Wednesday, March 07, 2007

The Political Economy of Alternative Energy

Let me just preface this piece with that I love Dr. Arnold Kling's insight and brilliance. But I was a little disappointed in his latest attack piece on Al Gore.
"Gore has had a consistent position of purchasing carbon offsets to offset the family's carbon footprint — a concept the right-wing fails to understand. Gore's office explains what Mr. Gore has asked is that every family calculate their carbon footprint and try to reduce it as much as possible. Once they have done so, he then advocates that they purchase offsets, as the Gore's do, to bring their footprint down to zero."
-- Denny Haldeman (scroll down to email responses to the op-ed)

Suppose that a friend of yours is trying to lose weight, and he tells you, "If I eat this salad, it will be good for me. So then I can have cake for dessert." What would you tell your friend?

Al Gore is trying to say that by investing in alternative forms of energy, he is "offsetting" the heavy use of conventional electricity for his home. This is like saying that eating salad entitles a dieter to enjoy cake for dessert.

Yes the desire to get to do bad things when you first deceive yourself by doing good is a natural human trait (or was it only taught by authoritarian parents?). And we will ignore the glaring question as to whether Al Gore has reduced his carbon footprint as much as possible. But Dr. Kling has failed to be the investigative reporter he should be.

First, our little thread at AlGore - Do as I say not as I do started the discussion off with a link to Gore isn't quite as green as he's led the world to believe.
But according to public records, there is no evidence that Gore has signed up to use green energy in either of his large residences. When contacted Wednesday, Gore's office confirmed as much but said the Gores were looking into making the switch at both homes. Talk about inconvenient truths.

And then a piece entitled Al Gore’s Personal Energy Use Is His Own “Inconvenient Truth”, which brings into question whether he is doing everything to reduce his demand for energy and more importantly carbon emitting energy. Next we see that This time, voting climate favors Al, which points out that: The snitch said fewer than 300 people requested the special ballot in the documentary category, which was won by Al Gore's "An inconvenient Truth" Sunday.

So when I came across the post entitled: The Profit of Doom I noticed the writer talking about purchasing stocks for carbon offsets. But from my prior research and reading a variety of articles, then purchasing any stock is not part of the scheme. To atone for your sins you are not suppose to benefit from your penance. So I tended to ignore the messages but did read the link to Group questions level of energy use at Gore home.
Gore's power bill shows, however, that the former vice president may be doing just that. Gore purchased 108 blocks of "green power" for each of the past three months, according to a summary of the bills. That's a total of $432 a month Gore paid extra for solar or other renewable energy sources.

Thus it sort of shot down some of the points in the above blog post. So I ignored the rest of the article including this portion:
"They, of course, also do the carbon emissions offset," she said.

That means figuring out how much carbon is emitted from home power use, and vehicle and plane travel, then paying for projects that will offset that with use of renewable energy, such as solar power.

Gore helped found Generation Investment Management, through which he and others pay for offsets. The firm invests the money in solar, wind and other projects that reduce energy consumption around the globe, she said.

Luckily, someone posted a link to Generation Investment Management and after looking at the site it was easy that this was no carbon offset plan but just a normal equity fund that invested in a variety of common stocks. But the real break came from finding the link to SEC Filing FORM TYPE:13F-HR. And what stocks are included in this portfolio?

A list of their holdings, and value in thousands:
AFLAC INC----------------13315
AQUANTIVE INC------------4615
AUTODESK INC-------------12712
BECTON DICKINSON & CO----13785
BLACKBAUD INC------------4765
GENERAL ELECTRIC CO------19565
GREENHILL & CO INC-------9473
JOHNSON CTLS INC---------13711
LABORATORY CORP AMER HLDGS-9935
METABOLIX INC------------5209
NORTHERN TR CORP---------14333
NUVEEN INVTS INC---------7389
STAPLES INC--------------11921
SYSCO CORP---------------11085
TECHNE CORP--------------22309
UBS AG-------------------14079
VCA ANTECH INC-----------4858
WATERS CORP--------------8875
WHOLE FOODS MKT INC------4427

So Staples qualifies for Carbon Offsets? And while I have not looked at all the companies, most do not have anything to do with renewable energy or solving global warming.

So a good scam when you can pull it off. We came up with the analogy that a Priest sins and for his penance he must tithe to the collection plate that he gets to skim off the excess.

Links:
Energy Fallacy

Gore isn't quite as green as he's led the world to believe

Al Gore’s Personal Energy Use Is His Own “Inconvenient Truth”

This time, voting climate favors Al

The Profit of Doom

Generation Team: Hon. Al Gore is Chairman

GENERATION INVESTMENT MANAGEMENT LLP-SEC Filing

Is Al Gore Really "Carbon Neutral"?

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