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What is carbon trading for?

What is carbon trading for?


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By Chris Lang

If it were possible to significantly reduce emissions, end exploration for new fossil fuels, not build new coal-fired power plants, and make a structural shift towards renewable energy production, perhaps then carbon trading would become a secondary attraction, without great relevance. This is what carbon trading is for, and to make money.


Patrick Birley, Executive Director of the European Climate Exchange (a leading carbon trading company in Europe and internationally, sic from their website), knows a thing or two about carbon trading. Or should I know. He says that about 95 percent of the world's carbon trading is done through his company. Therefore, we would do well to listen to him when he talks about carbon markets.

Here's what he has to say about carbon trading: “It doesn't reduce a single ton of carbon released into the atmosphere. It has nothing to do with that. It is a question of caps. The cap system is what produces, in the long term, a decrease in the amount of carbon released into the atmosphere. "

The speaker is not an anti-market or anti-globalization anarchist. He is the director of the European Climate Exchange speaking in Ireland in November 2009, during an event organized by the Institute of International and European Affairs. But if carbon trading doesn't reduce carbon emissions, what is it for then?

Unfortunately, on this point Birley's presentation was a bit more vague. "There are people who win and others who lose money," he explained. Of course he is one of the winners. "I am certainly a for-profit company that aims to generate the highest possible returns for its shareholders, and that does not embarrass me at all."

But carbon trading is not just about making money. Repeating that his company does nothing to reduce the amount of carbon released into the atmosphere, Birley said: "We are helping those who reduce their carbon to manage the associated risks."


In one of the slides of his presentation, titled “Who is the market?”, Birley details four groups: hedge fund managers, investors, arbitrageurs and speculators. Does anyone remember the subprime credit crisis? Wasn't it precisely triggered by those profit makers who manage other people's risks with other people's money?

Earlier this year, I interviewed Jeff Horowitz, founder of Avoided Deforestation Partners, a US-based organization that works to get forest carbon offsets included in US climate legislation. I asked Horowitz why he was in favor of trading carbon credits from forests, since forests do not and cannot reduce emissions. In five long paragraphs, the only answer he gave to this question was to argue that "without the ability to produce credible and environmentally compelling REDD offsets, the reduction targets that politicians could achieve would decline significantly." Patrick Birley also hopes that carbon trading "will make the industry willing to accept a further decrease in caps."

But when we look at those caps, we find little or no evidence to support this argument. During the fiasco of the UN climate negotiations in Copenhagen late last year, the United States and a handful of other countries presented the Copenhagen Accord to the world. That Agreement mentions REDD, but its writers took the already fragile limit of the Kyoto Protocol and returned it so full of holes that it is hardly recognized as a ceiling. An analysis by the Potsdam Institute for Climate Impact Research, published in April in the journal Nature, revealed that: “Current national emission reduction commitments accompanying the Copenhagen Accord will not limit global warming to two degrees Celcius. In fact, they imply an increase in the average global temperature of more than three degrees Celcius in this century. "

The polluting industry is, at least sometimes, very honest about its motives for supporting carbon trading. American Electric Power (AEP) is the largest coal burner in the United States. In 2008, Diane Fitzgerald, AEP's director of environment and safety, explained to Time magazine: "We will compare forest offsets with projects like renewable energy, and we will have to make the best financial decision."

A year later, Michael G. Morris, president of AEP, told the Washington Post: "When Greenpeace says the only reason American Electric Power wants to do this is because it doesn't want to shut down its coal-fired plants, my answer is, ' Of course, because our coal-fired plants serve our customers in a very cost-effective way. '” The industry wants there to be carbon trading so it doesn't have to cut emissions. At the same time, the polluting industry may appear to be doing something when it buys carbon credits.

This trade in a commodity that no one can see is expected to represent a $ 3 trillion market by 2020. This if the market does not crash sooner. The $ 7 billion fraud recently uncovered in the EU illustrates the possibility of organized crime getting involved. Trading carbon will not reduce emissions but will allow industry to continue to use polluting technologies.

If it were possible to significantly reduce emissions, end exploration for new fossil fuels, not build new coal-fired power plants, and make a structural shift towards renewable energy production, perhaps then carbon trading would become a secondary attraction, without great relevance. This is what carbon trading is for, and to make money.

Chris lang, http://chrislang.org - Newsletter of the World Forest Movement - WRM - http://www.wrm.org.uy


Video: Bill Gates-Backed Carbon Capture Plant Does The Work Of 40 Million Trees (July 2022).


Comments:

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