All carbon offsets are not created equal (in fact, most of them are bogus). There are alternative energy companies in our "deregulated" energy market here in Illinois who will sell you "100% clean electricity" in the form of offsets. These offsets represent things like wind farms in Texas that were built years ago -- buying a "credit" for this electricity does nothing to add new renewable capacity to the grid, remove more carbon from the atmosphere, or change our emissions landscape in any way whatsoever. Credits for new renewable generating capacity one could argue to be a positive thing, but this market is pretty much entirely unregulated now and most of these products are not much more than accounting tricks.
> These offsets represent things like wind farms in Texas that were built years ago -- buying a "credit" for this electricity does nothing to add new renewable capacity to the grid, remove more carbon from the atmosphere, or change our emissions landscape in any way whatsoever
The producer being able to sell those credits going forward is what made the plant economical to build in the first place.
How are other credits for "new renewable capacity" any different? That new plant is going to be producing renewable energy and selling renewable energy credits for long after it gets built. The projected returns from selling those credits is part of the financing they used to build it.
If more people are trying to buy RECs, the market value of those RECs goes up, and it enables more producers to invest in new renewable capacity because they'll be able to sell RECs for more money.
Of course the additional credits on the market could push prices back down if a lot gets built (woo fucking hoo, that's what we're trying to encourage!), and the market demand for more credits to purchase is also increasing as governments pass requirements for XX% renewable capacity by YYYY year.
1) A producer gets a REC for putting 1 MWh into the grid from renewable generation. This energy mixes in with all the other energy on the grid, it doesn't go anywhere in particular.
2) The producer sells this REC on the market.
3) The consumer who buys the REC is considered to have purchased renewable energy, either to meet renewable energy requirements or just for their own personal reasons because it's a good thing to do.
In 29 states, DC, and PR, they have "Renewable Portfolio Standards" which require electric suppliers to have a certain amount of renewable energy in their production portfolio. They can own this production capacity and make the RECs themselves, or they could burn natural gas and buy a bunch of RECs from a third party, or even a bunch of people with solar panels on their roofs.
Beyond those 29 states, people also buy them just to say "We run on clean energy." A friend of mine has an electric car and buys renewable energy to go with it. Did the actual electrons in his car come from a wind turbine? No, but he's helping make wind power more economically viable through the renewable energy credits.
There's only so many offsets to go around though, right? So demand for them _should_ produce demand for new energy if enough of the offset demand... right?
