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Carbon Credits: 'Cure Worse Than the Disease'
QUEBEC - Carbon credits - to package and trade offsets to greenhouse gas emissions - won't work, says McGill University economist Christopher Green.
Carbon credits - to package and trade offsets to greenhouse gas emissions - won't work, says McGill University economist Christopher Green. (Photograph by: J.P. Moczulski/Reuters, J.P. Moczulski/Reuters) "This cure could be worse than the
disease," says Green, rejecting the argument of Premier Jean Charest,
who wants the Montreal Exchange to be the carbon market for all of
Canada.
As an alternative to Charest's "cap and trade" proposal for carbon credits, Green proposes a carbon tax.
A carbon tax would cost less, he says, and would pay for "an energy-technology revolution," finding ways to use less carbon, or no carbon for industrial processes, transportation, heating and cooling.
And he laments that the Copenhagen conference this December, the followup to the 1997 Kyoto gathering on climate change, seems bent on setting "absolutely unrealistic targets" for greenhouse gas reduction, relying on the carbon markets he distrusts.
"We are going to waste another decade," Green said.
In June, the National Assembly adopted Bill 42, which empowers the province to call on industrial emitters to quantify the greenhouse gases they spew out.
By 2012, Quebec will impose caps on the level of greenhouse gases industries can emit, forcing them to turn to the carbon market.
To explain his plan, Charest hearkens back to the 1990s, when Canada took the initiative in dealing with sulphur dioxide given off by coal-fired power generators in the United States, creating acid rain.
"The government of Canada and the provinces decided this issue had to be addressed," Charest said. "Canada went ahead with a cap on sulphur dioxide emissions and did the regional distribution within Canada and didn't wait for the Americans to act on this issue." Subsequently, the Americans adopted cap and trade.
This time the Quebec tail wants to wag the Canadian dog, in co-ordination with Ontario, Manitoba and British Columbia.
The four provinces belong to the Western Climate Initiative (WCI), started by California Governor Arnold Schwartzenegger, to push the cap-and-trade agenda.
Six states - Arizona, New Mexico, Utah, Montana, Washington and Oregon - have joined California in using the WCI to sway the U.S. government to cap and trade.
Green rejects the parallel Charest has drawn between cap and trade for climate change and the success of cap and trade in resolving the acid rain problem. In 2007, sulphur dioxide emissions had fallen 50 per cent from 1980 levels.
"It certainly worked very well," Green admitted, noting that reducing sulphur dioxide was limited to about 300 coal-fired plants, at a time when cheap, low-sulphur coal arrived on the market.
"There are too many emitters to put a price on carbon," Green said, adding that cap and trade "sounds like something neat" at first glance.
"But the devil is in the details." With our cars, lawn mowers and gas barbecues, we are all carbon emitters. As well, major industries and Alberta's oilsands, which consume the equivalent of one barrel of oil to produce three barrels of synthetic crude oil, make a carbon cap-and-trade system more complex.
Green is also worried about the "subprime" potential of carbon offsets in developing countries.
For instance, banks could package the non-tillage of agricultural land, a way to absorb carbon, just as they packaged dubious mortgages in asset-backed commercial paper.
Planting trees, generating wind energy and carbon capture would also generate tradable carbon credits.
But Green wonders whether the United Nations policing process, to vouch for carbon credits in developing countries, would work.
"There could be counterfeit bills in the carbon market," he said.
Green points to the National Round Table on the Environment and the Economy, an advisory body to the Canadian government, which projects that carbon credits would trade at $200 a tonne in 2050.
Ottawa aims to reduce greenhouse gas emissions 65 per cent below 2006 levels by 2050. In 2006, the emissions were 721 million tonnes a year. The Harper government's target is 469 million tonnes by 2050.
The National Round Table projects such a high carbon price because drastic reductions are needed to meet the greenhouse gas reduction target.
Green notes that countries like Poland depend on coal for 95 per cent of their electricity.
Coal costs about $50 a tonne now.
"Every tonne of coal combusted gives off 2.86 tonnes of CO2," Green said, explaining that adding $200 per tonne for the carbon given off would raise the cost of coal in Poland to an unrealistic $622 a tonne.
"What planet is anyone on?" Green asked.
Green proposes instead a more modest carbon tax of $10 a tonne, much less than the $40 a tonne proposed by former federal Liberal leader Stephane Dion in his Green Shift policy.
"So a $10 a tonne tax implies a tax on coal of $28.60," Green said.
Green is not alone in decrying the Kyoto-Copenhagen process and carbon markets to reduce greenhouse gas emissions.
He is one of 12 international economists who signed a recent paper titled How to Get Climate Policy Back on Course.
The authors noted that, in 2001-2006, as the attention of Kyoto Accord signatories focused on reducing greenhouse gases, the amount of carbon grew globally by 0.53 tonnes for each additional $1,000 of output.
"So during the period in which the most concern has been expressed about the need to reduce emissions, the world has become more carbon intensive," the paper notes.
Why? Because emerging economies, such as China and India, rely on coal to generate electricity and do not have the same greenhouse gas reduction targets the advanced industrialized countries face.
"International capital naturally prefers to invest where there are neither emissions restrictions, nor environmental standards," the paper notes. "If production is transferred to areas, like China, with looser emission norms, then emissions increase overall." Trading carbon credits would please financial derivative traders, Green says, but he rejects the premise that polluters would simply embrace new technologies to reduce their carbon credit costs.
First, the technologies have to be developed, Green said. A carbon tax would finance the quest for green solutions. "I am extremely depressed. It just doesn't make sense," he said.
22 Comments so far
Show AllCap and trade is legal loopholes for polluters to exploit.
Cap and trade will provide the unregulated financial industry an opportunity to use derivatives to abuse the system.
A carbon tax with rebate would provide incentives for everyone to curtail carbon-intensive activities, at all scales.
The Cap n Trade scam restricts the game to only the big players, and the banksters.
Cap an trade will be just right for wall street to pick up the slack from their other nefarious activities.
Carbon Credit Trading Schemes are the madness of fossil fool corporations and the owning upper classes. Their priority is the preservation of wealth through continued resource exploitation. Such a path is only wise if the aim is to bring on climate change as quickly as possible. This may be a good way to curb human numbers, hoping that it will be rest of us and nature that suffers. When the human population is greatly reduced, the original cause of the carbon dioxide and methance forcings will be gone, but not the lingering and runaway effects. The question is will this be worse than putting on the carbon tax brakes now? It will be terrible if the human race , like the USA, only does what is directly right after having tried everything else.
We are all deeply mired in Carbon Debt. There has been not enough real sustainable yield carbon credit available in total on earth for a considerable time to fund the actual huge reductions required in GHG pollution. The name carbon credit is a fraud, as fraudulent as the current Financial Banking System that approves of it. The Gaia-raping perverts that propose it on our behalf are either already stinkingly corrupted by manipulative financial gain or hope to benefited that way very soon. Carbon Credit Schemes equal Business as Usual plus even more ways to make money.
Cap'n Trade is the spoksman for Wall Street greed.
Who gave our government the right to sell pollution credits to poison us?
If cap 'n trade is defeated, the US EPA will still be required, by law, to regulate greenhouse gas emissions including CO2. We just won a big court case.
If cap 'n trade is enacted that legal responsibility will be deliberately annulled by the current energy bill.
Remember, kiddies, nuclear energy is renewable energy because Congress wants it to be.
Nuclear energy is as carbon-free as wind energy. It has the best total-cycle safety record of any source of electrical energy. The radioactive materials present a far smaller health hazard to the general public than many everyday chemical compounds in people homes (many of which have a half life of infinity). For example, the heterocyclic amines and nitrosamines produced when grilling and eating a chicken breast are far more likely to cause cancer than the materials in a nearby power plant.
This irrational opposition to nuclear energy is a pernicious form of Luddism- a fear of any technology they don't understand.
No, I don't work for the nuclear industry.
You should spend a little more time reading up on this highly polluting and destructive technology:
http://www.commondreams.org/view/2009/07/26-8
The critique of nuclear power has nothing to do with Luddism, but everything to do with a coherent political analysis and a solid understanding of the technology. The LAST thing we need to do is to continue to create centralized power systems that allow corporations to dominate our energy.
Like it or not, we will need centralized sytems. Any discusson about nuclear safety needs to be a technical not a political one.
Wind and solar will need centrally run continental grid to move the power around with changes in the regional weather.
Power generation doesn't need to be run by corporations, it can be done by regional government agencies with a lot more accountability.
And you should reconsider the idea that dispersion of power generating capacity would prevent it from being dominated by corporateions. The making of hamburgers is pretty dispersed too, but isn't it rather corporate dominated? In the case of renewables, it would be very unfair to renewable resource-poor areas. We all don't live in sunny or breezy areas.
To say that nuclear is as carbon-free as wind ignores the amount of fossil fuel it takes to build nuclear plants, mine and process uranium (the easy pickings have played out), transport fuel, and dispose of waste.
In order for Yucca Mountain to serve as a nuclear waste dump, a 300 mile long railroad will need to be constructed, operated and maintained. Carbon, carbon, and more carbon.
Nuclear contrbutes carbon at every step of the process.
In "Coal Age" magazine there was a prominent article about how, under carbon trading, operating coal mines will be able to declare themselves net greenhouse gas sinks. It works like this:
Coal mines normally emit methane diluted in air into the atmosphere via their ventilation systems. Since methane is something like 150 times as effective a greenhouse gas as CO2, stopping the methane emission will entitle them to a lot of carbon credits. It is not practical to concentrate the methane for fuel, so the mine will install oil-fired incinerator-like gadgets through which all the mine return air from will pass converting the methane to water vapor and CO2. This will earn them carbon credits that they can issue just like stock on the carbon-trading market. These credits will offset the carbon shares the power plant will have to buy, allowing them to easily comply with the downward buyer-pressure on coal prices from the power plants.
Meanwhile with those carbon credit sales coming in, they can mine the coal itself at a net loss and still make money, so they they will add mining units and churn the coal out even faster because they get nearly free carbon credits from the methane released every foot their mining machines advance. They even get to call themselves "green". Mine happy, power plant happy, carbon-share brokers and traders happy.
Meanwhile of course, not a damn thing is actually done to reduce actually reduce the inexorable increases of CO2 in the atmosphere from the actual coal leaving the mine. This can ONLY be done by leaving coal (and the methane) in the ground.
And there are many, many more carbon-shell game tricks where this came from. Short-selling of carbon shares anyone?
Carbon-credit markets are a sick capitalist joke. Why for crying out loud, can't our so-called leaders see through this insane nonsense?
The only thing that will work is a tax at coal tipple and well head. Period.
Can farmers get credits for killing their methane belching cows?
Cap'n'trade is just another scheme for the current administration to "play environmentalist" on TV. I agree with all the statements made here concerning this scam.
Obama pretends to be the "good cop" as a contrast to the "bad cop" Bush. It will not wash and he is going to pay an awful political price for his duplicity.
Bottom line--cap'n'trade must be abandoned in favor of a straight-forward carbon tax which is more transparent and easier to administer.
Also, the health care initiative has been badly handled, and the best that can be hoped for now is to reduce the age at which one can enroll in Medicare to 50. The Medicare term should be limited to 15 to 20 years for early enrollees.
If it works, as it should, we can look to Medicare for everyone in ten years. Meanwhile the "pot" of people for the private health plans will be reduced considerably, which should result in more competition and lower costs since the older demographics will be in Medicare.
It's another Goldman Sachs marketing scheme. Slicing, dicing, packaging, etc. But most of all STEALING MONEY.
Well! Finally an article that admits Cap and Trade is simply a tax bill and doesn't do a thing for the enviornment.
The World Is Flat argument doesn't fly!!
When people discuss climate problems, every seemingly related issue is touched. Climate has to do with the environment, biological habitats and eco-systems. It is connected to pollution, industrial growth and revenue. People are concerned, dynamic and acting. Corporate systems stifle legislation, sustainability and living quality for profit.
And then we have the benefactors of this turmoil.
A new class of profiteer has emerged, either in it for pure profit (and a whole ‘industry’ is emerging) or for political benefit. The new system, where a huge, very diversified group tries to make a profit from ‘producers’ is called CARBON TRADING. At last, the banksters, bullshititians and cronies have found another very comfy commodity to exploit and freeload from and keep the rest of the population in struggling occupation: CARBON DEBT.
NOT Carbon Credits which will be traded, but Carbon DEBITS.
Remember that the core of our morose system is DEBT itself (see the first half of Zeitgeist Addendum http://video.google.com/videoplay?docid=7065205277695921912 ). Carbon Credits are Debt For The Masses.
The scams get more and more elaborate, the truth gets more and more fragmented and skewed.
Climate Change is happening, but don’t believe all the political and corporate media hype. Causalities and climate science with integrity point away from CO emissions as the cause of Climate Change (see for example http://nzclimatescience.net/index.php ). Population growth, pollution, deforestation, agricultural soil destruction and destruction of ecological systems will make human future hell.
However, CARBON EMISSIONS BEAR UNLIKELY CAUSALITY to Climate Change. Carbon ‘Credit’ Trading will do nothing to better the planet but will be a feast for systemic parasites like banksters, polititians, corporates and polluters. It’s the Scam Of The Century.
Our economic system is based on infinite growth yet reliant on a planet with finite resources.
Or decision-making is based on finite wisdom yet exploited by infinite profiteering.
Carbon credits are neither cure nor attempted cure nor even compromise, but a way to pass energy control to market speculators.
bardamu said it all. Just another con.
How about CAP & REDUCE.
Isn't that the point? Cap and trade, and keep lowering the cap over time?
I don't understand why people keep claiming cap and trade is a scam, or that a carbon tax is better. If you want the carbon emissions to be at a certain level, you would have to come up with a tax that you think would get you there. Chances are that you'll get it pretty wrong on the first try, and the rates are only adjustable on a yearly basis (if that). The tax rate would ignore many externalities, because you're setting the rate for a year ahead, during which anything could happen.
If studies indicate that getting to the required levels of emissions with cap and trade will cause coal to cost a mountain of money, then you're not likely to get to that level with a "modest tax." More likely is that a modest tax will fail to create the reductions in levels you're looking for.
On the other hand, you can cap carbon emissions at a certain level and let a market decide a fair price for that level. This is the most efficient way to choose a desired output level. So yes, companies that can afford to pollute will pay a lot to do so, and then operate at a reduced efficiency. This will make alternative energy sources more financially feasible. This is the same way the carbon tax would operate (make it expensive to emit C02), only more efficiently, and with greater predictability of results.
The people complaining that it will take money from us are kind of missing the point. Any cap and trade system or carbon tax system will make our goods that are largely produced with carbon-emitting technology cost more. The corporations will all pass the extra expense on to us. You can't get something for nothing.
I can see your point.
And there is much logic in cap and trade or even a carbon tax.
However, my concern is that vetted interests, often from opposite ideologies and convictions, will exploit this and that a vast array of environmental problems are believed to be solved by this debt creation as an uncomfortable means to maintain the squandering of the planet and theft on generations.
I admit that I do not have an alternative suggestion in means of intervention by governance apart from proper environmental laws. My hope is -and maybe I am too much of an optimist here- that the looming economical collapse and collective awareness of the underlying issues will change consumerism, one of the core problems of the ecological mire we are in.