Carbon Trading — A False Solution
Here’s an informative interview with South African activist and professor Patrick Bond, who spoke with Democracy Now!‘s Mike Burke at the March for Climate and Social Justice in Warsaw. As he discusses here, Dr. Bond believes, as I do, that the concept of carbon trading is unworkable, and will do little if anything to reduce emissions.
Craig,
Consider this. There is an environmentally-conscious person in a suburb of New York City who wants to “help the environment”, and that person is willing to spend $100,000 for the sole purpose of “making the world a better place”.
So that person buys a Chevy Volt, and spends $60,000 on a 15 kW solar power system… and calls himself/herself a great steward of the environment. He/she drives ~35 miles/day (except on trips, where he/she uses gasoline)…
So said environmentalist is saving ~1 gallon of gasoline/day from the car purchase, and producing an average of ~19 MWh/year in electricity (~5.5 MWh is used on the vehicle).
The net return for his purchase is now ~$1460/year in averted gasoline purchases and $1755 in averted electricity purchase/sold electricity. So he/she’s getting ~3.2% ROI on his net investment in the environment, and he/she’s offsetting a total of ~15.8 – 23.7 tons of CO2/year… The car lasts 13 years, and the inverter for the solar power system lasts 16, the cells degrade at 0.7%/year and become unusable at 25-30 years.
On the other hand, said person’s neighbor is also interested in helping the environment… but THAT person is a bit more savvy.. He/she buys a Prius, and invests in $70,000 in a wind farm in the Dakotas which has an average ROI of 5%. THAT person is saving only ~$1100 in offset gasoline purchases, but is getting $3500/year back from the investment in the wind farm. So he/she is getting 4.6% ROI on their social consciousness, and they are offsetting ~203 tons/year in CO2. While the 3.8 tons/year offset from purchasing the Prius might only last 13 years, the investment in the wind farm (which is offsetting ~199.2 tons/year for the small percentage of the investment that is covered by the 70,000 investment) will last 40-50 years.
In both cases, the same amount of money is spent… but in one case the person is doing ~10 times as much good for the environment WHILE receiving a larger and longer-term return for that investment into the environment.
That’s the idea behind carbon trading schemes. Making the money that is spent on improving the environment stretch further and give greater returns overall – so the economy is not significantly harmed by shifting to a less polluting state.
Essentially carbon trading is a means of encouraging the low hanging fruit get picked first. It’s smart, and it works. The problem is fraud – when you start selling “carbon credits” for activities in the 3rd world, it gets very dicey. It’s pretty easy to sell the same land for aforestation dozens of times… and then what would have been the most cost-effective option works out to be hundredsfold less cost effective than it should have been.