San Jose Mercury News – June 1, 2007
This is a difficult situation. I really don’t want to condemn having a carbon trading program but the reality is that what we have today is not well done. If we are going to trade emissions, it needs to be extremely verifiable, under penalty of law with huge financial loss, and that the trades actually reduce the pollution of the atmosphere.
I suggest that these programs be held to the same standard that the SEC runs. In fact, I see nothing wrong with the charter of the SEC being expanded to govern this type of effort. The trading of emissions should be held on the books of public companies and it would need to be proven that the trading partner really had something to trade. If, after audit by a 3rd party, it was found that the value of the trade was less than the company accounted for then they would have to pay a penalty.
While this may be an onerous task, we cannot afford to have a lack of confidence in the system. I have already detailed in previous articles how the system can be easily scammed, we need to prevent these abuses.
Taking a step that highlights California’s leading role on environmental issues, the Schwarzenegger administration put its muscle behind a plan to use a pollution trading system similar to one in Europe to help fight global warming.
An advisory committee created by Gov. Arnold Schwarzenegger said creating a so-called cap-and-trade program that allows companies to buy pollution credits is key to helping industries meet the aggressive goals called for under California’s landmark global warming bill, which took effect in January.
Proponents say cap-and-trade programs allow only a fixed amount of carbon into the atmosphere, limiting and eventually shrinking the overall amount that can be put into the air.
But opponents say the reductions often are on paper only because companies don’t have to reduce their pollution. Instead, they can pay another company that does not have a limit on carbon emissions, thus leading to no total reduction in pollution.
The concept of allowing companies to trade off carbon emissions, essentially paying for non-carbon credits, is somewhat controversial, said Jason Barbose, global warming advocate for Environment California. “You don’t have to be an expert in economics to sort of have a gut reaction: `Hey, I thought what we really need to do is stop polluting,” Barbose said. Environment California neither supports nor opposes market mechanisms, he said.
You can read the complete article here.