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.
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RP Siegel (1952-2021), was an author and inventor who shined a powerful light on numerous environmental and technological topics. His work appeared in TriplePundit, GreenBiz, Justmeans, CSRWire, Sustainable Brands, Grist, Strategy+Business, Mechanical Engineering, Design News, PolicyInnovations, Social Earth, Environmental Science, 3BL Media, ThomasNet, Huffington Post, Eniday, and engineering.com among others . He was the co-author, with Roger Saillant, of Vapor Trails, an adventure novel that shows climate change from a human perspective. RP was a professional engineer - a prolific inventor with 53 patents and President of Rain Mountain LLC a an independent product development group. RP was the winner of the 2015 Abu Dhabi Sustainability Week blogging competition. RP passed away on September 30, 2021. We here at TriplePundit will always be grateful for his insight, wit and hard work.