Carbon Trading / Climate Change – Updated

Alternet, one of my top political news commentary sources, set off a bonfire of controversy on the Alternet site with an article panning carbon trading.  I think Author David Morris (co-founder and vice president of the Institute for Local Self Reliance and director of its New Rules project) is misguided. Carbon emissions trading can be a valuable incentive to drive us in the right direction of reducing emissions by rewarding good environmental behavior. Morris notes the excitement over the “green” Oscars, then the controversy about Al Gore’s Nashville house that “consumed 20 times more energy than a typical house.” (A Gore spokesman responded that they buy offsets to render it neutral in carbon emissions.) The article details reasons Morris believes carbon trading is not the solution. Here are Morris’ reasons:

1. Buying offsets encourages complacency.
2. Carbon trading is inherently susceptible to fraud and manipulation.
3. Carbon trading encourages cheating and rewards low-cost cosmetic changes while undermining higher cost innovation.
4. Carbon trading separates authority and responsibility, undermining coherent, holistic community-based efforts.

With all due respect to Mr Morris, I think he’s wrong in the usual way: he makes “perfect” the enemy of the good. While Morris makes significant points, I believe there are fixes to all of his points that will be far more palatable to Americans and especially to business, than Morris’ solution, which is basically severe regulation without financial incentive. Forget offsets, he says, and just force business to clean up its act. Yes, regulation works, and Morris points to unleaded gas and fluorocarbon regulation as successful examples. But big business owns the media now, and Americans seem to buy the line (plus hook and sinker) that what’s good for business is good for them. Business interests would mount a ferocious and almost certainly successful attempt to scuttle any all-stick, no-carrot regulatory proposals.

And I have to take issue with Morris’ insistence that carbon offsets, if allowed, must be local. True, it’s best if a polluting utility in Denver offsets by doing something that improves the air in Denver, but from a global perspective (sorry, Denver), planting trees in Indonesia or Africa, or wind farms in California is still a pretty good idea.

If read the article, be sure to check out the comments, some of which effectively counter Morris’ viewpoint. It’s also distressing to see in the comments, the ongoing denial by some that carbon is even an issue.


One response to “Carbon Trading / Climate Change – Updated

  1. David Johnston

    The arguements beg the problem and a viable solution. The problem is no one has any idea of how much carbon their lifestyle produces. We may dream of off setting our jet travel but every purchase decision we make has a carbon footprint. So the solution to the problem is feedback. Unless you are able to measure your impact you have nothing to guide your future behavior. Feedback starts with measuring what you do, buy and sell, and having a “dashboard” that gives you feedback in real time. If you are doing better than the average American you should be given incentives for good behavior. If you are doing worse you should have options other than selling your house, SUV and worldly possessions to abate your carbon impacts. Humans have traded commodities since they stood upright. They have also gambled. Playing poker with chips is much more fun than playing without them. Measuring carbon and trading it with others is a way to find an equilibrium in a community or a country. When combined with a cap and trade public policy, the caps reduce the total amount of carbon for a city, a region, a state or a country. That is how carbon is ultimately reduced. One without the other is doomed to failure. Currently the economic system provides incentives for all the wrong industries. By creating incentives for reducing carbon generating behavior we can start to at least create parity. Then we can spend the years it will take to change the tax code that is controlled by politicians who are controlled by the industries that have the benefit of the current incentives.

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