Carbon offsets can bring energy efficiency to low-income Americans — Nashville data is promising

Under pressure from customers and investors, many U.S. companies have pledged to voluntarily reduce their climate impact. But that doesn’t necessarily mean they’re reducing their own greenhouse gas emissions.

Many companies instead pay other companies to reduce carbon emissions on their behalf through projects that generate carbon offsets.

There are reasons to be skeptical of this practice. Chief among them is that projects developed for carbon offsets have a history of occupying land in poor countries, displacing small farmers and threatening their livelihoods in the process. The quality of some globally traded voluntary offsets has also proven difficult to verify. For example, research on forest offset projects suggests that many are not as effective at sequestering carbon as they claim.

We believe there is a better solution. Companies can spend some of their carbon offset funds on climate-friendly projects that not only reduce emissions but also improve the lives of people in the U.S. communities where they operate. Sho.

Our team at Vanderbilt University’s Climate, Health, and Energy Equity Lab is starting with a pilot study locally in Nashville to explore the potential for companies to pay offset funds to improve the energy efficiency of low-income housing. I’ve been searching for. Efficiency upgrades save energy and money, and reduce your carbon footprint. At the same time, it reduces some of the many health risks that come with or are heightened by living in a home that is difficult to heat and cool properly.

Such upgrades can be financed by selling carbon offsets in the “social carbon” segment of the voluntary carbon market. The combined economic, health, and climate benefits of low-income energy upgrades make these projects attractive to companies looking to address climate change and gain positive visibility in their communities. It could become something.

Energy efficiency has benefits in many ways.

On average, low-income households in the United States spend 6% to 10% of their income on energy costs. Often, these renters and homeowners struggle to keep their aging, poorly insulated homes at a healthy temperature.

For some people, the cost of heating their home can become so high that they have to choose between heating or eating, which can have a negative impact on their physical and mental health.

Nashville considered implementing four main types of energy efficiency improvements in low-income housing. Together, they can reduce energy use and energy-related carbon emissions, while also earning offset credits in voluntary carbon markets.

We estimated the carbon footprint of home energy use over the home’s 25-year lifespan by combining window, refrigerator, and heating and cooling system upgrades with attic insulation for a two-bedroom rental home in Nashville. We calculated that we could save 592 tons. Upgrade.

If the carbon savings from Nashville home upgrades were packaged as carbon offsets and sold on the voluntary carbon market for $30 to $45 per ton, the money saved could pay for substantial energy efficiency upgrades. You can cover your expenses.

This pricing is consistent with prices determined by other carbon offsets that provide important and meaningful social benefits. It is also quite possible that local health benefits may be more attractive to some corporate buyers than carbon reduction itself. Offset trading is facilitated by non-profit organizations, social enterprises, or local governments.

Many of these upgrades are prohibitively expensive for low-income households without outside financial assistance. They also tend to be avoided by landlords because it is the tenant, not the landlord, who pays the utility bills.

Lessons from Maine and the Southeast

Carbon offset funds are already being mobilized for renewable energy and energy efficiency projects in the US

One of the early innovators was the Maine Housing Authority. The agency piloted selling carbon offsets to finance home energy efficiency improvements in the early 2000s and discovered how complex the process was.

Chevrolet purchased carbon credits from the Maine project for $750,000 in 2012, enabling efficiency improvements to approximately 170 homes. The project revealed several important lessons, including the need for large numbers of homes and high carbon prices to pay off the project.

A review of the program in 2012 found that each home can generate hundreds of dollars in carbon credits, but it takes time to launch the project, measure and verify the value, and sell these types of offsets before construction begins on the homes. It has been pointed out that it can cost tens of thousands of dollars. begins.

To lower that cost, our team member Maya Maciel Seidman has developed a method to quantify the carbon savings of home energy upgrades. She was able to save time and costs by using publicly available utility and government data combined with easily performed ground measurements.

Another challenge that this type of carbon offset, and offsets that support clean energy generation, may encounter is the issue of additionality. Without funding from carbon offsets, would low-income energy upgrades happen anyway?

We don’t think so. There are federal programs that fund energy efficiency improvements in low-income housing. However, the more than 40-year history of federal weatherization assistance programs and low-income home energy assistance programs suggests that the vast majority of eligible low-income households are not covered by these programs.

A solar power startup in the southeastern United States provides another example of carbon offsets bringing environmental and economic synergies closer to home.

Clearloop generates carbon offsets by building utility-scale solar farms in the dirtiest parts of the U.S. power grid, areas with little renewable energy and highly polluting power plants. Masu. The company finances its solar power development through the upfront sale of carbon offsets, which represent the emissions saved over the life of each solar power plant.

Both businesses and residents benefit

The use of carbon offsets is not a substitute for public policy and financing aimed at reducing emissions or eradicating energy poverty and energy insecurity. However, we believe that mobilizing voluntary carbon markets to finance energy efficiency improvements for low-income households can provide meaningful relief to many households.

Physical proximity to the companies supporting such projects should further increase transparency and accountability. When companies purchase locally generated carbon offsets and generate additional benefits for their host communities, they strengthen their social license to operate while advancing their commitment to tackling climate change.

This article is republished from The Conversation under a Creative Commons license. Read the original article.