Carbon trading must be well overdue !

26 02 2007

Coal Power Plant - Germany

News this morning that Australia’s power companies are pleading for a carbon trading scheme.  Clearly an idea whose time has come.  So what’s the problem?  Who exactly, apart from a handful of federal government ministers, is against the idea (or at least dragging the chain)? 

Here’s the story from ABC online.

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4 responses

4 03 2007
Trinifar

Carbon trading is better than nothing, but isn’t it a program that, at the end of the day, essentially enables increasing carbon production?

4 03 2007
Verdurous

It does have its critics for sure. The essential idea though is that it would not make economic sense for firms to increase carbon production. Competitive pressures should mean that those that reduce emmissions can profit by selling their excess permits. I reprint this extract from Wikipedia:

“A country (or group of countries) caps its carbon emissions at a certain level (this is known as cap and trade) and then issues permits to firms and industries that grant the firm the right to emit a stated amount of carbon dioxide over a time period. Firms are then free to trade these credits in a free market. Firms whose emissions exceed the amount of credits they possess will be heavily penalised. The idea behind carbon trading is that firms that can reduce their emissions at a low cost will do so and then sell their credits on to firms that are unable to easily reduce emissions. A shortage of credits will drive up the price of credits and make it more profitable for firms to engage in carbon reduction. In this way the desired carbon reductions are met at the lowest cost possible to society.”

5 03 2007
Trinifar

In the news article you link to Energy Supply Association of Australia chief executive Brad Page notes, “any cost on carbon introduced locally must be low so it does not damage industry.” So how much is this more PR than sustainability?

As I said, it’s better than doing nothing, and, since at least in Australia the energy industry is asking for it, it has a chance of being implemented. Another quote from the same Wikipedia article you quoted:

There are critics of [carbon trading] schemes, mainly environmental justice NGOs and movements who see carbon trading as a proliferation of the free market into public spaces and environmental policy-making. They point to failures in accounting, dubious science and destructive impacts of projects upon local peoples and environments as reasons why trading pollution rights should be avoided. Instead they advocate making reductions at the source of pollution and energy policies that are justice-based and community-driven.

For me, the problem lies in speed of reduction, the USA is doing much to help. The AP reports, “By 2020, the United States will emit almost one-fifth more gases that lead to global warming than it did in 2000, increasing the risks of drought and scarce water supplies.”

Everyone is so committed to increasing economic growth that the idea of even slowing it down is seen as harrowing.

5 03 2007
Trinifar

I omitted the “not” in “the USA is doing much to help.” (I guess, as is, it reads as irony 🙂

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