I think it is fair to say that the whole impetus for the covenants of redemption, works and grace in the Reformed Confessions stems from the assumption that the Old Testament must be read through the lens of the extra light of the New. If that assumption is flawed, as I believe it certainly is, then the whole project is in serious trouble.
The release of the Westminster Confession of 1647, although it was preceded by over a century of formative thinking about the covenant, stands out as the principal document of what is known as Covenant Theology. Covenant is employed as a fillip to understand and arrange the “doctrines of grace”, and is central to the Confession’s portrayal of redemption. This means that the concept takes on a deliberate soteriological hue. The WCF treats its concept of covenant as principally a gracious relationship; a condescension. And there is no doubt that in this it is correct. The Westminster Divines did not lay stress on a pre-creational ‘covenant of redemption’, although their anticipatory language of salvation for the elect in the ‘covenant of grace’ is in tune with it, and it is there in WCF 7:3.
Biblical Covenantalism is centered around the twin concepts of God’s words and God’s covenants. To repeat what has already been stated, the present work calls attention to the relationship between God’s words (therefore thoughts) and His actions, and relates them to the covenant commitments which God makes in the Bible. The motif of God’s words = God’s actions (the GWGA motif), segues into the covenants which He has made in that these covenants are an amplification of God’s promissory words to those to whom He commits. Whatever else covenants are, they function as reinforcements of speech. Thus, when a man marries a woman he does not only say words of promise to her on their wedding day, he enters into a committed relationship of promise with his bride. The presence of a covenant amplifies and underlines the word of promise and binds them together. It is the same with the covenant God. This “binding of God” in covenantal obligation has to be carefully studied and traced out in Scripture. It is not, please note, a theological “binding” first. That is, we are not to deduce that God has covenanted with X because we have arrived at certain theological convictions. Rather, the only way we know that and how and with whom God has entered into covenant is through the clear testimony of God Himself.
To set out this difference more plainly, let us think of the “covenant of grace” of covenant theology. In Reformed theology this covenant of grace has specific content.
The “Covenant of Grace”, which is often simply called “the covenant” by CT’s, wields tremendous, we might say decisive hermeneutical power over CT’s biblical interpretation. But before one gets to use such a potent hermeneutical and theological device, one needs to prove that it is actually Scriptural.
As Herman Witsius defines it,
The Covenant of grace is a compact or agreement between God and the elect sinner; God on his part declaring his free good-will concerning eternal salvation, and everything relative thereto, freely to be given to those in covenant by, and for the mediator Christ; and man on his part consenting to that good-will by a sincere faith.
Witsius goes on to make it clear that the covenant insures that there is only one people of God, the Church, in both Testaments. This means, for one thing, that whenever one comes across any passage which seems to point to a separation of, say, OT Israel from the NT Church, this must not be allowed to stand, since the “covenant of grace” will not permit it to stand. Therefore, CT’s must first demonstrate if it is possible to establish a “Covenant of Grace” from the text of Scripture rather than from human reason, and then they must show that this covenant is the very same covenant as the Noahic, Abrahamic, Davidic, and New Covenants, which are very clearly found within the Bible.
So what is the exegetical basis for the Covenant of Grace? Well, don’t hold your breath! Even dyed-in-the-wool Covenant theologians like O. Palmer Robertson admit that there is slender exegetical apparatus from which to derive it (he thinks the “covenant of works” fairs better, expending much effort on making Hosea 6:7 refer to a pre-Fall covenant). In reality I would say there is no exegetical justification at all!
Reformed theologian Robert Reymond, who boldly claims that “The church of Jesus Christ is the present-day expression of the one people of God whose roots go back to Abraham”, does no better in coming up with actual biblical texts which support this extra-biblical covenant. He, like all CT’s, insists the issue be settled by the Scriptures, but he begs leave to spiritualize the texts whenever it suits. Reymond also insists that the OT be interpreted via (his interpretation of) the NT. In having things this way he can still maintain that the land promises “were never primary and central to the covenant intention”. Quite how one can read Genesis 12-17 and come away believing that the land was not a primary issue escapes me.
Following the reasoning of CT’s as they dive in and out of selective passages, often avoiding the specific referents within the context ( E.g. land, Canaan, Jerusalem, mountains of Israel, Judah, etc.), can be a mind-numbing experience. One needs to try to keep in mind what they are attempting to prove: that God has made one covenant with the elect of both Testaments to guarantee that there will be one people of God, inheriting heavenly promises in Christ. For example, Robertson says,
The covenants of God are one. The recurring summation of the essence of the covenant testifies to this fact… All the dealings of God with man since the fall must be seen as possessing a basic unity…Diversity indeed exists in the various administrations of God’s covenants. This diversity enriches the wonder of God’s plan for his people. But the diversity ultimately merges inti a single purpose overarching the ages...The various administrations of the covenant of redemption [i.e. grace] relate organically to one another…
That may sound okay, but what one has to realize is that this means that anything found in the biblical covenants which does not fit this preconceived picture (e.g. a physical land for the people of Israel, a literal throne of David in Jerusalem), is demoted to an ancillary and temporal place or is transformed into a “type” or “shadow” of a spiritual reality which comports with the requirements of “the covenant.”
 See Peter Golding, Covenant Theology, 15. This is an excellent historical account.
 Ibid., 60. Although the ‘covenant of works’ is not redemptive because it deals with man in his innocence, it nevertheless puts forth “life” as something to be achieved or forfeited dependent upon man’s observance of God’s “law”. See WCF 7:2 & 19:1
 See especially the Westminster Longer Catechism 31.
 Herman Witsius, The Economy of the Covenants Between God and Man, 1.165 [Bk. 2. Ch.1.5].
 Robert L. Reymond, A New Systematic Theology of the Christian Faith, 525f.
 Ibid. 528
 Ibid. 511 n.16
 Ibid. 513 n.19
 O. Palmer Robertson, The Christ of the Covenants, 52, 55, 61, 63 (my emphasis).