Global Warming in the News

Companies that use lots of electricity pay a premium to offset the global warming they cause

By: John Murawski

At the Pepsi Bottling Ventures plant in Raleigh, machines fill thousands of soft drink containers each minute to the steady whir of conveyor belts.

Bottling all those fizzy drinks requires lots of power. And like a growing number of companies in the era of global warming, Pepsi Bottling has vowed to reduce its greenhouse-gas emissions. That creates a quandary.

So the Raleigh-based bottler recently announced that it will spend about $75,000 over three years to pay renewable energy producers to make clean electricity. The investment will help offset the power that Pepsi uses each year at its own facilities.

"Our consumers are younger people who have an interest in green initiatives," said George Suddath, Pepsi Bottling's vice president for corporate affairs. "We feel this could be the tie-breaker between us and our competition."

Paying extra for green energy for years was dismissed by many as a frivolous, tree-hugging throwaway. But with the emergence of climate change as a social concern, more companies are volunteering to pay a small premium for the privilege of claiming that they are offsetting their electricity use.

The contributors often receive nothing more for their financial good deeds than paper certificates and positive feelings. But by embracing the values of environment-conscious customers, the businesses can convert the green energy cause into a marketing strategy.

Skeptics say the increasing popularity of the renewable certificates could lead to exaggerated claims of environmental righteousness, particularly by corporations seeking to minimize poor environmental records.

"The term of art is 'green-washing,'" said Stephen Smith, executive director of the Southern Alliance for Clean Energy, who generally supports the certificates. "A company may do a fraction of a percent, and they'll run around and blow their horn to the world about it."

Sales of green power offsets are more than doubling each year and will reach 10 million megawatt hours this year in the U.S. Environmental Protection Agency's program. That's equivalent to the carbon dioxide emissions of more than 1 million passenger automobiles annually, the EPA reports. The agency tracks the bulk of the nation's certificate purchases.

Boosting solar, wind

The system of letting companies buy their way out of a carbon dioxide predicament is providing a valuable economic boost to fledgling solar, wind and other renewable producers that once struggled for public acceptance. The extra money from Pepsi and other corporations helps renewables compete with conventional electricity, which is generally less expensive to produce.

Major purchasers of renewable energy certificates run the gamut of nonprofit groups, government agencies, financial institutions, heavy industry and private individuals. In North Carolina, Lowe's Home Improvement and Duke University are two large participants.

Burt's Bees, the Morrisville maker of lip balms, lotions and other personal care products, is spending about $25,000 a year to offset greenhouse gas emissions.

The 300-employee company has a corporate goal of getting off the power grid and relying entirely on solar, wind and other forms of green energy by 2020. Toward that end, the company wants to accelerate the development of the renewables industry.

"We certainly have a reputation as an earth-friendly, natural personal-care company," said chief executive John Replogle. "You have to show credible proof that you're willing to take the giant leap forward."

Renewable energy certificates are typically independently audited by a third party, and many are tracked by the EPA.

Aside from their feel-good factor, the certificates have a quantifiable financial value. They can by purchased by electric utilities to help meet government renewable requirements, which are creating a national market for the certificates. Progress Energy and Duke Energy could soon be in that market as North Carolina enacts a bill requiring utilities to derive 12.5 percent of the electricity they generate from renewables and efficiency programs.

By design, most, if not all, of the renewable energy supported by the certificates is developed in other states and is not likely to be used by the certificate purchaser's facilities.

"That is the miracle of renewable energy certificates," said Blaine Collison, manager of EPA's Green Power Program in Washington. "They're making their existing energy green. They separate out the environmental benefit from the energy generation, so you can send the environmental benefit where the demand is."

What Pepsi's doing

At Pepsi Bottling Ventures, much of the electricity required to run the 350-employee operation in Raleigh comes from polluting power plants. The same goes for the electricity that powers the Pepsi bottler's 20 other facilities in five states. That makes Pepsi Bottling Ventures an unwitting contributor to global warming -- an untenable fact for a company trying to position itself as a national leader in the green movement.

This year, the company purchased three Toyota Prius cars for its sales fleet. It previously bought 85 Toyota Scions that get 37 miles a gallon to replace pickup trucks that got 22 miles a gallon. An expansion in Raleigh will include natural lighting to cut energy use, as well as an extensive water recycling program.

The bottler's investment in renewables certificates represents just 2 percent of the company's electricity bill. The Pepsi bottlers are buying the certificates as part of a broader effort led by soft drink giant PepsiCo, which owns 35 percent of the independent bottling franchises. Pepsi -- which this year helped sponsor the "Live Earth" concert series that was backed by former Vice President Al Gore -- plans to display seals on its packaging that will showcase the company's green investment.

"The concept is good," said Michael Shore, senior air policy analyst at N.C. Environmental Defense. "I could equate this to buying a hybrid car. You put a little extra into the car purchase with the hope that eventually the hybrid will become the standard out there."