Ethiopia: “cap and trade mechanism” is vital- PM Zenawi

Published 09/28/2007 - 7:29 a.m. EST

Jimma Time staff


Prime Minister Meles Zenawi said the cap and trade mechanism (CAT) is necessary for greener and “clean” development in Africa, during talks on global warming and on African perspectives.


During a panel discussion at the annual Clinton Global Initiative meeting in New York, Meles debated with former British PM Tony Blair, Hank Paulson U.S. Secretary of the treasury and United Nations special envoy on climate change, Brundtland, headed by NBC news correspondent Tom Brokaw.

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Opportunities in carbon trade regime

By BRUCE McKAY - The Dominion Post | Wednesday, 26 September 2007

The carbon trading structure announced by the Government last week appears to have meet with widespread support across most of the economy.

Predictably, the Greens are saying it's all too little too late, but the rest of the political spectrum has at least given a tick of endorsement to the plans put forward by the Government.

The phase-in over a few years gives the economy time to adjust to the changes in price relativities that pricing carbon will have.

The basic idea behind the carbon trading scheme is that the Government will allocate a set number of carbon credits to each industry free.

If the industry or a company within the industry expels carbon in excess of this number, credit will have to be purchased on the open market.

This is intended to make the price of carbon transparent to both the creators and users of the carbon credits.

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Fran O'Sullivan: Adventures in carbon trade

5:00AM Wednesday September 26, 2007
By Fran O'Sullivan

The Government's short-sighted decision to scuttle the Serious Fraud Office comes at a time when other countries are facing up to the new era of climate change fraud.

Let's put to rest here (quickly) the notion that this column will attack the basic science of global warming as a crock.

There's nothing to be gained from reopening that debate.

But there is good reason to question, based on the experience of the European countries that have already launched their own market, whether the proposed NZ emissions trading regime will perform to heightened expectations.

UK-based investigations into carbon trading have shown the new international market is a valuable hunting ground for new generation white-collar crooks, tax dodge specialists and ruthless companies which buy dubious offsets in Third World countries to assuage their corporate consciences without doing anything significant to reduce their own emissions level.

Energy Minister David Parker and his team have come down in favour of a cap and trade mechanism to curb the exponential growth in greenhouse gas emissions which New Zealand will adopt once legislation is passed.

The documents underlying the Government's announcement are illuminating. Greenhouse emissions are growing (NZ is now producing 25 per cent more than in 1990); per capita comparisons show New Zealanders produce nearly twice as many emissions as British people and five times as many as Chinese .

The energy sector has shown growth of 43 per cent; but, the real issue is the fact that agriculture emissions: methane and nitrous oxide are expected to grow to over 70 per cent above 1990 levels by 2012.

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Vikash Metal gets U.N. okay for carbon-credit project

Tue Sep 25, 2007 11:15am IST

MUMBAI (Reuters) - Vikash Metal & Power Ltd said on Tuesday it has received approval from a U.N. body for a carbon-credit project.

The company's waste-heat recovery captive power plant would reduce 55,000 tonnes of carbon-di-oxide equivalents a year, it said in a statement.

Under the Kyoto Protocol, developed countries can meet greenhouse gas reduction targets by paying poor and developing countries to make cuts for them, in a trade in carbon offsets worth $5 billion last year.

Each unit of carbon credit represents one tonne reduction in greenhouse gas emission.

Wal-Mart: Measuring Just How Green

The retailing giant launched a potentially groundbreaking initiative to measure suppliers' energy use. How hard will it push for change?

by Pallavi Gogoi and Moira Herbst

In a move with potentially far-reaching consequences, Wal-Mart Stores (WMT) says it will begin to measure the amount of energy used to manufacture and distribute some of its products, and it will launch a pilot project with certain suppliers to look for new ways to cut their energy use. The effort will begin with suppliers in seven product categories: DVDs, toothpaste, soap, milk, beer, vacuum cleaners, and soda.

The retailing giant announced the initiative Sept. 24 in partnership with the Carbon Disclosure Project (CDP), a nonprofit group supported by institutional shareholders that focuses on climate change and carbon emissions (BusinessWeek, 3/26/07). Wal-Mart says it plans to use the Carbon Disclosure Project's expertise to help set up the new program with its suppliers. "We are working together to measure our global supply chain footprint and to encourage our suppliers to reduce greenhouse gas emissions," said John Fleming, executive vice-president and chief merchandising officer at Wal-Mart.

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Chips down for a green trade-off

Ben Rooth
25/ 9/2007
IT was a gamble that could be a winner for the planet, as eco-warriors used poker chips to discover how they could potentially sell their greenhouse gas emissions.

Manchester is leading the way with the country's first workshop in 'personal carbon trading'.

It explores how ordinary members of the public can help reduce global warming through buying and selling the amount of greenhouse gases they produce.

The government is considering a personal carbon trading scheme which would see every individual allocated a set amount of greenhouse gas emissions - known as `carbon credits'.

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Global Warming: The Great Equaliser

Tuesday, 25 September 2007, 1:05 pm
Column: Adam Parsons

Global Warming: The Great Equaliser

By Adam Parsons , Editor ~ Share The World’s Resources (STWR)

As the latest summit to discuss a post-Kyoto treaty continues in New York this week, the single most revealing statement has already been spoken: “We need to climate-proof economic growth”. These few words, told to reporters by the UN’s top climate official, Yvo de Boer, during the recent Vienna round of talks, define the blinded establishment approach to tackling climate change.[1] Only if continued trade liberalisation and corporate profits are kept sacrosanct, remains the assumption, is it possible to consider even a broad agreement on future cuts in greenhouse-gas emissions.

With dire weather events and studies being reported on an almost daily basis, fewer sceptics are able to dismiss the reality of dangerous climate change. In the same week as around 1,000 diplomats, scientists, business leaders and environmental activists from 158 countries attended the U.N.’s Vienna Climate Change Talks, a top security think-tank stated that climate change could have global security implications “on a par with nuclear war unless urgent action is taken”,[2] whilst leading scientists warned of a looming “global food crisis” that will require more food to be produced over the next 50 years than has been produced during the past 10,000 years combined.[3]

The rapidity of these dystopian predictions has grown to Faustian proportions; the year 2007 already has the dubious accolade of witnessing the most extreme weather events on record,[4] as characterised by the millions of Africans just hit by some of the worst floods in a generation in which villagers were “wiped off the map”.[5] This summer, the collapse of the Arctic ice cap (losing a third of its ice since measurements began 30 years ago and “stunning” experts)[6] was topped off by the latest UN study from the Intergovernmental Panel on Climate Change (IPCC) who now believe that the tipping point for widespread catastrophe – involving a two degrees rise in global temperatures - is “very unlikely” to be avoided.[7]

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A perfect, green world

24 Sep 2007 08:30 am

More broadly, Econospeak's post seems to suffer from a subtle version of a fallacy that Will Wilkinson pithily summarized:

In the real world, the mind works like this, and this can lead to all kinds of problems. And in an extremely unrealistic abstract model of government action, its agents can easily and objectively identify problems and act to effectively solve them. So, let’s have the ideal government solve the problems of nonideal cognition.

It sounds stupid when you put it that way, doesn’t it? The trick is figuring out how to work with real minds, using real governments!

. . . so how are you going to do it? Most real government institutions are at least as kludgey and means-ends inconsistent as real minds are. “Silly, your sock won’t open that can of spinach! So try your pillow instead, because a model exists in which pillows are can-openers.”

In an ideal world, Econospeak says, cap-and-trade and carbon taxes may be functionally identical; the government will simply keep raising the price on the tax until it hits the carbon target. But in this vale of tears, where we have but the crumbly clay of humanity to work with, this doesn't function so well:

The real wonder here is that Mankiw could make such an elementary economics error as to suggest that taxes and cap-and-auction are “effectively” the same. In an uncertain world this is false. From a conventional benefit-cost perspective, Weitzman showed long ago that there were important differences depending on the slope of the marginal benefit and cost functions. Translated into common English, if we are uncertain about the long run relationship between the price of carbon emissions and the amount of emission – and we very much are – and if the risk of allowing too much climate change is greater than the risk of economic indigestion from trying to be too green – which seems pretty clear to me – then permits are the right choice. By controlling the number of permits we control our most important impact on the earth’s carbon budget, but allow prices to wander. By setting a tax we control the price but allow the amount of pollution to wander. That’s a big difference: you might say, given the gravity of what is at stake, that it’s the difference between ecological responsibility and irresponsibility.

See, the government can't be trusted to target the correct emissions level with a tax. That's why we should have the government target the correct emissions level with permits . . .

A more realistic model assumes that any American government will, to a virtual certainty, be more generous with either its tax or its credits than [Me + anyone to the left of Bill Clinton] would like. Under that scenario, a tax develops obvious benefits: it provides some mitigation even if permitting is excessively generous. Witness the recent debacle in Europe's greenhouse market where everyone issued too many permits and the price collapsed.

It's also politically and administratively more difficult to exempt special interest groups from carbon taxes than from cap-and-trade. Carbon taxes are also, obviously, much easier to levy on transportation than a cap and trade system, if for no other reason than that it obviates lengthy wrangling about fuel efficiency and which producer should buy the permits for the end-consumer.

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Buy your way to carbon neutrality?

By Alan Zarembo

Los Angeles Times

PREV of NEXT

Related

The Oscar-winning film "An Inconvenient Truth" touted itself as the world's first carbon-neutral documentary.

The producers said that every ounce of carbon emitted during production — from jet travel, electricity for filming and gasoline for cars and trucks — was counterbalanced by reducing emissions somewhere else. It only made sense that a film about the perils of global warming wouldn't contribute to the problem.

Co-producer Lesley Chilcott used an online calculator to estimate that shooting the film used 41.4 tons of carbon dioxide and paid a middleman, a company called Native Energy, $12 a ton, or $496.80, to broker a deal to cut greenhouse gases elsewhere. The film's distributors later made a similar payment to neutralize carbon dioxide from the movie's marketing.

It was a ridiculously good deal with one problem: So far, it has not led to any additional emissions reductions.

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US carbon trade lifts Climate Exchange results

London, 20 September: A booming US trade in voluntary carbon credits pushed Climate Exchange into profitability in the first six months of this year, the company reported on Wednesday.

The London-listed business, which owns the Chicago Climate Exchange (CCX) and the European Climate Exchange (ECX), made a pro-forma operating profit of £726,000 ($1.4 million) in the six months to 30 June, compared with a £1.9 million loss in the same period last year.

Chief executive Neil Eckert said: “Both contract volumes and membership on ECX and CCX have increased considerably… Demand across the globe for exchange-traded environmental products continues to grow at a rapid rate and we look forward to growing with that demand.”

ECX is Europe’s leading exchange for trading EU allowance futures. Volumes in the first eight months of the year reached 654,819 contracts, up from 256,852 in the same period last year, while revenues rose to £1.5 million from £0.9 million in the half-year.

However, growth on CCX made a bigger impact on the results. The exchange operates as a voluntary, but legally binding, cap-and-trade scheme for mainly US-based businesses. As in Europe, volumes on CCX have more than doubled since last year, to 11.8 million tonnes of carbon dioxide in the first six months of 2007.

But CCX revenues soared to £4.2 million from £1.8 million, and the exchange made an operating profit of £1.1 million – unlike ECX which lost £370,000.

“We get €4 ($5.6) for every 1,000 tonnes traded on ECX, but $10 for every 100 tonnes traded on CCX,” Eckert said. CCX also captures revenue from offset registration fees and other administrative fees, whereas ECX only charges for trading and membership and operates in a much more competitive environment, he explained.

The company also runs the Chicago Climate Futures Exchange (CCFE), which takes the lion’s share of exchange trading in US sulphur dioxide permit futures. The CCFE has launched this year futures contracts for an eco-stock index, CCX credits, UN-issued certified emission reductions and it recently announced plans for futures trading in catastrophe events.

Climate Exchange was listed on London’s Alternative Investment Market four years ago, with shares priced at £1.02 each. Today, its shares traded at £15.62.

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