Monday, February 1, 2010

Cap and Share & Carbon Markets

Recently I have been in some discussions about the best way to create a Carbon Trading system for Biochar. There has been a heated debate about "Cap and Trade" and other mechanisms to ratchet down CO2 emissions -- and to try and decide what would be the best method of doing this.
Someone had noted that some people who propose for a carbon tax (*like Jim Hansen) had "probably the best arguments" because a tax would be "refunded equally to all citizens" and would be transparent. The argument was that the "transparency arises because it is simple to understand and simple to implement. This is a significant advantage, especially in that we need to act rapidly".
It was also argued that a tax is "cost effective". Cap and trade, where units of carbon reduction need to be "certified" for trust to be established in the market, "leaks a substantial amount of money to those involved in certifying the reductions and those involved in trading the certificates".
Because "Certifying GHG emission reductions in thousands of scenarios involving multiple greenhouse gases is a highly complex undertaking." While the people who do it are intelligent, skilled with complex detail, and deserve to be paid well, in the end, it becomes (essentially) "a tax on emissions" anyway ... but it "becomes less effective because a substantial portion of the leverage available is diverted" (to the task of certifying the emissions reductions).

For anyone who has taken the time to review “Cap and Share” – which is not at all the same as “Cap and Trade” – they should understand that the way Cap and Share is configured is much more closely aligned to the pure "Carbon Tax" scenario that is being advocated.
One should notice that the word “trade” is not used in the "Cap and Share" system.
This is deliberate. With “Cap and Share” there is no emission reduction “certification” required (and hence no money “leaks” to the emission traders), just like with a tax; and it is transparent, and it is very simple to implement and it means that the market can free up those “smart people” to “work on developing renewable energy systems”**, and it is Shared “equally to all citizens” (hence the name) – and finally, it is very likely to be far more “politically palatable” because it now opens up “free-market” mechanisms that allow for trading.

But the “trading” is not for carbon emissions reductions (i.e. “counting an absence”), nor does anyone need to keep track of a single molecule of carbon or CO2 -- because the trading that does occur is a trading of the “emission certificates” that the fossil fuel point-source carbon extractors must buy in order to mine the fossil fuels in the first place (there are only a few hundred of those types of companies around the world).

This now becomes much, much, much easier to regulate if and when it is necessary to do so.
Please review “Cap and Share” if you have not already done so.

** Now, if we come back to the issue of freeing up resources, a "Cap and Share" system should also be able to free up huge amounts of money. Money that could be used by those “smart people” to “work on developing renewable energy systems”.
I know that I (personally) would much rather be designing and testing renewable energy systems than spend my precious time getting myself involved in the highly politically charged “carbon trading“ game.

And it is a "game".
More and more these days I am starting to believe that we are simply playing "mind games" with each other ~ with money [and hence resources] as the “tool” by which to do it.
We are pretending that we can count an absence of CO2 molecules is part of that money game.
This type of game is played very well by the big trading houses like Morgan Stanley – but it is just a game of shuffling around money in a false “economy” and allowing certain people (those who control the playing field -- who control the "market") to skim money off the top.

But we are just “rearranging the chairs on the deck of the Titanic” as the oft-quoted phrase goes…
To make real reductions we must employ a system that is simple – and one that gets the money into the right hands; i.e. those who are actually implementing the change. Otherwise, we are just “playing on the margins”. And the big energy giants know it.***

*** And this is why they forcefully endorse “carbon capture and sequestration” (CCS).
The energy companies who effectively control the resources know that schemes like CCS will never be implemented. It’s not practical and it’s much too expensive and energy intensive.
So they play games with the public and with governments and the “moneyed class” to try and convince them that they have the technologies that can “reduce emissions” – yet they themselves are the source of the emissions in the first place!

They are playing a game because everyone is focused on the Carbon and CO2 problem; so their strategy is to focus on a “Carbon and CO2” solution.
But this is false [not only a false solution but the focus of our attention is false!].
We should not be looking for solutions to our problems by looking only at the effects of our actions (rising atmospheric CO2), but rather, we need to look at the real causes of the problem, which is rooted in the money system that controls the resources (and hence controls how much time and effort is spent within the “economy”; i.e. how much human activity is devoted to certain tasks).

“Carbon Markets” (as they have been implemented – i.e. attempting to track every molecule of carbon in the biosphere) is just a shell game. Especially since we are attempting to “Track an Absence” (of emissions).
While it does create huge amounts of “economic activity” ~ this activity is not actually “economical”!
It’s actually a waste of our time and efforts; which are both precious right now.
And by diverting our attention away from the real issues of energy and resources (and their inherent physical limits on a finite planet), we allow those who already control them to continue doing so (and make ever greater profits doing so).