The Carbon Credits Debate

At the ongoing U.N conference in Bali, Indonesia carbon trading has been an important issue to debate on for the participating countries. Under the Kyoto Protocol, industries from developed countries that exceed their limit on CO2 emissions can buy carbon credits from companies in developing nations whose emissions is less than the allowed limit. The goal is to stabilize and reduce global CO2 emissions through this market based approach.

But many environmentalists are not in favor of this policy, which requires industrialized nations to reduce their carbon emissions by only 5.2% less than their 1990 levels by 2010. They believe the target is an insignificant change that is way less than what is needed to solve the climate crisis. Many argue that a system that does not require countries to become more sustainable is seriously lacking.

Video below titled "Cost of Carbon Trading' highlights the negative aspects of the credit system.


On the other hand, many experts also believe that market approaches such as this could solve global warming. The point out that credits act as incentives for companies to look at their environmental impacts and be accountable for it.

Video below titled "How Carbon Trading could Solve Global Warming" highlights the positive aspects of system.


Global warming needs to be solved through multilevel strategies. Solutions that require individuals, communities and countries at large must be looked at. I think market based solutions should also be a part of this effort. Developing countries who are dealing with other compelling issues such as poverty and employment can easily overlook their environmental impacts. Carbon credits at the least may encourage companies in such countries to reduce emissions for economic benefit.

However, the real goal can be easily sidelined by the financial gains the trading system provides. The carbon credit industry is now worth 30 billion dollars and is growing rapidly. There have been reports of bogus carbon credits being sold by countries that may be reporting their CO2 emissions lower than they actually are.

Therefore, it is important that the system has strict monitoring aspects to it and penalties as well. The U.N must push towards commitment for emissions reductions from all countries. The system should not merely cater to wealthy nations that can just buy their way through global warming responsibilities.


Bibliography:

“What is emissions trading?”
http://www.environment.nsw.gov.au/licensing/emissionstrading.htm
“Carbon trading: Where greed is green”
http://www.iht.com/articles/2007/06/20/business/money.php
“A fifth of U.N carbon credits may be bogus”
www.reuters.com/article/environmentNews/idUSL2926519020071130 - 88k -