Nip Impressions logo
Fri, Oct 28, 2016 15:38
Click here for Pulp & Paper Radio International
Subscription Central
Items just for you
New publication added! Advertising Arguments 2015 book
My Profile
Management Side
Technical Side
What are carbon credits and what do they do for us?

Week of 16 Feb 2009

Click here, then click "Trans lator" in top navigation bar for other languages.

P. T. Barnum is attributed with saying "There's a sucker born every minute" although, he, as the source of this quote is in dispute. Were he alive today, I suspect he would abandon the circus business and jump into carbon credits and carbon trading.

Carbon credits appear to have their genesis in the Kyoto Treaty and its focus on greenhouse gases. The theory is someone can build a something that produces less carbon emission than some other something and sell the "savings in carbon emissions" to someone else who can't or won't reduce their own carbon emissions. On a formal level, governments recognize this activity and on a retail level, you the individual can buy carbon credits to assuage your guilt for polluting.

So, supposing you want to buy some carbon credits, where do you go? Well, since last summer, JP Morgan has been selling carbon credits obtained from promulgating a new type of cook stove in Uganda. We are not talking about large cook stoves here; we are talking about a device that cost the locals about USD 6.00. It looks like a large tin can with some holes cut in it. However, someone somewhere has figured out that the new cook stoves vs. the old cook stoves (I can't even imagine what they were--a tin can with holes in it seems pretty near the beginning of the industrial revolution to me--Napoleon took tin cans with him on his assault on Moscow, 1812) reduce carbon dioxide emissions by two to three tons per year, a credit JP Morgan can sell for $10 to $15 per ton. And the US government had to bail out the large banks like JP Morgan because they were unprofitable??

I have a better idea, claim carbon credits for all Ugandans killed under Idi Amin's dictatorship in the 1970's, after all they don't produce any carbon pollution any longer.

Ok, that was a bit of a rough statement, but I am trying to make a point. The Kyoto Treaty no doubt was trying to produce an honorable solution to what is perceived to be a real problem, anthropogenic pollution. However, there are some major holes in this entire scheme.

First, carbon credits are based on the savings of one activity versus another. From a logical and philosophical point of view, this cannot be measured without an argument. "Savings against what?" is a question of endless debate. For instance, should the Amish earn carbon credits for not using electricity? There are enough Amish that their abstinence from electrical consumption should be a significant matter when it comes to measuring carbon dioxide emissions. If one counters this with, "Well, they have always lived this way, there is no savings" one implies that savings has to be against a certain behavior before a certain date. However, if a windmill farm did not exist and now does, why does it generate credits when the Amish don't? If the Amish vote to use electricity this Sunday and rescind the vote next Sunday are they now eligible?

Methane from animals is considered a big pollutant. Fifty years ago, the whitetail deer population in the United States was at its lows for all times. Through good conservation practices, the deer population has exploded and they have become a nuisance. Should the automobile driver that hits one of these flatulent pests or the hunter that shoots one earn carbon credits? After all, humankind's efforts to restore the deer population could probably be considered a form of anthropogenic pollution. Or maybe we should shoot all the polar bears (or moose, or whales, or...).

And once you solve these thorny problems you have one of audit and accountability. Who says how many new stoves are in Uganda? Who monitors the cooking processes used by the poor housewives of Uganda in order to certify that two to three tons of carbon emissions are saved each year? Perhaps that is where JP Morgan got in trouble--they had to move a Vice President to each village as a monitor and flying in their sushi ate up the profits. Or perhaps cut out the stoves altogether and have the Ugandans eat cereal and give the carbon credits to Kellogg's or Weetabix. One can easily see how silly this becomes.

On a large scale, there is an auditing protocol. The validation process is called the Clean Development Mechanism according to the United Nations Framework on Climate Change. Grandpa Jim is highly suspicious.

Please note that not once have I said in this column it is a bad idea to reduce one's carbon dioxide emissions. In fact, it is probably a good idea, even if you don't believe in anthropogenic pollution. But, wow, we have got to get the process right. I am highly suspicious the current mess is putting lots of money in some sharpies' pockets without doing anything for the planet.

I am glad no one has (yet) come up with the idea of trading "safety credits"--you know, if you want to be unsafe you buy credits from safe operations to offset your lousy record. Safety is real, it can't be traded away.

Be safe and we will talk next week.


Printer-friendly format

Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: