CARBON TRADING

Carbon Trading - the basics

Carbon trading is an exchange or trade of carbon credits in the world wide business market. The idea behind is that businesses and industries producing more than specified amount of green house gases have to pay for it. This will then tend to reduce the greenhouse gases that cause climate change.

These financials are then used to facilitate solutions for global warming. Since most of the pollution is because of carbon emission - carbon dioxide and carbon monoxide, which is worse than CO2 for greenhouse effect - measures are taken to lessen amounts of carbon emission, among which carbon trading is a controversial recently devised process.

Governments and organizations are highly responsible for the emission and control of harmful gases so the government of almost every country has set a criterion for businesses and industries to produce carbon. This criterion is in the form of allotment that can be purchased by businesses.

This allows a business to produce carbon in a fixed quantity. When a business exceeds its allotment limit and still wants to produce carbon it has to buy carbon credits from a non polluting business such as a company or a country.

There are some pros of carbon trading:

• Carbon trading gives financial grounds to reduce global warming.
• Easy to be implemented by governments on small to very large scale.
• Companies which produce higher level of carbon emissions do not have to shut down their processes all together and they can continue by just borrowing carbon credits.
• Small businesses who do not exceed emission limits can make some money through selling their carbon credits.

However, there are really serious drawbacks as well:

• There is no organized framework for carbon trading system globally.
• Local companies are unable to participate in international trading system.
• Small scale industries often don't have enough expenditure to manage their emissions or to purchase sophisticated techniques therefore have to pay for producing carbon.
• Big enterprises purchase carbon credits, increase cost of their products, in other words forcing customers to give them their money back.
• Buying and selling of carbon credits does not help to reduce the emission of gas i.e. net effect is same.
• Large businesses keep on polluting more and more still claiming that they are playing their part in the fight against global warming.
• Small companies being paid repeatedly for green house gas penalty often fail to compete with large organizations. Getting a license to pollute atmosphere seems to be an absurd idea.

Carbon trading could be a way to control carbon emission but it should not be considered as an ultimate one. Instead of spending money on trade of poisonous gases and permits to produce more, companies should spend their revenues on environment friendly matters like saving green life, planting more trees, installing equipments to reduce carbon emissions etc.

The other thing is no one has planned out the consequences. The new carbon storage and sequester (CSS) systems to scrub CO2 from waste power station and industrial gases has not been invented yet. And if it worked, then all the stored carbon has to be moved about to a permanent storage site. It has been calculated that this weight of carbon is more than that moved by most industries, and would also cause a huge increase in transport costs.

So (say) coal - carbon - is burnt in a power station - the carbon emitted is stored somehow in the chimneys - and then this carbon (ex coal) has to be stored somewhere. Back in the ground?

So why not move to lower carbon energy directly?

Carbon storage as a system is bound to collapse in the next few years as it is an unworkable and incomprehensible system that only bureaucrats looking for a fudge, and wanting to do nothing, would ever promote.