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Carbon trading has problems

By Valerie Yule - posted Thursday, 5 March 2009

Carbon trading has been the focus of nine On Line Opinion articles since December 2005, setting out facts and arguments, pro and con, that policy makers could keep in mind.

Carbon trading benefits farmers who are paid to plant or to protect “offsets” and overseas countries likewise. It also benefits big polluters who can pay to continue polluting; many beneficiaries who gain jobs and profits (“Here's How To Get Your Piece of the Profits in the Early Going”) in brokering, administering and financing schemes; and governments who need to appear to be doing something, with all the Byzantine planning needed to get a carbon trading scheme in place by - when is it? 2010? 2020?

But faith in global carbon trading might, perhaps, be as misled as our recent belief that financiers knew what they were doing. Governments are urging consumption and “jobs” regardless, to prevent “economic suicide” now threatened largely as a result of financiers’ bungling.


Instead it could be more far-seeing to emphasise paying for, and promoting, the jobs and products that are needed to mitigate and protect against economic suicide from climate changes. Wastefulness is not essential for economic prosperity, and it is one of the root causes of half our emissions.

So much attention to carbon trading is a diversion from the urgent preparations that could be made to tax carbon emissions, stopping waste in all its forms and at every point, and promoting the administration, jobs, businesses and profits that are needed for sustainable infrastructure, commerce and households.

The ability for some companies to “offset” their continuing emissions may in fact be problematic rorts and be impossible to fully check out.

Many scientists have been warning that environmental changes are likely to be speeding up, and disasters may come faster than expected. The recent bushfires show what greater speed can mean. The winds were faster, the fires more intense. Preparations for fires of less ferocity could not prevail against what happened.

There were also examples of preparations that saved lives and even property. So did the fortunate people who had made similar preparations but never had to face the fires regret making those preparations because they were not needed this time? I think not.

So it is with preparations to try to prevent or mitigate climate changes. We need not regret them even if the sceptics are proved right. Even if it turns out the preparations are not needed, the economy need not suffer, jobs need not be lost, quality of life need not deteriorate and resources will be saved for the future. Carbon taxes can always be cut. However, dismantling a global carbon trading system once set up could be as difficult as reforming the stock exchange.


On Line Opinion and its forum discussions since 2005 represent the many facets and opinions, pro and con, on this urgent topic of carbon trading:

  • "The simple-minded politics of international action on climate." Branding emissions trading a “loophole”, they want us all to adopt “government knows best” approaches. Nicholas Gruen, CEO of Lateral Economics and Chairman of Peach Discount Mortgage Broking. December 23, 2005.
  • "The biggest game on Earth." Carbon trading is just around the corner, conservative green politics has arrived. So what will carbon-trading look like, and why do so many companies want it? Paul Gilding, of Easy Being Green. February 14, 2007.
  • "Practical realities of carbon trading." And the various difficulties involved, not least being measurement and certification. A conservative view. Des Moore, Director, Institute for Private Enterprise and a former Deputy Secretary, Treasury. April 27, 2007.
  • "Carbon trading - the Chinese report card." There are lessons to heed from the world's single most expensive carbon emissions trading deal in China. Dr Charles Worringham, Queensland University of Technology. September 5, 2007.
  • "Wake up Australia." For ordinary Australians, finding a better balance between economic and environmental considerations provides the ultimate test of our liberal democracy to uphold our ability to promote progressive policies. Let us not allow the debate to wither away to allow petrol prices or large industry sectors to be immune from environmental taxation. Chris Lewis, research assistant, Australian National University. July 10, 2008.
  • "Too much faith in the market." Why then do we suppose that an emissions trading system will work? Sharon Beder, University of Wollongong. July 18, 2008.
  • "Climate change, carbon sequestration and Tasmania." While the onus to reduce greenhouse gases lies mainly with the direct generators of GHGs - notably the coal and oil industries - forests can play a crucial role in mitigating climate change by sequestering carbon. Wood is substituted for more carbon-intensive products such as steel, concrete. More about Gunn’s pulp mill, and whether carbon trading will prove successful. Fred Gale, School of Government, University of Tasmania. August 28, 2008.
  • "Calculating the emissions from a 'Standard Cow'." A carbon tax on agriculture is one of the more stupid aspects of the rush to set up emissions trading in carbon dioxide. Tom Quirk, Board of the Institute of Public Affairs, former chairman of a biotechnology company and Deputy Chairman of Victorian Energy Networks and a director of Biota Holdings Limited, plus 15 years as an experimental research physicist and Oxford don. December 2, 2008.
  • "Emissions trading: getting the balance wrong." Two roads can get us to a comprehensive climate change policy deal. One targets production of emissions. Another targets consumption. Geoff Carmody, co-founder of Access Economics. January 29, 2009.

Other sources:

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About the Author

Valerie Yule is a writer and researcher on imagination, literacy and social issues.

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