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.

Carbon Trading For You And Me

What is Carbon Trading?

We all have a way of life, and while some of us can afford to put solar panels on our houses, there are still emissions produced from everything we do every day, from the production of the clothes you wear, to the furniture you sit on, and from the food you eat, to the services you consume. Besides, we don’t all want to drive a hybrid car and become vegetarians. 

Carbon trading, or carbon offsetting, is a way to balance or compensate for carbon emissions in one geographical place, with a reduction in emissions in another. Since it doesn’t matter where Greenhouse Gases (GHG) are emitted, as their effect on climate change is global, reducing emissions in Brazil or Italy is as effective as doing so locally. ‘Carbon emissions’ refers to carbon dioxide (CO²), and are a form of GHG, as is methane and nitrous oxide, but for most of us it is easier to think in terms of carbon emissions.

It’s completely voluntary, but in 2011 it will become compulsory for some industries. While we do need to reduce our personal carbon emissions and stop being wasteful, some emissions are currently unavoidable, so carbon offsetting is the way to compensate for those emissions we cannot stop. 

Little things, when done by millions of people, can make a big difference, and carbon offsetting reduces emissions with a minimum of effort and cost. Offsetting means paying someone else to reduce CO² in the atmosphere on your behalf. In that way we pay for the damage we are causing and the money stimulates the development of green technologies that we desperately. 

What is a Carbon Credit?

Carbon reduction projects throughout the world create a tradable ‘carbon credit’ for every tonne of carbon dioxide equivalent (CO²-e) that is stopped from entering our atmosphere. When you buy a credit, it is then ‘retired’ so it can’t be sold again - the credit will be recorded against your name, meaning that you have stopped one tonne of CO²-e that otherwise would have entered the atmosphere.

There are many different kinds of carbon credits. Certified carbon credits are created by government approved abatement projects. These include projects such as harnessing landfill gas, reforestation and sequestration, and electricity consumption reduction.

Beware: because there are plenty of people claiming to produce carbon credits, but they are in fact not accredited, nor are they even measured properly. You might be paying someone for nothing.

And how much does it cost? Generally, a carbon credit is $20, though this will probably rise. The Government will be setting a cap on its carbon credits at $40. So, currently, if an average Australian household emitting 20 tonnes of CO² wants to go ‘carbon neutral’, it would cost $400 per annum. The equivalent would be to plant about 80 trees.

What is a Footprint?

A carbon footprint is a measure of the impact that our activities have on the environment, and in particular, greenhouse gas emissions and climate change. It relates to the amount of greenhouse gases produced in our day-to-day activities through burning fossil fuels for electricity, heating and transportation, etc.

An alternative definition of the carbon footprint is the total amount of carbon dioxide attributable to the actions of an individual or an entity (which includes emissions through their own energy use, but also from unforeseen emissions as well) over a period of one year.

So the aim is to work out your footprint, reduce your footprint, and then offset the remaining emissions. It’s much cheaper than buying solar panels, which still won’t eliminate your emissions, though it helps.

What does Carbon Neutral mean?

Being ‘carbon neutral’ means that you have calculated your carbon footprint, and then eliminated the Greenhouse Gas you produce by purchasing carbon credits to offset your emissions.

But being ‘carbon neutral’ takes a little more responsibility than just offsetting. To become carbon neutral, especially for businesses, you need to reduce your carbon footprint first, and commit to continue reducing your emissions.

Beware of businesses claiming to be carbon neutral. Check their accreditation, where they get their carbon credits from, and whether they truly are ‘green’.

Our Government Has Failed Us

We all heard the announcement this week that Kevin Rudd will be putting off the national Emission Trading Scheme until 2011. The good news is that he is proposing to increase our commitment to reducing our emissions (if the world agrees ...) to a 25% reduction of our emission levels in the year 2000. But at the same time, he is also giving away more freebies to big industries, to shut them up.

When is Mr Rudd going to realise that you can’t keep everyone happy all the time? What happened to doing what is right by our country, and by the world?

Whilst emissions reduction continues to be used as a political tool, nothing is going to be achieved. 

So, Australians will have to stop seeing themselves as world leaders. We are the worst country in terms of emissions per capita in the world - yes, even worse than the fuel guzzling Americans. We are followers, not leaders. Our government literally cannot make a decision to save us, and none of us will doing anything if the government doesn’t.

The problem seems so big to the individual, that it’s easier to blame the government, and sit back and wait for someone else to take action.

When will we start taking responsibility for ourselves and quit waiting for the government to lead the way? If millions of us make small changes, and take small steps to reduce our personal emissions, we will achieve something - more in fact than the government has managed to achieve, ever.