Let's End the Sham of Carbon Credits and Create Real Regulations

One of the big lessons we've learned in class when it comes to environmental change seems to be that, "money talks." That's true when it comes to fracking, where it only becomes profitable to remove a well when a natural gas company is being sued from all sides; it's true in radical "eco-terrorism," where a company will really only change when they lose enormous profits from an act; and it's true in greenhouse gas regulations, where companies only have an incentive to change if there is some sort of monetary reason to do so.

Such is the tale of the carbon credits - originally hailed as a good first step in reducing the output of greenhouse gases globally. By offering various chemical and other production plants money (in the form of carbon credits) in exchange for reducing the amount of greenhouse gases they release into the atmosphere, it was thought that global emissions of everything from carbon dioxide to nitrous oxide to harmful refrigerants would decline. And they have, mostly.

Not long after the European Union and the United Nations introduced this plan, companies found ways of exploiting the system, often creating an "income stream that in some years accounted for half [chemical companies'] profits," paid for by yours truly, European taxpayers. How? Companies, primarily in India and China, have realized that by producing large amounts of the highest-compensated greenhouse gases, then destroying them, they could make tens of millions of dollars by being awarded carbon credits for destroying these harmful gases. It's a total scam, since for each ton of HCFC-22, the world's most commonly used coolant, that is destroyed, the company gets 11,700 carbon credits (they get 1 credit for each ton of CO2 that they don't pump into the atmosphere). They then sell these carbon credits to other companies that need to make up their lack of environmental consciousness and make record profits year after year.

Give this article a read: it goes over how the EU and the UN have responded, and how futile it's going to be. Though discouraging, I think it sheds light on the fact that real, enforceable, regulations are the only way to create actual, productive change in the realm of greenhouse gases. What do you think? Are monetary incentives good enough, or should we just insist that India and China bring their environmental standards up to our own?




(New York Times)