Geoscience Reference
In-Depth Information
Carbon trading and offsetting
emissions are lowered is carbon trading. This is one of two approaches that can be used to
make alternative energy and CCS to be economically viable. The second approach is to
penalize energy generation by fossil fuels with a trading scheme in which carbon permits
must be bought. Since it is never cost effective to fit carbon capture to coal-fired power sta-
tions, this cost could be reduced by allowing these companies to trade the carbon saved.
The European ETS and EU 20:20:20 laws are already making renewable sources of energy
more competitive. So we must remember that if we really want to switch the global eco-
nomy away from carbon and on to alternative energy sources and CCS, we need a fiscal
method to drive the markets. So far, the only approach that seems to have worked is within
countries, and the use of trading blocks is the cap and trade system, allowing for the fact
that reduction of carbon emission is very different in different countries and regions.
One of the most controversial aspects of carbon trading is offsetting, which has occurred
through two systems: the UN CDM and the voluntary markets. The CDM has been de-
scribed in
Chapter 7
and involves UN-certified programmes in developing countries being
funded to make significant GHG savings. These can include preventing methane release
from an abandoned mine, increasing energy efficiency, solar power or wind power genera-
tion, or reduction in the manufacture of HFCs and CFCs. The CDM credits can be bought
by countries, companies, or through the voluntary market. For example, every time you fly
you can buy through a number of companies carbon offsets equivalent to the carbon emit-
ted on your flight. In the West, a new branding of 'carbon-neutral' products has been seen.
This seems to encompass anything from television companies such as BSkyB to paper
manufacturers such as the Arjowiggins. Offsetting is controversial as it is argued that many
of these cuts would have been made anyway, and also it means that companies and people
may not be motivated to change their actual behaviours. On a practical level, however, it
does offer a way that individuals, companies, and countries can make a difference. It also
provides a means of dealing with unavoidable carbon emissions such as from aviation.
What does need to happen is for there to be clear global rules on what is and is not an ac-
ceptable carbon offset. There also needs to be a clear verification service to ensure that the
carbon saved is really saved.
