The Carbon Credit Scam

There are some good reasons to see the Kyoto based carbon trading system as a carbon credit scam. These reasons put the while process of Certfied Emissions Reductions in a poor light and reveal a possibly fatal flaw in this approach to the problem of greenhouse gas emissions.

Carbon Credit Scam: The Initial Awarding of Credits

The Carbon Credits initially awarded to industries were as a result of reductions in emissions based on estimates of those emissions prior to the agreement. The problem is that these estimates were prepared by the companies themselves, which resulted in extensive over-estimation of their emissions. These companies then claimed to have cut emissions and were awarded credits. In some cases there was no change in emissions at all.

These credits then gave the companies that earned them the right to pollute more than they were already doing, so in this system the companies may actually be producing more emissions than previously while still abiding by the Kyoto agreement.

Carbon Credit Scam: Projects That Attract Credits

Awarding credits for projects that reduce greenhouse gases in an excellent idea, but in order for this to be effective the projects need to demonstrate real Carbon Dioxide removal from the air. Hydroelectric energy projects have been awarded carbon credits despite being well known as sources of the very potent greenhouse gas Methane. Othder sources of credits are reduction in land clearing and protection of old growth forests. While these are both commendable, they do not reduce the amount of CO2 in the atmosphere but just don't add more to it.

The idea of allowing a factory to produce more emissions simply because a government decided not to bulldoze some trees is absurd.

Carbon Credit Scam: Incomplete Coverage of the Protocol

While a great many developed nations have signed up to the Kyoto Protocol, not all of these nations have the capacity to enforce the regulations they have agreed to. The governments of developing nations face serious challenges in terms of law enforcement, including ensuring that companies adhere to environmental standards. This will result in heavily polluting companies relocating some of their industry to these nations where the standards cannot be readily enforced.

Carbon Credit Scam: The Problem As The Solution?

Current economics is based on a model of continuous growth. This is reflected in the stock market, where companies that show strong growth are the most desired assets. This obsession with continual growth is also reflected in global energy consumption, which is also increasing continually. This results from increasing energy demands from manufacturing, as well as an expectation in developed nations for a continuing rise in the standard of living.

Clearly the problems of greenhouse emissions cannot be solved if we are forever increasing our energy usage. As long as we hold the view that continual growth is necessary, consumption of raw materials and therefore pollution will be an increasing problem. For this reason it seems somewhat foolish to link such a critical issue as emissions control to the economic model that caused the problem in the first place.

Voluntary Emissions Reductions

These projects are perhaps the best hope for real emissions reductions. Genuine small scale tree planting projects, alternative energy production and environment rehabilitation not only help to reduce overall Carbon Dioxide levels, but if done correctly also enhance the natural environment.

Such projects are the real face of emissions reduction. Their focus is on action, not on endless economic growthat the cost of the environment.