WHO CARES ABOUT THE PRICE OF CARBON?

Some statistics suggest the EU’s mandatory carbon reduction actions have performed less effectively than US voluntary programs. That is a skewed perspective. The EU has suffered for taking the lead. But its floundering systems have revealed better carbon trading methods and how to control offset programs.

NewEnergyNews agrees with the quoted experts. More action is needed. But counting carbon trading out now is like abandoning a sports team’s game plan early in the game. More action is coming. If profit is being taken, that will only draw more players into the game. And how long can it be before the really big players realize the opportunities they are missing out on by not playing?

When the US takes the kind of bold initiative demonstrated by the EU, it will draw the BRIC countries (Brazil, Russia, India, China) deeper into play and things will start changing.


Carbon price is poor weapon against climate change
Jeremy Lovell, September 24, 2007 (Reuters via Yahoo News UK/Ireland)

WHO
Tom Burke, environment lobbyist, E3G; Jim Watson, Energy Group, Sussex University; Dieter Helm, economics professor, Oxford University;

Trading in the EU emissions market has smoothed out and will continue to do so as the system's leaders understand it better. (click to enlarge)

WHAT
Authoritative observers say the world’s efforts to impede climate change are inadequate and are calling for stronger measures to discourage emissions-generating energy sources and incentivize emissions-free New Energy.

WHEN
- One expert says if the world does not change current trends by 2050 there will be no hope of keeping the situation from becoming “catastrophic.”
- Phase 2 of the Kyoto Protocol program begins in 2008. Plans are being made for what comes after, in 2012.

WHERE
- The current U.S. administration seems to be at least paying a more serious level of lip service to the problem.
- A UN summit in Bali will consider Phase 2 of the Kyoto Protocol program and what will come after.

WHY
The current price for 1 tonne of carbon dioxide-equivalent emissions on the EU market is 20 euros. Under the terms of the UN’s Clean Development Mechanism (CDM), developing nations are earning for “offsetting” industrial countries’ emissions. Combined, the markets are worth billions but have not reduced emissions.

The quoted experts are echoing findings by the International Energy Agency. Controlling emissions requires a wide spectrum of action, not just cap-and-trade. (click to enlarge)

QUOTES
- Burke, E3G: "The policy instrument of choice pretty well everywhere is a price for carbon, and it is not going to work…To stop climate change moving from a bad problem getting worse to a worse problem becoming catastrophic, you have to make the global energy system carbon neutral by 2050 -- and that will not happen just using carbon pricing…It is well within our technical competence. What you need is the political will…The trouble is that there are a lot of people out there making a lot of money out of carbon trading and who want to perfect the market rather than press for the changes that are actually needed."
- Watson, Energy Group: "[Carbon trading] has to go hand in hand with regulations and technological developments, and they are sadly lacking…If you rely too much on the carbon price you give people the option of buying their way out of it. It is a very poor weapon in what is supposed to be a war to save humanity. The oil price shocks of the 1970s didn't wean us off oil, so why should we believe that a high carbon price will wean us off carbon…"
- Helm: "…People like me who think the price of carbon is important don't think it is the only thing that matters. There must be more focus on energy efficiency, more research and development and more renewable energy…"