All posts in carbon offsets

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    Peter Jones - September 8, 2014

    Setting a Price on Carbon

    How should a Canadian Government set a price for carbon? By legislation, such as a carbon tax? Or by a market based system, such as cap-and-trade ?

    In the 2008 Federal Election a majority of Canadians rejected a carbon tax proposed by the Liberal Party.  After this defeat, Jim Prentice, then the Federal Minister of Environment, announced that a carbon market was an important building block in the Conservative Government’s climate change plan.

    The market was based on a a cap-and-trade system.   The system would limit emissions of greenhouse gases but emitters would be able exceed the limits by purchasing offset credits to compensate for their excess emissions.  These rules were never finalized and the proposal was effectively dropped.

    In October 2010 Prentice resigned from the Government and joined the CIBC.  His departure was never explained.

    This weekend the Alberta Progressive Conservative Party elected Prentice as leader.  He will be the Premier of Alberta until 2016.  As premier he will be in a position to collaborate with other provincial premiers in the formulation of a plan to reduce GHG emissions.

    Last month those premiers re-affirmed their commitment to a clean energy strategy as a priority for Canada. They approved a Communiqué for the 2014 meeting of the Council of the Federation that stated in its conclusion:

    “Premiers agreed on the importance of being aware of the various emission reduction initiatives, ranging from Cap and Trade systems to carbon pricing and innovations, such as clean coal and other technologies. They agreed to take stock of such climate change initiatives and the economic opportunity of global action to address climate change at each of their future summer meetings. In spring 2015, Quebec will host a summit on climate change to which all Premiers will be invited to participate.”

     Prentice could convince Alberta voters that regulation of emissions from the tar sands is necessary as a part of a national clean energy strategy.  If so Prime Minister Harper could improve his government’s record on climate change by re-introducing a cap-and- trade system.

    He could justify the delay by referring to the recessionary climate at the beginning of this decade.  And, most importantly, he knows that he will continue to enjoy the support of Western voters.

    A surprising development, but don’t dismiss it as highly improbable.

    For more information on setting a price on carbon go to the Carbon Forum 2014.

  • Peter Jones - November 11, 2013

    Carbon Offsets

    Approximately 18 months ago 4RG reviewed web-based carbon offsets for airline passengers.  These offsets enable a passenger to “purchase” financial assistance for projects to reduce GreenHouse gas emissions equivalent to each passengers’s share of carbon emissions from the aircraft during the trip. In this way a passenger’s air flight has a net zero carbon footprint.

    As we are about to leave on another international air trip (the Far East via Bombay) an update on carbon offsets is timely.

    Since May 2007 the Air Canada Website has a page that allows purchase of carbon offsets.   As of September 2010 Air Canada passengers had paid $263, 042 for these offsets, or nearly $90,000 per year.  Approximately three years later the payments had risen to $306,866, an increase of approximately $13,000 per year.  Clearly offsets are declining in popularity.

    Read more

  • Peter Jones - January 1, 2013

    Environmental Limits to Growth

    Toronto-Dominion Bank reports that “Western Canada’s oil industry faces a serious challenge to its long-term growth. . .  Production growth will become constrained unless new pipeline capacity is built to access new markets. . . .  The flood of new shale oil supplies coming on stream in the United States, combined with inadequate pipeline capacity to move Canadian oil to the markets that most need it, has left Western Canada (and the Alberta oil sands in particular) with a glut of oil that has gutted prices.”

    These comments highlight the totally different perspective of environmentalists and oil company executives and investment analysts who focus on this industry.

    Environmentalists wish constraints on the extraction and marketing of oil. In this way emissions from fossil fuels such as oil will be reduced in time. Growth of industry profits is inconsistent with these constraints.

    Oil executives regard growth as the foundation of their business. As growth has been the pattern of the industry over almost two centuries, one might say that growth is really “business as usual”.

    The problem of reconciling two very different perspectives is difficult.  For lack of a better solution, many environmentalists would accept reconciliation based upon market principles as this has some prospect of acceptance by the industry. This market based solution could involve carbon trading or a tax on carbon.

    Oil executives would probably favour a tax on carbon.  The industry would be able to pass the burden of this tax along to consumers. This strategy would force governments to propose and collect the tax.  Unquestionably consumers would be far from accepting new taxes in a flat economy, although tax credits to individual tax payers could ensure that the impact of a carbon tax is neutral.

    Carbon trading is a more complicated solution that must be worked out by the industry and whatever regulatory framework would be required.   So far the attempts to establish a market basis for carbon trading have encountered problems, although these attempts are in the beginning stages.

    So there is some progress in “experiments” with both a carbon tax and carbon trading.  What consumers will accept is a “guessing game” for politicians.

    One of the most successful experiments is the tax on carbon levied by the Liberal Government in the Canadian Province of British Columbia.  This government is up for re-election in 2013, and the NDP opposition has made political capital out of criticisms of the carbon tax regime.   Regrettably opinion polls suggest that the government will be defeated, and this may mean scrapping the tax.  The opposition has not hinted what solution it would then implement.

    Environmentalists everywhere, and not just those in British Columbia, who are in favour of a legislated solution should keep their fingers crossed as Election Day approaches.

    For more on Carbon Taxes and Carbon   Trading go to

    Listen to the Critics!

    Carbon Offset Markets

     

     

     

  • Peter Jones - May 28, 2012

    REDD: an important acronym in the Climate Change world.

    When I first stumbled across the acronym REDD I did not know what it stood for.    Thanks to a web search I can share with readers that REDD stands for ~~“Reducing Emissions from Deforestation and Forest Degradation (UN)”

    There are two on-going activities that seriously undermine our ability to control climate change.  One – familiar to readers of ForourGrandchildren –  is the exploitation of the tar sands.  Canadians know – or ought to know – that over the next decades exploitation of the tar sands will generate very large GHG emissions. Yet this is the time frame for Canada to reduce its GHG emissions significantly. The exploitation continues, justified on the ground that the tar sands increase world GHG by only a small amount.

    The second, deforestation,  the target of REDD,  is serious business to climatologists.  Tropical deforestation is estimated to cause about one-quarter of anthropogenic carbon emissions, and is ranked the second largest source of GHG emissions.  Reducing emissions from deforestation could potentially be a highly cost-effective option for reducing climate change

    The difficulty is that reduction of deforestation impacts strategies of developing nations to create arable land for the growing of crops.  To induce these nations to adopt a REDD policy, the proposal is to link the reduction with a carbon trading scheme.

    The eloquent, passionate Bolivian ecologist, Pablo Solon, does not accept the emerging proposals for action on REDD. According to him:

    “Thus, REDD market mechanism, regardless of how inherently volatile and unstable it proves to be, will permit developed countries more time to continue polluting the world, while they are allowed to buy new forms of control over resources that rightfully should be in the custody of the peoples of the South. REDD illustrates many of the problems that are artificially created within carbon trading schemes. Other initiatives proposed under the paradigm of a Green Economy include the privatization of water, a push for agro-industrial business operations despite alarming impoverishment of small farmers channeled into these large-scale operations, the development of genetically modified organisms and geo-engineering amongst others.”

    His opinions are shared by others, including Wally Menne of Timberwatch, who claims that:

    “As currently conceptualised, REDD+ will mainly benefit the Northern polluters that caused climate change, with carbon traders and consultants following close behind. Community-driven efforts to reduce deforestation, prevent forest ecosystem deterioration, and restore those forests previously destroyed, need to be supported with long-term payments made by industrialised countries in lieu of their current and historical ecological and climate debt.”

    Canada will probably support present REDD proposals with the possible exception of the REDD market mechanism.

    As a matter of self interest, Canada’s forestry and resource industries are heavily committed to replacement of trees that are “harvested” or cut. The tar sands is presently a source of deforestation, but the oil industry is obliged to restore whatever areas have been exploited by strip mining techniques.  Here is the account of the restoration activities taken from the Canadian Association of Petroleum Producers Website:

    “For oil sands mines, planning to restore areas is done before the first shovel of earth is moved. Once an area is no longer needed for mining activities, we contour it for drainage; replace topsoil and plant vegetation, trees and shrubs. We then assess the soil and vegetation on an ongoing basis to ensure we’re achieving the goals of the original plan. The first area to be officially certified as fully reclaimed by the Government of Alberta was in early 2008.”

    Returning to Pablo Solon, his comments suggest that the same developed/developing country politics so damaging to progress at Durban will also de-rail Rio + 20.

     

     

  • Peter Jones - February 18, 2012

    Carbon Offsets Market

    “It is great to be here and to make a major announcement as part of the Government of Canada’s plan to combat climate change.”

    These are the words of introduction of a speech by Jim Prentice, then Minister of the Environment to the Economic Club on June 10, 2009.  In case the audience had not wakened to the importance of his subject Prentice continued:

    “Today, I am pleased to announce another important building block in our Climate Change plan – designed to help us achieve our targets to reduce greenhouse gas emissions and to generate real emission reduction opportunities across the economy.”

    The “building block” of the Government’s Climate Change plan was a carbon market for Canada.

    Canadian voters will remember that the merits of the various legal mechanisms to combat climate change were front and center in the 2008 Federal Election.  The electorate rebuffed the Liberal Party for proposing a carbon tax.  Prentice’s proposal to establish a market-place solution was consistent with the preference for free enterprise solutions of his party.

    Except it never happened! The major announcement (a plan to fight climate change) never materialized.  The building block was dropped like a hot potato.

    We don’t know the details of what led to Prentice’s resignation from the Federal Cabinet in 2009.  We do know that since he left the Federal Government has abandoned the promotion of a carbon market.  Canada lost an opportunity to encourage consumers to think about GHG emissions when purchasing goods and services.

    Despite the extensive work of the David Suzuki Foundation and the Pembina Institute to educate Canadian consumers on the value of these offsets, the use purchase of offsets has been sporadic.  For example, Air Canada offers a Carbon Offset Program on its Website. Air Canada chose Zerofootprint, described on the Air Canada website as a not-for-profit corporation, which sponsored three green projects into which funds for offset purchases would flow.

    The Air Canada Website program page information has been static for many months.   Today it states:

    Program results as of September 2010

    Since the launch of the program in May 2007, Air Canada customers have made a meaningful contribution to the fight against climate change by contributing thousands of dollars to carbon offset.

    Carbon offset purchases

    Tonnes of
    CO2 offset

    Equivalent to taking this many cars off the road for a year

    $263,042

    16,414 4,063

    Clearly the public interest in the purchase of carbon offsets has significantly decreased.  The Government’s suspension of its carbon offsets plan may prove to have been its burial.

  • Peter Jones - January 31, 2012

    Purchasing Carbon Offsets

    We are sailors and for nearly 50 years we have owned sail boats.  We spend our winters waiting for the warm days of summer to arrive so we can sail again. We have on three occasions chartered a yacht in the Caribbean with some friends to shorten our absence from the wind and waves.  This year the opportunity of a yacht charter to dream about presented itself:  three weeks sailing in the islands and atolls of French Polynesia.

    We know that flying to French Polynesia and back by air increases our carbon footprint by an enormous amount.  To be exact 13.2 tonnes for the two of us.  In the forourgranchildren blog “Recreational Air Travel and its Contribution to GHG” we have identified the dilemma that grandparents face in choosing air travel.  In our comments we said:

    “Grandparents regard travel as one of the principal ways to enjoy retirement. With the raising of health standards, grandparents are living longer.  They need constructive activity that will avoid the possible monotony of aging. There is a sense of entitlement: to whatever generation they may belong, grandparents worked hard, paid taxes to support their government and saved for their retirement.”

    So how did we reconcile our trip with the morality of increased carbon footprints? We purchased carbon offsets from www.less.ca. A purchase price of a carbon offset is invested to eliminate carbon from the atmosphere or to prevent carbon emissions in an amount equal to the carbon generated by our actions. The reduced carbon can result from green-power generation such as the construction of renewable energy sources, reforestation or carbon-reduction projects, such as the capture of methane from dairy herds.

    This purchase did not eliminate our reflection on the morality of the choice we had made. We found helpful analysis and comments in several websites.  One site asked the question: are carbon offsets immoral? Their answer:

     “It is simply not possible for the developed world to change its energy infrastructure over night or to overhaul individual lifestyles wholesale – and all of us in North America have a carbon footprint that outweighs what the global per capita average ought to be  . . . . A world where too much carbon dioxide has a price and sustainable behaviour turns a profit is a world where revolutionary change on an industrial scale is not only possible, it is likely.”

    Other sites disagreed.

    “One of the most distressing effects of the culture of offsets is the fact that . . .  [I]nstead of community empowerment, climate change is presented as a matter of individualistic morality and lifestyle choices that discourages collective political action.”

    Our decision was much influenced by the excellent study of carbon offsets , a joint production of the David Suzuki Foundation and the Pembina Institute.  After reading this study “Purchasing Carbon Offsets, a Guide for Canadian Consumers, Business and Organizations, we concluded that the purchase of offsets was the right thing to do.