Comments on: World’s Largest Carbon Market Facilitates Pollution

By: Michael Cathcart

Michael Cathcart — Wed, 04 Jun 2008 18:45:03 +0000

If the US turns to a cap-and-trade market, what markets would gain and what markets would lose? Is it profitable to prepare by purchasing carbon credits for the expected future change?
Does anyone know if carbon credits purchased now will transfer when a cap-and-trade policy is passed my legislation?

By: Michael Cathcart

Michael Cathcart — Wed, 04 Jun 2008 18:43:39 +0000

By: Michael Cathcart

Michael Cathcart — Wed, 04 Jun 2008 18:43:33 +0000

By: angelique van engelen

angelique van engelen — Sun, 01 Jun 2008 08:25:49 +0000

Hi there,
Thanks for your comments. I have attached the link to the document which has all the information to the issues you are raising.
The researchers explain extensively the situation in the Third World by focusing on the complexities of coal fired plants in China. For a balanced opinion and an idea of the vast scope of the developments in recent years, I would urge you to read the document.
http://iis-db.stanford.edu/pubs/22157/WP74_final_final.pdf
The document includes a few helpful observations, notably;
A quick recap of what Kyoto boils down to;
-”The Kyoto Protocol is one of the most complex multilateral environmental agreements ever
negotiated. At its core was a bargain between developing countries (whose participation is essential to any long-term effort to control emissions) and developed countries (who accepted binding limits on emissions). That core deal was cemented with flexible compliance mechanisms involving carbon offsets generated either in economies in transition (so-called “joint implementation, JI”) or in the developing world (so-called “clean development mechanism, CDM”). Of these alternative compliance mechanisms, the CDM has become by far the largest emissions offset market ever created. [...] The enormous diversity of projects participating in the CDM when compared to JI and the special circumstances of the Russian and Ukrainian economies makes CDM a more representative offset market for considering the likely impacts of U.S. participation in a
post-Kyoto global carbon market. Finally, many of the rules for JI implementation have been copied
wholesale from the CDM. If one wants to study offsets in the real world, one studies CDM.
The growth of the CDM has been truly extraordinary. In 2007, the value of the CDM market totaled ‚Ç¨12 billion, more than triple the previous year’s figure.10 The CDM project pipeline has grown in four years from essentially nothing to more than 3000 projects either registered or in the process of achieving the necessary regulatory approvals. The project design documents for these projects together project that the CDM market will deliver more than 2.2 billion CERs to the end of the Kyoto Protocol’s compliance period.
Certified Emission Reductions (CERs) are the CDM’s currency – they are the measure of the quantity of emissions that has been avoided (”offset”) by CDM projects. If all of those CERs bubbling
through the pipeline actually come to fruition, and if they represent real emissions reductions, then the CDM would be the largest source of GHG reductions produced by the Kyoto Protocol. [...] While it is difficult to make a precise assessment, on current trajectories, import of CERs could account for up to ten times the actual reductions of emission reductions from within the EU cap-and-trade. Total required reductions to meet the limits under the EU’s ETS during the 2008-2012 period are expected to be about 700 million metric tons (”tonnes”) of CO2-equivalents, of which perhaps only a small percentage would be accounted for through actual reductions within EU borders. The EU, to be sure, is making a serious effort to control emissions at home, but those emission controls are proving much more costly than importing CERs. The EU member states have adopted allocation plans that could, in theory, allow all their “reductions” under the ETS to be met with CERs, although we do not expect that extreme outcome.”
-Recent EPA analysis estimates that the inclusion of offsets and international credits in the Liebermann-Warner bill reduces
the predicted allowance price for capped sectors from $77 to $40 in 2015.
Hope it clears it up.
Regards,
Angelique van Engelen

By: gerald hamaliuk

gerald hamaliuk — Sat, 31 May 2008 07:46:17 +0000

I don’t believe the results, as our company, LFGC Corp, has participated in more than 20 CDM projects and we have not had any “review” by any organization, especially Stanford, so where do the conclusions come from?
If the article is to be believed, please make available the “review of the 3000 projects”. You can send it to the e-mail address below. The statements made are not credible.

By: don dobson

don dobson — Thu, 29 May 2008 12:53:01 +0000

yeah, but since there’s a global cap (theoreticaly) the amount of pollution stays static only until the cap is lowered, which raises the price of pollution thus giving rich companies more incentive to start reducing. So in theory this system is great. Certainly it’s not perfect and there may be dodgy numbers being counted here and there, but the carbon market *should* be a good thing.
The article suggests the problem has to do with funding projects that “should not qualify” so obviously some oversight needs to be in place there that isn’t currently working, but may or may not be the market itself that’s to blame.

By: Angelique van Engelen

Angelique van Engelen — Thu, 29 May 2008 06:30:57 +0000

No. This is a two way system which is designed to eliminate the output of pollution without sacrificing economic growth at both ends. A poor country company invests in clean tech to expand and gets funded to do so by European companies/countries who exceeded their pollution targets. It’s as fair as it has gotten thus far.
Regards,
Angelique van Engelen

By: don dobson

don dobson — Wed, 28 May 2008 22:26:36 +0000

but… Isn’t that the point? We give these companies the right to pay to pollute, which may not offset anything but at least it keeps things from getting worse. Seems like a small first step but better than the status quo, no?