The blogospheric snit over Whole Foods’ wind power cards

windpowercards.jpgWe’ve watched with both amazement and a certain amount of there-but-for-the-grace-of-god relief as the tempest over Whole Foods’ wind power cards blows across the blogosphere.

The controversy in a nutshell: Whole Foods recently began test-marketing “wind power cards,” which are basically renewable energy credits (RECs) in the form of a handy little plastic card available near the checkout line. The RECs themselves are provided by Renewable Choice Energy (RCE), a broker responsible for some other high-profile green power programs, including a partnership with the Vail ski resort.

The Whole Foods program caught the notice of blogger Steve Johnson, who roundly denounced it as a scam. His denouncement was then picked up and amplified a millionfold by Boing Boing, the most popular blog in the galaxy. From there, the debate ping-ponged back and forth across the internet, with all manner of green blogs weighing in on RECs in general and on the question in particular of whether selling RECs that look like stored-value cards is a deceptive marketing practice.

We have a particular fascination with this controversy for a perhaps obvious reason. Had Whole Foods approached TerraPass with the idea of developing a carbon offset card for distribution in their stores, the sound of high fives and popping champagne corks would have echoed across the bay. Without the benefit of hindsight, this idea seems like a great deal all around. Great for consumers, who benefit from the convenience; great for the environment, which benefits from both the emissions reductions and the heightened awareness of renewables; and great for the renewable energy vendor, who gains distribution to the dreamiest demographic imaginable.

It’s worth noting, although largely beside the point, that the criticisms leveled at the Whole Foods program are almost all entirely wrong on their face. The program is not, in actual fact, a scam. Of course, these debates aren’t won on their merits, and in an almost postmodern sense the customer truly is always right. If everyone agrees the product is a bad idea, then the product really is a bad idea, no matter how unfair the accusations.

What went wrong?

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adam

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  1. GeorgeF - November 13, 2006

    Blog-snit aside, it will be interesting to see how the cards do at the check out counter…can you put an offer like this in front of consumers and get some uptake? There’s a ton of desire to actually do something to support renewables and these cards are more direct support for renewables than anything else your going to be offered during your shopping day.

  2. disdaniel - November 13, 2006

    Those wind cards look like a neat present for the “guy that has everything” on my x-mas list(s). I’m glad you guys brought it up again, as I wasn’t trying to figure out what to buy just a couple weeks ago.

  3. Jake - November 13, 2006

    The issue I have, is this: who are they buying energy on behalf of? If I buy a card for $10, and they use that to buy $10 of electricity for the Red Cross (at no cost to the Red Cross), that’s awesome. If they sell these credits to GE for $10 and pocket the cash, then I would be wholeheartedly opposed. Any idea how the mechanics of this work? Terrapass is very straightforward that 2/3 goes to buying carbon credits and 1/3 you invest; that 1/3 represents potential profit for TerraPass, which is fine since the disclosure is clear. If I’m going to give money to a for-profit with no return (that 1/3 of the Terrapass cost), I want to at least know it’s going to a cause I strongly believe in.
    As noted in one of your articles, His overview of the company’s operation doesn’t really say specifically how many credits a card represents. In an interview, Rose told me that the reality behind the cards is complex and dynamic, therefore hard to represent with a single, stable set of figures.
    I think everyone should be suspicious. If they can’t simply explain how they are spending/ pocketing that $10, I don’t think they deserve anyone’s money.
    So here’s my proposal: introduce a program where consumers can be renewable energy on behalf of their favorite charities. This way, we know where the money is going. We can support renewable energy and our favorite charities at the same time. Take the 10-20% cut that’s needed to run the program, and I think you’d have a great program. Introduce it, and I’ll be your first customer.

  4. Adam Stein - November 14, 2006

    Hi Jake,
    I have a couple of important points to make, but let me start with this one:
    The quote you excerpt from the Worldchanging post is 100% wrong. I note this above when I refer to their “egregious misstatement.” Every Wind Power Card represents a very specific amount of energy credits. RCE does explain how they spend the money, and there’s nothing to be suspicious of. (You don’t have to like the program, but that doesn’t mean it’s shady.)
    OK, on to more substantive stuff.
    You ask, “Who are they buying energy on behalf of?” The answer is, nobody. Or to put this more precisely: no energy is being bought.
    When you buy a Wind Power Card or any purchase from any green power program, you’re actually buying a Renewable Energy Certificate (REC). This certificate represents the environmental benefit from the renewable energy, but doesn’t represent the energy itself. Your purchase helps to sponsor the operations of the renewable energy source (in this case, a wind farm), but you’re not actually covering anyone’s utility bill.
    This stuff is extremely abstract and confusing, so let me try an analogy. If you donate to public radio, you’re not paying money so that some specific person (yourself or otherwise) can listen to NPR. You’re just giving money to the radio station to ensure they can stay on the air. It’s kind of the same with renewable energy credits. (This is actually a pretty bad analogy on several levels, but the high-level concept is roughly right…)
    For the sake of accuracy, I also should note that TerraPass’ business model is quite different than you suppose. 100% of the projects we fund (not just 2/3) result in quantifiable carbon reductions. We don’t “invest” any money at all.
    We’re a retailer, plain and simple. We buy offsets wholesale and sell them to our customers with enough margin to keep the lights on in the office.
    Hope this helps.

  5. Jake - November 14, 2006

    Thank you for your thoughtful response. I suppose part of the problem is the complexity of it all. I completely understand the concept behind carbon markets (I think)– if you produce 100 kWh of energy with zero carbon emissions, you’ve generated carbon credits that you can sell for to industries that are carbon emitters. Is that about right? I believe some organizations just buy carbon credits for the sake of retiring them and reducing that amount of carbon. Whether they sell to carbon retirers or polluters, the clean energy providers get cash in pocket and it allows them to sell electricity more competitively. This by itself is not simple to explain.
    At the other end of the spectrum, my suggestion would work like this– I buy a wind energy card that’s good for the purchase of $10 of clean energy. I would then donate this card to a charitable organization, such as the American Red Cross, that they could then use to buy clean energy at the going rate. I know it’s still a little fuzzy since electricity comes from everywhere, but folks buying the cards and donating them would know exactly what they were doing. While most of the donation will be realized by the charity, there would also be a substantial benefit to clean energy companies by increasing the demand for their products.
    Finally, we have the RCE wind cards. I still don’t quite grasp how they work, and their patronizing explanation doesn’t help at all for someone who really wants to understand. Are they just paying an extra $0.02/kWh to companies that produce wind power? Do they invest in new products? I just don’t get it.
    And a lot of people don’t. The fact that many concerned, involved environmentalists think this is a scam (I’m not saying I agree with that) shows that there is a big problem with customer acceptance. Until at least the early adopters understand this, it won’t catch on. It really reminds of the “The Tipping Point,” it’s a really good idea, but if the mavens, early adopters & salesman don’t believe in the product, it seems very unlikely to get a mass following. I think you guys do a tremendous job in pushing the topic. I think if RCE could better explain their product (in simple, non-condescending terms), they may have an opportunity to make it a huge success.

  6. Brandon - November 15, 2006

    Jake,
    The concept kinda goes like this. At the checkout counter at my local grocer, I can purchase a card for $5, $10, or $15 for a donation to my local food depository. I see no direct benefit. I can’t give the card to someone who can then go get something. It’s a donation wrapped up in a consumer-friendly package.
    This is the same thing. You buy an $X valued card, and your donating $X into the wind farm industry to help it out.
    The problem with people thinking it’s a “scam” isn’t due to how it was marketed, but was caused by alarmists not doing their research, not investigating at all, and then yelling at the top of their lungs on their blogs false information. I’m sure had they acted intelligently and researched the product before going off on their tangents, nothing would have come from this except a small boost to the wind-based renewable energy industry.

  7. cathy - November 15, 2006

    I think of money given to TerraPass or Wind Power cards as money that will be invested in the green power industry somehow. I won’t get any specific return on it, but the planet will. Am I wrong? I guess I’m not clear on who gets the monetary return on that investment, but if I buy a card anonymously, it’s clearly not me. Can someone clarify?

  8. Patrice - November 15, 2006

    Hi Jake,
    It’s simple. You pay 10$ and they give it to enterprises that produces for example wind towers. That helps them being more competitive against coal power plants (that are still much cheaper to operate than wind farms).
    They can also give that money to research teams they know might invent more efficient ways to produce wind electricity. In the long term, we wanna beat coal and oil but it takes money to do that.
    The green energy industry is very poor compared to the oil energy industry. It’s a donation to a lobby that greatly needs it (they just announced that in Texas they want to build lots of new coal power plants(!). So, we urgently raise our money against the money of some coal lobbyists…
    Do I want to subsidize cleaner energy? Absolutely! It’s even more pacific than protestations. AC/DC said it: Money talks!!
    Patrice

  9. John - November 15, 2006

    Think of these cards as the same thing as your grocery store saying “Would you like to donate $1 to insert-charity-here?” when you go to pay for your groceries.
    They tack on $1 to your bill, you pay it, and you hope that they actually give that $1 to the charity.
    Personally, I think these cards are pretty whack…they don’t make any sense at all. I get that you’re giving the money to the wind power industry. Cool. But why go to all the fuss of producing and selling the card? What’s the environmental impact of selling plastic cards to benefit windpower? Are the cards made from petroleum? Seems kinda silly.
    What Whole Foods should have done (and I realize this is with hindsight) is offered a discount on future Whole Foods purchases for each card. Buy a $10 Wind Power card, get $1 off a future Whole Foods purchase. Or 10% off, or something.
    In other words, give the cards a tangible benefit. Giving me a card for the sake of giving me a card is lame. Terrapass works because I get a tangible benefit, the offset. These cards need a tangible benefit, then they might make sense.
    And, if they aren’t already, they need to be made with something friendly and recyclable, like some sort of corn or soybean material, not a petroleum-based plastic.

  10. megan - November 15, 2006

    thanks for doing your homework Adam. while the marketing of these cards lacked a wee bit of foresight, my first impression was “wow, cool, what an easy, low-stress way to DO something.” i think so many of us are not as involved in the mechanics of creating a greener world, but indeed care and are slowly awakening to some of these issues. i publish a new magazine on what we call ‘practical’ sustainability for a large metropolitan region. we don’t all chop wood and carry water here in the city or the burbs necessarily, but many of us want to participate in learning and furthering the cause of our planet’s health in whatever way we can. while mass marketing concepts aren’t always appealing to the established green-minded, i believe there are overall benefits. my personal belief is that there are folks that are just opposed to whole foods as a mass marketer in general and are always looking for things to point to to prove this point.

  11. Larry Grob - November 15, 2006

    Adam et al:

    I can’t fault Whole Foods for ‘packaging’ their program in the form of cards. They’re graphically interesting, offer a perceived value to the customer, and will hang around for a bit of time as a reminder…before they’re recycled. But what initiatives like this lack is the kind of simple yet informative education that wraps around the program at point of purchase. This could be handled in any number of ways and would reinforce the principle of doing good–at least to the extent that efforts of the intentionally or otherwise misinformed (be they bloggers or mainline media) could be more easily resisted.

    I’d also like to point out that from a consumer’s point of view, getting involved through a Whole Foods ‘endorsed’ wind power program is a much easier sell than asking them to sort through the numerous and varied other such programs out there…for now, at least.

    Thanks for your posts attempting to clarify all this.

    Larry Grob
    theunlikelyactivist.com

  12. Missy - November 15, 2006

    Personally I think that these cards are a great idea for getting interest up… good or bad press aside, people are talking about it and wondering, what really are RECs? Whether it is a card in a grocery store which you are buying, or you take the time (more than the few seconds to pick it up at the check out line) and call an REC “broker” to determine the amount you would like to invest in supporting green power, lets face it… the only thing you get out of it is either a paper certificate and a few bumper stickers maybe or a card, basically in some senses a receipt for what you spent. If you want to get into energy spent game.. if you buy RECs from any broker, they are going to produce that certificate, print it, put it in the mail, alone, for its trip maybe cross country to your mailbox. Isnt a bundle of cards delivered concurrently possibly not that bad?

    The point of RECs is to raise awareness and level the playing field for those who are taking the extra step and investing in producing clean energy. I believe these cards will appeal to the market which would buy them , however it seems someone needs to come up with a great, clear, concise and quick explanation for RECs. If they want to spin it as chairty, then look at it that way but in some way the consumer is supporting the advancement of clean enegy.

  13. Gregg Hale - November 15, 2006

    I think it’s easily explainable: Whole Foods has become very big and very successful. Size and success make one a target. No matter what you do.

  14. Patrick - November 15, 2006

    Adam,
    Thank you so much for making a very hazy topic quite clear. By purchasing those RECs, you’re simply making a donation to the renewable energy industry, plain and simple. Sure, there’s no tangible benefit — yet. But the people who buy those RECs aren’t looking for here-and-now rewards…they’re behaving proactively in the hopes of influencing a bright green future. Hats off to them.

  15. Ainslie - November 15, 2006

    I really like John’s idea that Whole Foods could match their customers’ investment in renewable energy by making the cards good for a discount on a future purchase.
    Adam, if you wish that Whole Foods had approached TerraPass…..why don’t you approach WalMart…???

  16. drew - November 15, 2006

    I agree with Adam’s points, but must go further to say that I am really disheartened by the need for such a lengthy and reasoned post. I consider this flap a ridiculous “how many angels fit on a pinhead” type of thing. It is my opinion that it is driven by the fact that a lot of my fellow well-meaning environmentalists and climate activists are so under other larger political philosophies that cause them to also be anti-free market. And– Since there are accusations of REC being “shady” and lacking transparency in policies I point out that the anti-free market people usually dance around that issue and rarely just come out and say it.
    Rapid expansion of clean energy technology AND USAGE as well as GHG reductions, all on revolutionary scales, are the only things that are going to save our one climate system that we need to live. Our generation is among the first to suffer major death and loss because of the effects of climate change and we haven’t seen anything yet.
    I do not care so much how this energy switch happens as I do that it does happen and fast. I certainly do not care if people get rich innovatively fueling that transition. They deserve to and I cheer them on. They are part of the solution. There is absolutely nothing wrong with being wealthy. There are just as many bad people in the unemployment line as there are in the country club. “Profit” does not equal “exploitation” and it doesn’t enable exploitation any more than it does good works.
    If one buys that we need change on a revolutionary scale, but has a problem with people getting rich promoting alternative energy, I challenge him/her to look back through history and find one successful, enduring social (or even political) revolution that did not have two things 1)educated supporters 2)SIGNIFICANT FINANCE.
    BTW- I didn’t see where anyone bothered to point out that producing a credit globe or cube would more than likely be more carbon/materials intensive to make, pack and ship than a card. That’s how far past the point this discussion has gotten. In many parts it isn’t even about clean energy anymore.
    Lee Raymond and his pals are laughing at our dischord as we argue about the deck chairs on the Titanic.

  17. John - November 15, 2006

    This is a fantastic idea – the article above casts it perfectly when it refers to tapping a “dreamy demographic”. Think about the demographic at WholeFoods – at least every Whole Foods I’ve ever been to, which is several in eastern MI, and a large number on the East Coast through my business travels – suffice it to say, you are dealing with a typically more “monied” demographic than regularly shops your local retail grocery chain. This wind credit “product” if you will, is packaged perfectly to tap into this “Dreamy Demographic” in just the format they can recognize and utilize in a fashion familiar to them. Example: Soccer mom enters the checkout line with new baby in tow, does a quick scan of the grocery list to make sure she didn’t forget anything, looks up and then – “Oh look at that, I should zero-out our carbon emissions for the month, wow that’s nifty.” WholeFoods could not have hit the nail on the head better – any marksman would be proud to have hit their target this well. Furthermore it gets this issue home in the grocery bag where folks can then look over it in more detail away from the bustle of the store and the kid pulling on mommy’s arm for a popsicle. Maybe they even go online later in the day to research things further – because a flag was waived in front of their face and a door was opened to reach them there is maybe one more better informed consumer who may now do a little more for the environment. Note the term “better informed” – which is far more than the people deriding this concept bothered to do prior to launching a damaging smear campaign. Perhaps WholeFoods could benefit better from the amount of energy put into blog-protest over this if it were directed at them as suggestions for improvement? Goodness gracious, WholeFoods and REC are no Enron, their hearts are at least in the right place I think….Enron and its Execs didn’t have one to begin with.

  18. Wendy - November 15, 2006

    Several months ago, I began subscribing to RCE on a monthly basis, purchasing a set amount of wind power credits which theoretically matched my household’s consumption of electricity. I learned of RCE through a Whole Foods promotion. I signed up for $15.00 per month to be charged to my credit card and, in exchange, Whole Foods sent me a $50.00 cash card for use in its stores. I love the program–no plastic cards, just one certificate acknowledging my committment. I haven’t seen the new cards, but I wonder if there is any information on them about how to create a permanent subscription like mine.

  19. Keith - November 15, 2006

    Drew. Thanks for your comment. I totally agree. If you don’t like the card, then don’t buy it. It’s as simple as that.

    I am a bit concerned with the fact that plastic cards (which don’t, themselves, have any purpose) are being produced. I would have liked to have seen a re-usable card. For example, you give the card to the cashier and he/she rings it up. You now have made the donation, and then the card is “revalued” for the next customer. Instead, without actually seeing the cards and how they work, it seems as though the cards go into your bag and you go home and throw it out. Granted, this is better than a larger, more resource intensive, cube or what not.

    Even as we attempt to solve one environmental problem, another crops up because of the solution. I think, as a culture, we need to adjust our habits. But I digress…

  20. Greg - November 15, 2006

    Let me see if I understand this. I’m not familiar with RECs generally, but have been trying to sort this out, including how it differs from TerraPass. My preliminary conclusion is that this may be just too complicated & beyond the understanding of most consumers to be something that can be sold in a clear & non-misleading way in plastic cards at Whole Foods…

    Adam Stein writes:

    “When you buy a Wind Power Card or any purchase from any green power program, you’re actually buying a Renewable Energy Certificate (REC). This certificate represents the environmental benefit from the renewable energy, but doesn’t represent the energy itself. Your purchase helps to sponsor the operations of the renewable energy source (in this case, a wind farm), but you’re not actually covering anyone’s utility bill.”

    Together with the analogy to public radio, what this suggests to me is that the REC purchases effectively subsidize the low-/no-carbon energy producers like wind farms — i.e., that the wind farms being “sponsored” are not profitable by just selling the energy they produce, even though they charge users higher prices than conventional energy producers do. “Buying” the environmental benefit (the REC) helps ensure that the wind farms stay in business. Put another way, buying the card and the REC pays the wind farm (after Whole Foods & RCE take their cut) to cover the difference between its cost to produce a kWh and how much it can make selling that kWh to the grid — i.e., it’s how much the benefit of that clean kWh costs to produce. RCE can say that that’s not a donation, but it is a subsidy, as I see it.

    Another useful analogy might be product(RED), the products that Gap, Motorola & others are selling that are priced higher than ordinary products, but where part (not all!) of the profits go to the UN Global Fund on AIDS, TB & Malaria. In the case of the product(RED) products, you pay one price, but get two things: the product, and the social benefit. With the RCE cards, you’re effectively paying separately for the product (energy, which you pay for when you pay your electric bill) and the environmental benefit (supposedly “cleaning up” the energy you buy from the grid by “replacing” it with wind power). In the RCE case, the product & the benefit are obviously much more closely linked than in the product(RED) example.

    Product(RED) is a closer analogy to the RCE model than public radio donations in one big way: Product(RED) involves for-profit companies, and they are not claiming that all profits from their products are going to the social cause. In that way, product(RED) is somewhere in between public radio and RCE — for-profit companies making money but also raising money for a public/non-profit cause. Unlike both public radio and product(RED), everyone in this REC chain — the wind investors, the resellers/brokers like RCE, Whole Foods — is for-profit, even if there is also a public benefit. I really doubt that if the buyers of the RCE cards understood that they were subsidizing for-profit ventures, they would be as willing to buy them.

    I still haven’t answered my original question of how all this differs from TerraPass. Maybe the answer is that it doesn’t much.

  21. Woody - November 15, 2006

    It’s pretty obvious that the basic problem is that REC’s & carbon trading are not yet widely understood. Society is still in the first part of the learning curve. These concepts will have to take a number of hits before they achieve widespread acceptance. Not unlike the gains made by the civil rights movement in the South. More to be done on both topics. Just keep moving forward; keep talking the talk & walking the walk. The more quickly we move along the curve, the better!

  22. disdaniel - November 15, 2006

    Greg said “the wind farms being “sponsored” are not profitable by just selling the energy they produce, even though they charge users higher prices than conventional energy producers do.”
    I have a couple problems with Greg’s statement. First wind farms can be and often are profitable right now. Still, in order to attract enough capital to build enough wind mills fast enough to prevent an even worse climate catastrophe, investors demand better returns.
    Second in a normal market, a wind farm can’t charge users prices that are higher than conventional energy producers charge for their electricity. Because of regulations many energy markets are not “normal” but the principles of supply and demand still hold.
    Yet there is still an extra “value” a wind farm creates from producing energy in a way that minimizes harm to the environment and the people in it (if one is unable to see this extra value, then one might view these cards as simple charity). It is this extra “value” that Renewable Energy Certificates (RECs) are designed to capture so concerned citizens/corporations can “feel good” about minimizing harm to the environment.
    The RECs serve to both boost returns for investors in wind farms (by monitizing the extra value) and allow consumers (who let’s face it can’t choose the types of generators their utilities invest in) to buy energy from the cleanest sources available.

  23. disdaniel - November 15, 2006

    oops in the last line I meant to say “and allow consumers (…) to effectively buy energy from the cleanest sources available.
    Obviously the cards don’t supply energy, just the “feel good” attributes.

  24. anne - November 15, 2006

    This is one of the awesome side-benefits of being a terrpass member…articulate, well-reasoned email addressing what’s going on in the world. A good lesson for both terrapass and whole foods. Keep up the good work.

    By the way, I think the plastic card was confusing…it only makes sense if you already know what RECs are. And, a plastic card itself isn’t exactly green. They should sell little pins or a seed packet or something with an inherent value, however small.

  25. Adam Stein - November 15, 2006

    Greg —
    Those are all potentially useful analogies. The only problem with them (and this is the same problem with my original public radio analogy), is that a REC purchase isn’t technically the same thing as a donation. A REC is created when a megawatt-hour of renewable energy is produced, and there is a fixed supply of them. They also have a firm market value. When TerraPass buys RECs, we literally own them.
    This is very different in practical terms than a donation, although I recognize that the spirit in which consumers buy RECs is very much that of donation to a cause they believe in. As you probably saw, the Grist post on this topic got very hung up in a semantic debate over purchases vs. donations. I’m sympathetic to both sides.
    In answer to your question, this is very similar to what TerraPass does. 1/3 of our carbon reduction purchases are in the form of wind RECs, and 2/3 are in the form of carbon offsets from dairy methane digesters and landfill gas flaring. I can’t resist pointing out that we’re also a considerably better value than the Whole Foods cards, on a per ton basis.
    TerraPass is up-front about our for-profit status, and I don’t agree that this is a problem for most consumers. As you note, the entire clean energy supply chain is profit-oriented, and this is as it should be if it is ever to hold its own against fossil fuels. I think most people care about whether their money is being put to good use, not the tax status of the organization that receives the funds. Making money allows us to further pursue our mission of promoting climate change reduction strategies.

  26. Woody - November 15, 2006

    I think the plastic card is a small environmental cost compared to achieving the main goal. A token thing to take with you which might elicit later positive conversation on the subject. Making the card an actual refrigerator magnet is not a bad idea for the same reason. It could be optional as to whether to take the card/magnet as well. Education occurs when someone in your kitchen sees the magnet & asks about it.

    John’s approach (“Think of these cards as the same thing as your grocery store saying “Would you like to donate $1 to insert-charity-here?” when you go to pay for your groceries.”) is not without merit, either. Just pay the $$ & have the transaction printed out on the register receipt. But that uses more register tape, electrical power, etc. No free lunch. Just keep on keeping on.

  27. Eric Olson - November 15, 2006

    Hi,
    I have been marketing rec’s here in the Boston area for about 1 year now and here’s my sales pitch:
    Many people are willing to pay a bit more for products that are either better for us or gentler on the environment or kinder for the people making them or all of the above. Consider recycled paper, Fair Trade coffee, organic milk, and Forest Stewardship Council lumber and plywood. Those products come in discrete units that can be sold separately from their less sustainable versions. In contrast, you cannot just call the utility and ask for wind power electrons to be sent your way — the grid delivers those electrons all jumbled together, from coal and natural gas and uranium energy sources. So how can people reward those entities that produce clean and sustainable power? For that we have renewable energy credits. In sum, you can’t buy electrons like you can a pound of coffee beans, so to favor social change in this realm you have got to make a kind of “parallel” payment. That’s just the way it is.
    Cheers,
    Eric

  28. Jake - November 15, 2006

    Here’s a challenge. How do you convince people to RCE cards in 3 sentences or less without imploring the target to “just trust us?”

  29. Teague - November 15, 2006

    TerraPass sells carbon offsets that reduce emissions by roughly the same amount that you caused them to increase by driving, flying, etc. I think a big cause of the blog freakout about these Whole Foods renewable credits is that being able to buy any random amount is that extra conceptual step that makes it just a bit too abstract for many folks. The TerraPass approach gives people a small additional crutch of tangibility that is very helpful when working with something as conceptually tricky as this…so I think it’s a good strategy.
    BTW, Eric, I think your explanation works pretty well.

  30. tommy - November 15, 2006

    Adam,
    Nicely done article.
    tg

  31. Angela Miller - November 16, 2006

    Hi-
    Thanks so much for the post. Given that my closest Whole Foods is 40 miles away, I was happy to be exposed to this new program. In fact, went to their website and purchased two cards for my familly today. Maybe at the end of the day, that’s all a post like this needs to accomplish: more people taking small actions that result collectively in positive progress.
    Angela

  32. Nicole Seibert - November 17, 2006

    In essence, by buying a REC you are becoming a investor of a product in which you will see no return on? You are investing in a startup sector of the energy market with no ROI.

  33. Adam Stein - November 17, 2006

    Nicole, RECs are not investments. An investment is when you buy an equity stake in a company. You own shares, you receive a percentage of profit, you have stakeholder rights. There are plenty of ways to invest in energy, but RECs are not one of them.
    Jake, I like the idea of your challenge, particularly because it would make my life a lot easier at cocktail parties. (“What do you do?” “I sell carbon offsets.” Awkward silence.)
    But I’m not sure it’s possible, because carbon offsets are too new. These days you wouldn’t have much trouble describing what in iPod is in two words (“mp3 player”), but you would have had a much harder time in 1999.
    I think there are a number of good descriptions of carbon offsets and RECs in this comments thread. When asked, I usually say somethink like:
    “TerraPass is a way for individuals who are concerned about global warming to balance out their own impact by funding reductions in greenhouse emissions. By funding projects such as wind farms, you can bring about verified reductions in greenhouse gas emissions that match your own impact from driving, flying, and electricity use.”
    This is then usually the start of a long conversation…

  34. jennifer - November 17, 2006

    I don’t understand why there has to be a plastic card at all.
    If it’s about the environment – shouldn’t we be thinking of reducing waste in with all of this? I’d rather just give Terra Pass or Whole Foods or whoever I can go through my donation. If anything I’d rather receive a printed receipt on some recycled paper than a plastic card that creates air pollution when it is produced and is just one more thing to throw away later on when the novelty has worn off.
    Oh course I forget… I live in a consumer society… if we donate to some great cause we also have learned to expect a kickback… some little trinket or token of our goodwill… how about a roll of recycled and compostable toilet paper? Perhaps that would cost less to produce than the plastic cards. :)

  35. Fred - November 18, 2006

    your argument that “You can’t actually do anything with them once you buy them. (Well, technically you can stick them on your fridge.)” doesnt seem to make sense considering that the same could be said of the TerraPass, which although (in my opinion) it is a great and worthwhile product. Once you buy a terra pass you cant do anything but put it on your car or fridge either. i still think that both the REC’s and TerraPasses are worth buying for the sake of benefitting the environment, but maybe whole foods should have done a better job of educating people about these rec’s by giving people pamphlets on them when they were sold, or possibly by a national ad campaign stressing their commitment to the environment

  36. Adam Stein - November 18, 2006

    Fred —
    I totally agree. My only point in mentioning that you can’t “do anything” with the cards was to examine the issue of whether something that looks like a stored-value card but isn’t actually a stored-value card is deceptive. As you can gather, my basic answer to this question is no.
    – Adam

  37. Dave D - November 21, 2006

    I love the idea of this program. I liken it to what many humanitarian relief organizations are doing areound Christmas time. During the holidays, my family is starting a new tradition. Instead of exchanging material gifts, which we do not need or even really want, we can choose a “gift” from a catalog that comes from the Mercy Corps or Heffer International. Maybe we pitch in and ‘buy’ a clean water well for a village in Africa. Maybe my wife buys a set of new clothes and school supplies for a young girl. My point is that these organizations have recognized that by providing the option of ‘giving’ something that is tangible, we can participate in the consumer impulses of our culture while trying to break the cycle. I see the ‘benefit’ of these cards as similar.
    I do, however, like Jake’s ideas of a card that ‘buys’ clean energy for your favorite charity, as an even neater idea. It just ratchets that ‘tangible’ quality up one notch further.
    –Dave D
    Portland, OR

  38. Bryan - November 22, 2006

    While I think there is great social value in the cards and the concept, the issue of RECs will remain an abstraction for many people who are not concerned with such social values. To reach them, I think the concept needs to be expressed in terms of the market. Here’s my attempt to look at it from a market perspective (and it will not doubt expose my ignorance if I get it wrong):

    At any given time, there is a finite amount of renewable energy being generated; therefore, there are a finite amount of RECs. There are companies and individuals interested in reducing their carbon footprint for altruistic reasons. There are also energy consumers that need a certain amount of renewable energy or RECs to satisfy their obligations under renewable portfolio standards (RPS) like New York State has.

    The more RECs that are purchased, the fewer there are available for energy users to meet their RPS obligations. As RECs are retired, it creates more incentive for energy companies to invest in renewable energy projects in order to generate more RECs to satisfy the market.

    To look at it another way, your purchase of a REC means that some CO2-belching smokestack industry can’t get their hands on it. It forces industry to look elsewhere for their RECs or take other steps to reduce their carbon footprint (conservation, increased efficiency, etc). This process creates the incentive for the development of new renewable sources. Forgive the use of the simplistic, inflammatory rhetoric, but I think it helps to make the point.

    I think the explanation of the value of RECs needs to be changed from a focus on “subsidizing” or “donating” to existing rewewable energy resources (as right or wrong as those concepts may be) to a focus on the incentive REC purchases create for the development of new resources.

    Do I have this right?

  39. Geoffrey Day - November 30, 2006

    Here’s the link to the REC offer at Wholefoods.
    http://www.renewablechoice.com/wholefoods/

  40. Lynne - July 9, 2007

    [Ed. — Sorry, close, but didn’t make the cut. Substantive comments sprinkled liberally with insults are still insults. Please try again.]

  41. Christian - March 26, 2008

    I am one of a few in Canada who is even talking about selling RECs, and I would like to offer another view on the effect of purchasing RECs through Whole Foods, RCE, Terrapass, or other.
    If every electricity purchaser in North America bought RECs to offset or upgrade their purchases to green power, the entire grid would be windpowered. No nuclear, no coal, just wind. Obviously, this is not a scam.
    This, of course, makes the assumption that there is enough wind power to do this and that 100% of consumers would do this. In reality, you will always have walmart shoppers who are not interested in higher value products, so RECs will remain a niche product for higher needs consumers.
    If you are looking for more value in your energy purchases, RECs can satisfy this.