Carbon Trading

Global warming is the rapid and continued increase of the Earth's surface temperature. During the last century the earth warmed by 0.8°C. Now the Intergovernmental Panel on Climate Change (IPCC) is projecting that global surface temperatures are likely to increase by 1.1 to 6.4 °C this century. Already nineteen of the hottest 20 years on record have occurred since 1980 with 2005 being the hottest year in recorded history while the east coast of Australia had its warmest May on record in 2007.

If the Earth’s surface temperature heats up by as much as 4˚C, the oceans could rise by 65 metres! Most of the world’s major cities are based on the coast, but what insurance company is going to be able to afford the submergence of entire cities? Relocating people will become too expensive for our current governments, who by then, will be competing for oil and water resources.

The current concentrations of GHGs in the atmosphere are now substantially higher than any time in the last 650,000 years. The increase of GHGs in our atmosphere was kick-started with the industrial revolution, which since the 1850s has largely increased the output of the key GHGs, carbon dioxide, methane and nitrous oxide. At present, atmospheric concentrations of carbon dioxide have increased by over 30% and methane by over 150% above pre-industrial levels and are projected to rise by over 10% every 20 years.

GHGs come from a variety of sources, the burning of fossil fuels from industry and transportation, methane from livestock and paddy rice farming, construction of buildings, the making of cement and deforestation. Three quarters of GHG emissions in the last 20 years have come from fossil fuel burning with the remainder coming largely from deforestation. Aviation is responsible for an estimated 3% of global GHG emissions but is expected to increase in the future.

In today's society, every item we consume is created by an industrial process, and hence has greenhouse gas emissions associated with it. The only way to avoid Greenhouse emissions would be to go live in a cave without power or heat (no little camp fires allowed!) and make everything (I mean everything!) by hand; You can't have any livestock either as one tonne of methane contributes to the greenhouse effect as much as 21 tonnes of carbon dioxide!

Living in a cave, while an adventure perhaps, is not exactly plausible. The alternative is to remove the greenhouse gases from the atmosphere in the short term while trusting that, globally, people are working to develop new, more Earth-friendly technologies in the mid to long term.

To avert the worst effects of global warming we must make changes to our habits and lifestyle. Little things when done by millions of people can make a big difference. While some carbon emissions are unavoidable many can be significantly reduced with a minimum of effort and cost. Then we can offset the rest of our emissions by purchasing and retiring carbon credits. Carbon credits empower anyone to take ownership of their personal greenhouse emissions.

Carbon offsetting means balancing or compensating for carbon emissions in one place with a reduction in emissions in another. Since it doesn’t matter where Green House Gases (GHGs) are emitted, as their effect on climate change is the same, reducing GHG emissions in Brazil or Italy is as effective as doing so locally. And while we need to reduce our personal carbon emissions, some emissions are currently unavoidable, so carbon offsetting is the way to compensate for those emissions we cannot stop.

Carbon reduction projects throughout the world create a tradable 'carbon credit' for every tonne of carbon dioxide equivalent (C02-e) that is stopped from entering our atmosphere. This credit is bought on your behalf and then 'retired' so it can't be sold again, meaning that you have stopped one tonne of C02-e that otherwise would have entered the atmosphere.

This ability to generate and trade carbon credits was an implementation of the Kyoto Protocol. It enabled countries that weren't going to meet their reduction targets to buy credits from countries that had surpassed theirs. Meaning that overall Kyoto targets were met and there was an economic incentive built into the equation to encourage companies and countries to emit less and create a demand for clean energy technologies.

Offsetting means paying someone to reduce CO₂ in the atmosphere on your behalf. In that way we can pay for the damage we are causing and the money stimulates the technologies we desperately need to fund transition to a lower-carbon world.