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Texas Climate & Carbon Exchange Opens for Global Trading

RP Siegel | Friday June 22nd, 2012 | 4 Comments

I know, this almost sounds like a punch line to a bad joke, or perhaps an oxymoron. Many people tend to think of Texans as backward-looking, conservative, entrenched in the status quo and not at all interested in talking about climate change, except maybe to argue that it doesn’t exist. And they didn’t come by that reputation by accident, either. After all, it is the home of George W. Bush and Rick Perry, both of whom have been known to censor information about global warming. But there are two things that Texans understand, perhaps better than most of us and those are: energy and money. And, to a certain extent, in Texas, these issues seem to rise above ideological boundaries. That is why, for instance, Texas is the #1 state in the US in wind power, producing 6,527,850 GWh/yr (as of 2010) almost twice as much as its nearest competitor, Kansas.

Substituting windmills for oil wells is one thing, but carbon trading? One could argue that wind power makes sense here, because of the wide, open prairies and strong steady winds. But carbon trading could be done in Brooklyn. One could argue that because there are so many carbon credits available for trading here from all that wind power, it makes sense to locate it nearby. Or it could just be that Texans, understanding energy and money as they do, saw the opportunity and jumped on it first.

According to Nathan Rockliff, co-founder of Carbon Trade Exchange (CTX), parent company of the newly formed Texas Climate & Carbon Exchange (TCCX), “Carbon Trade Exchange is proud to establish its first USA trading relationship from a central and strategic market such as Texas. We see the U.S. market as one of the fastest growing for Carbon in the world over the next decade.”

CTX, which is located in Sydney, Australia, has 150 members located in 22 different countries. You can think of it as a kind of stock exchange for the global electronic trading of emissions offsets, also known as carbon credits. TCCX, whose slogan is, “a new environmentality” is located in Austin and is the sole licensee for the Carbon Trade Exchange for the United States, Canada and Mexico.

According to the CTX website, “Our platform allows businesses to meet their compliance obligations under the EU Emissions Trading Scheme and voluntarily offset residual carbon emissions to become carbon neutral.”

Emissions trading is already well established in Europe.

Carbon offsets, which can be mandatory, under a cap-and-trade scheme, or voluntary, depending on the jurisdiction, provide a marketplace in which carbon-reduction activities can be purchased by entities to reduce their net effective carbon footprint. While this does not eliminate the carbon emissions from the entity, it does encourage activities which, will, since greenhouse gas emission is a global phenomenon, reduce the overall global carbon footprint. If these exchanges are set up correctly, carbon credits will help lower the costs of renewable and low-carbon technologies as well as assisting in green technology transfer to developing countries.

Critics of cap-and-trade systems include economist Thomas Crocker, who originally devised the scheme fifty years ago, to deal with local pollution that could be tied to specific sources. Crocker believes that an outright carbon tax would be preferable, “because it would be easier to enforce and provide needed flexibility to deal with the problem.”

Especially, he told the WSJ, back in 2009, when it comes to carbon, a pollutant that is inherently global in nature, “It is not clear to me how you would enforce a permit system internationally. There are no institutions right now that have that power.”

CTX and its licensees support the trading of carbon credits that are originated under both the United Nations Clean Development Mechanism (CERs) and independent voluntary standards (VERs).

The World Bank estimates the carbon trading industry will exceed a market value of $1 trillion by 2025, as more and more municipalities, states and countries begin to require cap and trade schemes. The Canadian province of Quebec, just recently joined with California in a joint cap and trade market.

Representatives of the utility, local government and environmental groups were present for the announcement, as well as executives from TCCX, and CTX.

[Image credit: jmtimages, Flickr]

RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.

Follow RP Siegel on Twitter.


▼▼▼      4 Comments     ▼▼▼

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  • gofer1

    Some people will make a lot of money before the whole scheme collapses, as has already been demonstrated. Fraud is already rampant throughout and the value in such transactions are purely imaginary.  There is nothing there and when govt. subsidies cease for so-called renewable energy, the system will collapse. This is the next big bubble, but one that will make a lot of people rich at the expense of society.  CO2 is not a pollutant, yet has been labeling such because of its alleged effect on warming. Yet there is zero scientific, empirical evidence of such.  As always, follow the money trail.

    When the cold cycle ramps up, which it will, then it will no longer be easy to hide the real motive behind such schemes.   Buying carbon credits is no different then “papal indulgences” because it’s a “symbol.”  The CO2 emissions of building, transporting and erecting unrealiable windmills will never be offset in the lifetime of the windmill, much less offset any other CO2.

    The lack warming over the last 15 years is being ignored  and trying to reduce atmospheric CO2 by a few molecules will be fruitless.  Nature adds 97% of CO2 and we are trying to reduce man’s 3% by orders of molecules.  CO2=GREEN, that’s a major component of plant growth and the reason that greenhouses ramp up CO2 to near triple the atmosphere. 

    Society will revolt when electricity skyrockets and becomes unreliable.  Becoming carbon neutral is no different than becoming “sin neutral” because the “priest” declared it so and instead of a priest one has a “carbon certificate” declaring them free of “green sin.”

    • Tryrone

      “CO2 is not a pollutant” … you know, it’s perfectly fine to have skepticism about CO2 trading, or taxation, but the comments like that are utter fantasies.  It’s beyond irresponsible at this point.   If you have better ideas as to how we can control our CO2 emissions (and recognize that there are many other environmental problems besides) then we’re all ears, but claiming that global warming is a hoax is evil.

    • Scientist

      I think you meant to spell goofer1 as your nickname because
      that is what you are: a misinformed GOOF!

       

      Let me explain a couple of definitions for you:

      First, it is called renewable because the source is part of
      an continuous cycle that does not end and is therefore an infinite cycle.
      Contrast that with fossil fuels in which the cycle that creates them takes
      millions of years and therefore the supply is limited.

      Second, no one is saying that CO2 is a pollutant you dummy.
      We are calling it a greenhouse gas. Do you need me to explain what that is to
      you??

       

      Now, I very much like to see your source for claiming that
      “The CO2 emissions of building, transporting and erecting unreliable
      windmills will never be offset in the lifetime of the windmill” that is
      just absurd, as a matter of fact, I would be willing to pay for such data, name
      your price… Moreover goof, the windmills are replacing the construction of other
      electricity generators, so most of the CO2 emissions related to building windmills
      would be released anyways, I do not know how much CO2 is emitted in the
      construction of a windmill vs a natural gas plant but you would have to look
      into that if you want to make such argument.

       

      I could go into the evidence that shows conclusively that
      the recent trends in global warming are being caused by human related
      emissions, but I can tell from your post that you are an ignorant hick that
      does not bother to read or understand scientific evidence so I will not waste
      any more of my time. Ohh, you could watch Al Gore’s “An Inconvenient
      Truth” to start educating yourself, we can talk more afterwards.

       

      tata

    • RPSiegel

      You clearly have no idea what you’re talking about. According to this article from Elsevier, which performed a detailed life cycle analysis, windmills “pay back” their construction emissions in roughly eight months.

      http://www.cynulliadcymru.org/sc_3_-01-09__p8__further_evidence_from_bwea_cymru_on_carbon_reduction_via_land_use.pdf.pdf

      And if you’ve seen “zero scientific, empirical evidence” of global warming, that must be because you’re looking where the sun doesn’t shine.