Articles by Sean Casten

Rep. Markey asks the Federal Trade Commission to investigate voluntary carbon offsets

Rep. Markey has asked the FTC to investigate whether or not the sale of voluntary carbon offsets violates the Guides for the Use of Evaluating Environmental Marketing Claims, as laid out by the Federal Trade Commission. The FTC has responded and agreed to commence an investigation, noting that:

The FTC staff has been monitoring this nascent market as part of the Commission's ongoing consumer protection programs in the energy and environmental areas. The carbon offset market poses potential consumer protection challenges. Carbon offset claims may present a heightened potential for deception because it is very difficult, if not impossible, to verify the accuracy of the seller's claims. At the same time, the sale of carbon offset products afford interested consumers the opportunity to participate in the market for products and services that may reduce greenhouse gas emissions. Because of the benefits that this developing market may provide, we want to better understand the market to avoid acting in a way that could restrain innovation or harm consumers.

For full details, see here.

There is clearly a potential for fraud and cause for investigation, but my personal guess is that this is also a good example of the cost of not participating in Kyoto. The accounting for GHG offsets is really complicated, and the formal, audit-worthy work on that topic is now being done in London and Brussels. Voluntary markets are an attempt to bridge that gap, but will never carry the rigor of a Big-4 audited statement.

In any event, this will be worth following to see how the story develops.

U.S. energy consumption decreased from 2005 to 2006

According to new data from the DOE, total U.S. energy consumption actually declined from 2005 to 2006, in large part due to an increasing demand for renewables. Rather fascinating stuff.

Details here.

Not your father’s Old Coal

In thinking and responding to posts about the latest EPRI propaganda, a couple questions came to mind. Questions I'm a bit embarrassed I hadn't thought of before, so I pose them to you now:

1. If coal isn't cheap, is there any reason to build it?
2. If we're willing to pay 12 cents/kWh for baseload power, would you preferentially pay it to coal?

Those may seem odd questions to ask, but follow me through the math.

Really?

The Electric Power Research Institute just released "The Power to Reduce CO2 Emissions" (PDF), its discussion paper to "provide stakeholders with a framework [to] develop a research, development, and demonstration (RD&D) Action Plan that will enable sustainable and substantial electricity sector CO2 emissions reductions over the coming decades."

It is crazy, mathematically bogus, economically disastrous, and generally inane ... but will reach an audience vastly larger than its rigor warrants.

First, a bit about EPRI. It is the research arm of the nation's regulated utilities. It has historically been funded by charges on electric bills, but with restructured markets, it's had to adapt its revenue model. Still, it has not strayed too far from its funding sources, and has been chronically unwilling to recommend any course of action that:

• would be contrary to the interests of regulated utilities, or
• requires anything other than massive technology R&D from which regulated utilities benefit.

That's all personal opinion, which readers may choose to ignore. Let's take a look at the facts -- what they recommend to control carbon. (I should note that they describe this path as "aggressive but feasible.")