To Offset or Not

Sarah van Schagen at Gristmill has eased her guilt for flying to a music festival in Tennessee:

By the time you read this, I'll be at a comfortable cruising altitude -- and spewing CO2 into the atmosphere at an alarming rate. (Calm down ... I've offset the flight. Thanks, Native Energy!)

How exactly is this offsetting the carbon her plane will emit? Native Energy purchases Renewable Energy Credits (RECs) with the money you pay them--$8/mth for 10,000 kW-hr/yr. (That works out to 9.6 cents per kilowatt-hour, about 2 cents/kW-hr more than the green power offered by my power company Pacific Power.) In other words, they take your money and build windmills that produce electricity.

I don't really see the offset. van Schagen's plane is still emitting CO2 into the atmosphere. Someone else is going to be purchasing the wind energy Native Energy will be building. The RECs aren't cancelling any carbon that's been put into the atmosphere. In fact, the windmills will put a small amount of additional carbon into the atmosphere, in their manufacture and construction process.

You might argue that the windmills will eventually cause fossil fuel-burning power plants to go out of business. Key word is "eventually." Also, I not sure the economics work out. According to this DOE-sponsored page from Kentucky, electricity produced from coal is quite cheap: 4-5 cents/kW-hr. (Yes, there are externalized costs to the environment here which the power purchaser isn't paying. I don't know how to calculate those. I doubt anyone does.)

In the airplane case, I see no offset here whatsoever. Does the program only make sense if you are replacing fossil fuel-electricity with green-electricity? Am I missing something, or is this just a ploy?

UPDATE: OK, I'm starting to understand this better. I think the program makes most sense when you are replacing nongreen electricity with green electricity. But Native Energy's FAQ says

You can offset the "CO2 footprint" of your driving [or flying] or home heating by causing reductions in CO2 pollution somewhere else.

It still would be better not to fly and to purchase green power for your daily needs. But I've already written that "not flying" isn't really an acceptable answer.