By Nick Sibilla
Fox News is greener than Starbucks.
Surprised? You should be. According to the newly published Corporate Renewable Energy Index, News Corporation, the parent company of Fox News, is actually the 8th highest corporate consumer of green power. Starbucks, on the other hand, is only 14th. How is this possible? Welcome to the topsy-turvy world of renewable energy credits.
These credits—also known as RECs—are created every time one megawatt-hour (MWh) of renewable energy is generated. RECs are sold separately from green power and represent the intangible, environmental benefits of renewable energy. But by purchasing RECs, corporations can still claim they are financing clean energy. In fact, in 2010, over 70% of all corporate RE purchases was through RECs.
Yet RECs are a waste of money for two major reasons. First, the average price of a REC is around $1 per MWh. But according to BusinessWeek, the actual cost of clean energy can range anywhere from $40 to over $90 per MWh!
Second, RECs do nothing to combat climate change. The EPA even admits that buying RECs does not lower greenhouses gas emissions! These credits are the ultimate greenwash.
Investors and environmentalists should be skeptical any time a corporation claims to be going green. In short, RECs are a complete wreck.
Nick Sibilla is a research associate at Cascade Policy Institute, Oregon’s free market public policy research organization.
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