Isramart: Carbon Offsets

Isra-Mart SRL news:

With the election of new administrations last year in the US, Japan and Australia, we have seen major shifts in policy on climate change globally. It seems that the winds of change are moving towards sustainability and I am looking forward to what transpires at the Copenhagen Convention this month.

With these new administrations looking to develop green industries and the global increase in carbon policy commitments, it seems that the strongest interest can be seen in Asia regarding carbon trading systems. The Asian markets appear to be looking towards the production and export of new and renewable energy techniques as a core economic activity to sustain and rebuild their economies. I wonder if a larger stimulus package along with the removal of a few roadblocks for new businesses would encourage similar innovation here in our country. Fighting the status quo might allow us to create a new roadmap for business development with regards to green jobs, new manufacturing and green energy.

It appears that many countries are ready to meet this month to map out a plan to combat global climate change. Clearly a strong message that global warming is a clear and present danger that needs to be addressed. In my home state of California we have just issued a blueprint for a broad and ambitions cap and trade program to reduce carbon emission levels to 1990 levels by 2020. It looks like we will be leading our nation by proposing a cap and trade program to cut emissions.

Under this program, the overall limit of green house gas emissions from big factories, power plants, refineries and cement plants will be limited to nearly 14% in the next 20 years. The program will also include an option for companies that can not comply to buy and sell emission allowances enabling a collaborative program to reach the goal. This looks to be a boost for California with reports showing a possible revenue of 2 to 5 million dollars per year. Great for the battered state, but it could end up costing consumers more for gasoline. Not good news for suburbanites who love their SUV’s and spend the day driving.

California’s landmark Cap and Trade program is based on reports from the The Intergovernmental Panel on Climate Change regarding the impacts of global warming, that include increases in the earths surface and air temperature caused by increasing concentrations of greenhouse gases, due to human activity. Regardless of potential international treaties, California is ready to push forward along with six other western states and several Canadian provinces, in an action known as the Western Climate Initiative, to work towards a common goal addressing climate change. When the program is fully implemented it will cover approximately 85% of California’s GHG emissions.

The program’s many strategies to reduce GHG that cause climate change include voluntary actions, alternative compliance mechanisms, monetary and non-monetary incentives, and involuntary actions to get the market placed program in place. Many mainstream environmentalists are not in agreement with this plan due to the fact that they believe it is too easy to buy carbon offsets instead of reducing Co2 emissions. Others site the history of cap and trade in Europe that was wrought with fraud and corporate manipulation.

Many people feel that a carbon tax (a tax on the carbon content of fossil fuels) may be a more effective alternative to cap and trade and that it may well spur additional carbon-reducing investment. This tax might, however, be interpreted as a personal tax on everything that emits carbon dioxide and could face steep opposition. The most likely outburst would come from the folks who don’t understand that you are taxed more on what you actually use and that their thrifty neighbors are cashing in on that tax break in the way of dividends they receive based on their conservation. Those dividends could even be perceived as a tax break or cash incentive, enticing greater conservation and slashing more emissions. But, it still seems to be a tough sell in our economic climate.

With all this in play, the recent news of hacked emails at a climate research unit at the University of East Anglia in Norwich, UK suggests that climatetologists’ source data regarding global warming was corrupt. The leak, now referred to as “climategate,” will test California’s will and the Western Climate Initiative’s plans to reduce Co2 emissions. While some feel that this is science pushing an agenda or a sabotage attempt directed to disrupt the Copenhagen Climate Change Conference, others ask why it was so easy to hack into the email database in the first place. Was it a hack at all or just a leak?

While no clear answers exist, many believe that addressing pollution is still a priority to create a healthy environment and others feel vindicated in their beliefs about global warming claims. How it all plays out following the Copenhagen conference and the months, years following will be interesting to all parties involved.