One of the elements of the Kyoto treaty is the use of carbon markets. This lets those countries either producing under the treaty limits of CO2 or not currently bound by the treaty (for now, mostly developing nations) sell carbon emission rights to treaty-bound over-producers. While this may seem like a way for over-producing countries to just keep spewing excess CO2, it's actually a very good idea: few countries are close to making the Kyoto limits without buying credits, so there's considerable demand; even as more countries get their emissions in order, the emissions allowed will gradually decline over time, making the remaining credits inevitably more expensive; countries will therefore have an economic incentive to be net carbon credit producers instead of consumers. It's definitely an incentive for developing countries to adopt cleaner technologies sooner, so as to continue being sellers and not buyers as they continue to grow. We're now starting to see how these markets will play out.
Reuters reports a partnership between a Norwegian firm and a Brazilian landfill to trap and burn methane emitted by the landfill; this will reduce the net addition of methane (21x more powerful a greenhouse gas than CO2) to the atmosphere. Norway would get the credit -- equivalent to 670,000 tons of CO2 -- and Brazil the cash, currently €8.25 ($10.98) per ton. While this is one of the first deals signed, it's far from the only one around.
Elsewhere around the globe, Telnes [technical director of the Norwegian company, DNV] said about 200-300 clean energy projects were nearing certification in developing nations with perhaps another 1,200-1,300 on the drawing board.
"In the long term I wouldn't be surprised if we saw between 500 and 1,000 projects coming on every year," Telnes told Reuters. DNV, perhaps best known for checking ship designs, is a world leader in certifying environmental schemes.
With the markets now underway, there's a real need for information about their function and efficiency. The World Business Council for Sustainable Development often gets stories from the for-pay Point Carbon, a website which collects information on carbon markets and the UN's "Clean Development Mechanism" which coordinates these developing world carbon-for-cash schemes. Point Carbon has abundant information about carbon markets, from news feeds to market analysis to explanations of just how it all works. Some of the explanatory pieces are free, but much of the material requires a subscription fee.
I'm still looking for a free source of carbon trading info. Any suggestions? This is a process which is definitely worth watching.
looks like point carbon is a pay service, any word on any free services?
Ack, you're right. I found out about the site a little while back, I must have signed up for the free trial.
I'll look for a free service (and make a note in the body of the article); in the meantime, the World Business Council on Sustainable Development newsfeed often has stories from Point Carbon.
Thanks for letting me know!
This system as analysed in the article seems poised to become a big machine for partially transferring wealth from "wealthy, industrialised" countries to "poor, undeveloped" countries.
Could these markets be paired with the accounting of third world debt somehow? Maybe a trade of carbon credits for (sustainable) development funds, which then makes more credits available to the developing world in a massive feedback cycle?
Some links to carbon trading news:
The International Emissions Trading Association has a weekly news roundup:
Environmental Finance magazine has news updates, some about trading markets. Look in their magazine archives too:
The EU Emission Trading Scheme has press releases:
Also, the European Climate Exchange has occasional news:
Thank you, Laurence!
You just saved me hours of surfing for a briefing paper I'm preparing for the Canada Green Building Council's Technical Advisory Group. Our decision will be the better for your help - *much* appreciated!
Ian Theaker, P.Eng.
LEED Program Manager
Canada Green Building Council
It should be pointed out that carbon trading is hugely contentious and many envrionmental and social justice activists oppose it due to its many inherent problems.
Some of the problems include:
loopholes: most emissions trading schemes have large loopholes which distort the whole system. These range from reliance on 'credit-generating projects' such as monculture tree plantations, as well as lack of credible enforcement and verification systems to the use of financial instruments such as carbon hedge-funds, banking systems, derivatives, etc.
toxic co-pollutants: the production of emissions such as greenhouse gases inevitably invovle the production of toxix co-pollutants. These often include Volatile Organic Compounds (VOCs), Polycyclic Aromatic Hydrocarbons, Particulate Matter, benzene, arsenic, dioxins, mercury, cadmium, etc. All of these co-pollutants have huge public health consequences.
environmental justice: trading only deals with a general reduction, while individual polluting sites and industries may in practice actually be able to increase their emissions. The reality is that most polluting industries are sited in areas of predominately low-income and communities of colour. Existing schemes have actually demonstrated that massive increases have happened in such communities, resulting in dramatic impacts on the people living there. It was the result of such schemes which is one of the main factors behind the emergence of the environmental justice movement.
commodification: trading in emissions effectively creates a commodity literally out of thin air. As such, global pollution trading is a form of privatisation of the atmospheric commons (you can't sell what you don't own) and allows the market and corporate actors (many of whom are the world's biggest polluters) to determine the pace and development of the 'carbon market'. It is precisely for this reason which corporate lobby groups such as the WBCSD and IETA support it. It should be noted that these groups have played an enormously obstructive role in efforts to negotiate effective environmental agreements and both have some of the world's most notorious polluters as their key members.
distortions: trading is a distortion of what really needs to happen which is reductions at source across the board. No source should be allowed to increase its emissions due to the above reasons.
There are many other problems inherent in the carbon market.
A recent statement signed by many NGOs and community activists regarding the carbon market (pdf) can be found at: http://www.carbontradewatch.org/news/statementeng.pdf
For more on the role of the corporate lobby groups such as the WBCSD and IETA, see: www.corporateeurope.org