in Ontario. This gas, rather than the biomethane, would be supplied to Vermont consumers.
2. Because Hydro-Québec is considered a renewable energy source by the state, Green Mountain Power can meet most requirements of the Renewable Energy Standard by buying and retiring the RECs generated from Hydro-Québec alone. This allows it to sell (at a profit) the renewable energy credits it generates or acquires from in-state solar and wind production to other, out-of-state utilities (who use them to meet their own state requirements). In this example, the sale of unbundled RECs means that the electricity GMP ends up providing to its customers isn’t generated from solar or wind at all: the utility has forfeited the right to make that claim when it sold those credits.

If it’s permitted, and cost-effective, to meet environmental standards by purchasing renewable energy credits but delivering non-renewable energy, then utilities have no reason to invest in genuine renewable energy at all. We’re stuck with a textbook case of “greenwashing,” where the language of environmental responsibility is used to obscure environmentally damaging practices.

If we’re serious about climate change mitigation, we need to begin by honestly accounting for the environmental impact of large-scale hydropower from Hydro-Québec. Treating this energy as renewable is an abuse of the term that borders on fraud. Luckily, the Renewable Energy Standard already includes a structure for differentiating between different categories of renewables. We need to adjust the rules of compliance such that utilities move away from a reliance on out-of-state hydropower, and toward achieving resiliency through in-state energy production (using provably cleaner and emissions-free renewables like solar and wind energy.)

Likewise, if we want to make genuine progress on cleaning up our heating fuel supply, we can’t play word games with the definition of “clean.” More progress can be made toward reducing the environmental impact (and costs) of heating by investing in weatherization than by investing in biofuel and renewable natural gas.

As with other financial products, Renewable Energy Credits (and proposed Clean Heat Credits) need proper regulation. It’s of doubtful wisdom to let environmental credits from large-scale hydropower, biofuel, or renewable natural gas allow Vermont utilities and fuel providers to comply with state standards. Ultimately, we should rule out the sale of unbundled RECs and Clean Heat Credits altogether on the grounds that they make greenwashing far too easy.

Environmental Standards are hard, complicated things to get right: they require us to balance short- and long-term objectives, weigh aspirations against realities, and consider the needs of everyone they affect. But we do ourselves and our descendants no favors when we misrepresent what they’re actually achieving.