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How Carbon Trading Works


This is a great overview article if you want to learn more about carbon trading and how it works. As frequent readers know, I am not a big proponent of these schemes because I think they are ripe for abuse and many of the “improvements” are just part of the standard process for constant economic savings. Also, as fuel prices rise, improvements become much more necessary.

It does seem likely though that some type of system is going to be implemented in the US and in other countries. So we should all learn more about these systems, their weaknesses and their strengths.

Carbon Reality, Again

The Wall Street Journal has an opinion on the Prime Minister Kevin Rudd of Australia and his failure of imposing cap and trade sanctions to their economy. The political realities of imposing a tax on certain portions of the economy to their detriment and the reward of other industries is difficult to justify. For instance:

  • are customers (industrial and consumer) willing to pay 10% more for their energy needs due to be generated from coal when another part of the country is served by nuclear?
  • are customers willing to pay considerably more for the trucking of fruits and vegetables than their fellow constituent that lives a little closer to the source?

Carbon offset = cheat offset?

I have often complained that carbon offset credits just don’t make sense.  I don’t think that they will do anything to create better behavior and think it is simply a shell game that will only end up lining someone’s pockets.

But I appear to be in the minority in this view.  So I ask those that disagree with me isn’t what is good for the goose good for the gander as well?  I just found this website:


What is Cheat Offsetting?

When you cheat on your partner you add to the heartbreak, pain and jealousy in the atmosphere.

As carbon market grows, law firms cash in

Boston Business Journal – May 16, 2008

In my opinion, this is wrong in so many ways that I can barely count all of the problems! As my frequent readers know, I rant against carbon trading schemes all the time, so much so that my fingers are starting to be bruised. I have yet to see one that makes sense to me and this story typifies many of the problems. (If you want to stay up to speed on all of my thoughts on this subject, subscribe to the feed for this site).

Carbon-Market Concept Moves to Mainstream

Wall Street Journal – May 14, 2008

I really do not like the concept of trading in carbon. I think that carbon offsets trading only reward bad processes that are extremely cheap and are a band-aid to the real problem. If it is assumed that we need to vastly reduce the carbon footprint then the buying public should be encouraged to buy energy and products that result from lower carbon emissions and discouraged from buying the carbon rich ones.

Allowing a utility that has a coal burning plant in one part of the world to offset that footprint with a geo-thermal plant in another part of the world really doesn’t solve anything. If the two plants served the same marketplace, then their energy would compete but if the two plants are separated by oceans then we really haven’t solved any problems, we have just allowed a company to financially afford a carbon-rich coal plant.

Tracking Carbon Trail To Find Why So Much Fills the Atmosphere

Wall Street Journal – December 28, 2007

I have written about the Carbon Tracker service before, but this recent article is very interesting in discussing the lack of understanding that we have in our atmosphere.

Where did all of the carbon go?  It is concerning that we are embarking on a global escapade to reduce, tax, and punish carbon dioxide production but we still can’t answer this very basic question! How does a nation effectively tax carbon production when scientists can’t even tell where 25% all carbon dioxide goes? This begs the question as to if we can appropriately tax the correct polluters and reward the correct sinks.

In China, a Plan to Turn Rice Into Carbon Credits

Wall Street Journal – October 9, 2007

I am not a fan of carbon trading programs or carbon credits as most readers know. However, I do like programs that promise to reduce the use of our valuable resources.

This idea sounds promising as it will decrease the amount of greenhouse gases released into the atmosphere (did you know that agriculture put out more than automobiles?) and it will conserve resources.

…to sell farmers a genetically engineered rice seed. He says the seed, still in development, will cut their need for nitrogen fertilizer, which is among their biggest costs — and a huge source of greenhouse gases. He then aims to sell the resulting carbon credits on a growing global exchange.

Dell Inc. Plans to Become ‘Carbon Neutral’ by 2008

Wall Street Journal – September 27, 2007

This was a short article in the Wall Street Journal which is good because it has little news worthiness and, in my opinion, is more PR than good environmentalism.

First of all, CO2 waste is not a huge factor in the assembly  and marketing of computers which is what Dell does. It is relatively easy for these companies to reduce their CO2 use and even if they didn’t, they really aren’t affecting the carbon dioxide atmospheric content much.  So this is a big "so what" especially when you take into account the next few items.

Industry caught in carbon smokescreen

Financial Times – April 25, 2007

I hope that no one is surprised at this article. It seems like a constant reminder of human greed that someone will take a fairly good idea and create a scam to make money. It seems that no government is immune from corruption as we all read about scams, schemes, and shenanigans in virtually every country with nearly every government. Why would carbon trading be any different?

Companies and individuals rushing to go green have been spending millions on carbon credit projects that yield few if any environmental benefits.


NOAA Magazine – March 21, 2007

This is fantastic.  NOAA has released a new diagnostic tool that will monitor the changes in atmospheric carbon dioxide and other atmospheric gases by region and by source.  This will allow users to understand the pollution that is being put into the environment.

In the above image “negative fluxes (blue regions) indicate places where uptake of CO2 occurs. Positive fluxes (red colors) indicate places where emissions of CO2 occurs. The figures include biological and fire fluxes, no fossil fuels.”

The online data framework distinguishes between changes in the natural carbon cycle and those occurring in human-produced fossil fuel emissions. It also provides verification for scientists using computer models to project future climate change.