To be honest, I have found this whole carbon credit thing more than a little confusing.
And I’ve been tempted to dismiss it as hokum simply because I couldn’t get it.
Of course, that would be unfair to the environment. So my New Year’s resolution was to finally wrap my brain around CO2.
In two weeks I learned a lot: I learned that carbon trading is anything but simple and straightforward, and that it may actually work if it doesn’t completely collapse.
The idea of carbon credits came out of the Kyoto Protocol, the international agreement on climate change in which signatories agreed to reduce greenhouse gases to 1990 levels by 2012.
Carbon credits are meant to reduce greenhouse gas emissions and fight climate change through the use of carbon offsets.
Offsets can come from tree planting, funding renewable energy research or by reducing CO2 emissions.
The carbon offsets industry has been generally supported by environmentalists and green-minded civilians who calculate their personal emissions and purchase credits to neutralize the pollution they contribute to the atmosphere by driving to work or running the vacuum.
Rich industrialized countries are buying credits to balance out or “offset” an overproduction of CO2 in order to fulfill Kyoto obligations.
More and more countries are considering legislating carbon taxes to bring industry into compliance with their carbon reduction goals.
In Canada, a report released Monday by an independent advisory panel commissioned by the federal government to study ways Canada can make major, long-term cuts to the country’s greenhouse gas emissions, concluded that the only way to do this is to start charging for carbon.
“As long as there is free carbon, and carbon can be emitted freely, it will be extremely challenging to achieve any significant reductions,” said Glen Murray, chair of the advisory panel, which is known as the National Round Table on Environment and the Economy.
The report also recommended that Canada develop a carbon-trading system.
British Columbia has signed on to the International Carbon Action Partnership, which is working toward a regulated international carbon trading market.
In this developing economy of carbon trading, poor countries have largely been in the realm of supply.
Their carbon credit “accounts” are the simple result of having an excess of allowable CO2, although some of the poorest countries feel they have been unfairly cut out of this profitable enterprise.
Business Daily, a newspaper in Nairobi, Kenya, reported last week that Africa has been almost entirely excluded from the CO2 trading because they rely on “sinks.”
Carbon dioxide sinks are reservoirs of a CO2 that are growing larger.
The main natural sinks are oceans and plants — organisms that use photosynthesis to remove carbon from the atmosphere by incorporating it into biomass and releasing oxygen instead.
The Kyoto Protocol allows the use of sinks as a form of carbon offset, but sink detractors say they are uncertain, impermanent and have inferior long-term contributions to climate change compared to reducing emissions from industrial sources.
Farmland in Africa and other developing countries could reliably store up to a quarter of all the carbon dioxide that needs to be removed from the atmosphere, according to Business Daily.
“Today, just four countries — China, Brazil, India and the Republic of Korea — account for more than 90 per cent of all credits sold.
“The world’s least developed countries, mostly in sub-Saharan Africa, have benefited little.”
North America does not have an official government-sanctioned greenhouse-gas trading scheme, like the one in the EU.
But CO2 trading goes on nonetheless.
To offset the CO2 it produces through activities such as shipping and manufacturing, big business can sell itself to the increasingly environmentally minded consumer as a “carbon-neutral” company.
The Academy Awards recently dubbed its awards ceremony “carbon neutral.”
Because carbon credits cost money, the system is supposed to give companies, countries, and individuals financial incentive to produce fewer greenhouse gasses.
But the option of purchasing carbon offsets means that a lot of environmentally indifferent companies will see offsets as a ticket to continue their polluting ways.
I once criticized climate change activist Al Gore’s extensive use of private planes as the vehicle for his global, one-man, save-the-planet speaking tour.
His defenders say that it’s OK because he’s offsetting his contribution to climate change with carbon credits.
Finally, in the middle of this trading scheme is an explosion of new companies and organizations — the traders of carbon credits.
Offsetters Climate Neutral Society, a non-profit organization, is able to sell carbon credits because of its investments in energy projects such as underground heating systems, the installation of efficient lighting in South Africa and efficient cooking stoves in Madagascar and Honduras.
Carbonfund.org uses the offset money to plant trees, to subsidize wind and solar power and to purchase credits on the Chicago Climate Exchange, which barters among hundreds of companies trying to reduce their emissions.
New schemes to create carbon credits are constantly being developed.
One of them, called ocean iron fertilization, involves throwing iron onto the surface of the ocean to stimulate the growth of plankton to absorb carbon dioxide from the atmosphere.
A major threat to the carbon credit system is the lack of regulation over the industry.
Little known companies are cropping up everywhere with no one to certify that they are indeed doing what they claim.
In April 2007, a Financial Times investigation uncovered widespread instances where individuals and organizations purchased worthless credits from carbon offset organizations that did nothing to reduce carbon emissions.
Another looming threat is the lack of regulation over carbon pricing — now prices are plummeting due to an excess supply.
According to the New York Times last week, “most suppliers of carbon offsets say that the cost of planting a tree is roughly $5, and the tree must live for at least 100 years to fully compensate for the emissions in question. By comparison, an offset sold by Dell for three years’ use of a notebook computer costs $2.”
With no single body in charge of keeping track of the world’s supply of carbon credits, this was bound to happen.
So can the world able to come together create a global system of trade in carbon offsets?
I don’t know. My research didn’t uncover that answer.
Juliann Fraser is a writer living in Whitehorse.