CARBON TRADING

Aino Efraimsson
Asami Tanabu
Larri Himma
Anastasiia Kostrytsia
Alejandra Valverde
Manoj Bhusal
Laura Delgado Ortiz

History of Carbon Trading

Main aims:
DEFINITION
OF CARBON
TRADING

-Social
-Environmental
-Technology
-Political

Critiques and
case studies

A HISTORY OF CARBON TRADING:

1992 the UN Framework Convention on Climate Change (UNFCCC)

1997 The Kyoto Protocol is adopted
1998 the EU begins to develop an internal emissions trading scheme
1999 The World Bank sets up a Prototype Carbon Fund (PCF)
2001 The US withdraws from the Kyoto Protocol

THE KYOTO PROTOCOL

PROTOCOL::
- 16.02.2005: it came into force.
- It was ratified by 127 countries
responsible for 61 % of global
GHG emissions
- It binds 38 industrialized
nations to reducing their
emissions an average of 5.2 %
below 1990 levels by 2008-2012.

2008--2012 emissions targets:

2008

New credits from Kyoto Protocol project mechanisms:

- CERs* from Clean Development Mechanism (CDM)
- ERUs* from Joint Implementation (JI)
Development of the International market
Development of mandatory cap & trade schemes
outside of Europe : Canada, Australia, Japan, United States

CARBON TRADING APPROACH WAS

MADE IN THE USA:
(Michael Zammit Cutajar )
1960s, the pollution-trading

mechanisms of the Kyoto Protocol

were of a type proposed by North
American economist.
1970
1970--1980s, put into practice in US
markets for lead, nitrogen oxides and
sulfide dioxide and other pollutants.
1990s, successfully pressed on the
UN by the US government, advised by
US economists, US NGOs and US
business.

WHAT IS CARBON TRADING?

THE STORY OF CAP &
TRADE:
http://www.youtube.com/watch?v=p
A6FSy6EKrM

There are two kinds:

I. Emissions trading (or cap and trade)

II. Trading in projectproject-based
credits (carbon offset carbon credit)
+ hybrid trading systems (it is some

difficulties in equivalences, mixing in economics)

 Measuring emissions,
accuracy and problems.
Limits of the so called
innovative quick fixes.
Non-carbon technology
and long-term efficiency,
a way forward?

An example from Uganda:

something is not always
better than nothing!
nothing!

Survival emissions
vs. Luxury
emissions
Do we have a choice?

SPECIAL PROBLEMS OF CARBON

PROJECTS:
SPECIAL CREDITS AND CARBON-SAVING
PROJECTS
Carbon-sequestering projects and the building
of dump
dump extensions.
extensions Entitles big polluters to
emit more greenhouse gases than they have
emissions allowances for.
2 kinds of dump extensions
Difference between measuring carbon
credits and measuring emissions.

PLANTAR: CARBON PROJECT IN BRAZIL

- Carbon project in Minas Gerais

Producing imaginary
carbon commodities.

- What is Plantar
S.A?
- Some information about the
Plantar project and its connection
to the World Bank. Plantar
arguments to receive carbon
credits.

- Where the support to Plantar comes

from? Local communities vs. World
Bank.
- The role of the FSC (Forest
Stewardship Council): Authorizing 18%
of Plantars operations and how this
information is used by Plantar.
- Some conclusions about the Plantar
case

Moral hazard: tendency to take undue risks

because the costs are not borne by the party taking the risk
In the case of Plantar it has to be very careful so no
incentive can be provided to avoid the doing of something.

PROPERTY RIGHTS AND

PRIVATIZATION:
Trade requires
ownership.
State owns emission
allowances and sells or
gives them for free.
Not property rights but
allowances.
Allowances are still very
close to property rights,
permanent or not.

Decisions about the

carbon trading are a
huge target of
lobbying.
Governments are
balancing between
countries economies
and the environment.
Too many allowances
handed out in the
future as well?

Are all carboncarbon-saving projects really good?

- Question of social and cultural impacts
- Question of measurement

CASE STUDY:
SRI LANKA

Installing solar-home systems with

remote households without electricity
in Sri Lanka

- Background :
- Target: Off-grid community from Tamil minority.
- Industry: Dependency on tea and rubber plantations
- Privatization of Plantation:
- Increasing global competition
- Lower production cost, increasing productivity
- Increasing wages obliged by government

Results
Only 35 solar systems were
installed out of 63 families and
7 Sinhara workers.
Why the project failed??

1. The project supported the Semi-slavery structure

in plantation. They reinforced the plantations control

over workers.

2. The project led the inequality and social conflicts

emerge in the area.

Other features about the project:

The plantations motivation is to increase
productivity and labour regulations.
Conflict between the Tamil ethnic minority and Sinhalese
majority.
(Benefitted)
(Marginalized)
Local politicians regard the solar system as threat for their
power.
The projects give excuse to the local electronic company
for not extending the grid.
The estates exclude retired workers and their families
from the target.

WHAT CAN WE LEARN?

Carbon trading itself is a
good start, but it is not a
fundamental solution.
Consideration of localness.
What is success for
carbon-saving projects?
Are there any different
interpretations of success?

THE ENVIRONMENTAL AIMS OF

CARBON TRADING:

The reduction of carbon

emissions

A better environmental
situations and the extension
of the Climate Changes
effects.

Mitigate Global Warming

CARBON TRADING AND THE

EFFECTS ON CULTURE:
Make people and
companies to take
conscience about
global warming

Include developing
countries in the
decrease of carbon
emissions and
improve their
situations

There is more awareness BUT people

forgot to think about the welfare of the
countries that were supporting their
carbon credits.
The carbon trading decision turn in a
very dangerous way of getting carbon
credits that translate in other
problems for the world sustainability.

Lack of real improvement. The is not a real respect

for the countrys sovereignty and main features.
The carbon credits companies insist on affirming that
the lands were not used, not part of the economy of
the country and that people did not know how to use
them.

HOW DOES CARBON TRADING

COLONIZATION WORK?
WORK?
1. The carbon credit
production
companies locate an
extension of empty
land that may be
useful for plating
trees.

2. These companies
build a population
inclusion program
and buy the land and
the workers to plan
and take care for the
land for the next 100
years or more.

From the
Netherlands to the
Andes: the
Ecuadorian situation.

3. Years after, the

population does
not have any more
money to maintain
the plantations
and try to finish
the contract,
ineffectively.

NO SILVER BULLET:

The reorganisation of
society away from fossil
fuel dependency:
Land use planning
Improving public transport
systems
Increasing renewable energy use
and energy efficiency

Subsidy Shifting
Conventional Regulation
Green taxes

ENABLING SUSTAINABLE
BEHAVIOUR:

Land use planning

Mixed use areas
Public transportation systems
Encouraging energy efficiency and renewable energy use

CARBON TAXES
Existed internationally for
20 years
Aims:
a) Reduce GHG emissions
b) Raise revenue
c) Change consumer
behaviour

Revenue:
a) Carbon mitigation
b) Individuals- reducing
income tax
c) Supplementing Gov. budget

Critique-regressive
Critiquetaxation

REFERENCES:

Kevin Voigt. TROUBLES AHEAD? World Business April 20th 2011. Available at:
http://app1.hkicpa.org.hk/APLUS/0904/Carbontrading.pdf
Jitendra Kumar Singh CLEAN DEVELPOMENT MECHANISM (CDM) AND CARBON TRADING
IN INDIA Available at:
http://www.tce.co.in/Downloads/bro_pdf/papers/cdm_carbon_trading.pdf
http://www.opposingviews.com/arguments/carbon-trading-is-aimed-at-the-wrongobjective Presentation. Carbon trading: history and stakes. BlueNext, 22nd January 2008.
Christian de Perthuis - Mission Climat
http://www.google.com/search?sourceid=chrome&ie=UTF8&q=Carbon+tradinghistory+and+stakes#hl=ru&sa=X&ei=JuR0T77OOoUOvCT3doN&ved=0CBoQBSgA&q=Carbon+trading+history+and+stakes&spell=1&bav=on.2,
or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=a09b2f23fcc77c02&biw=790&bih=380
Sonja Butzengeiger, Axel Michaelowa in Intereconomics (2004). The EU emissions trading
scheme - issues and challenges.
Tierra resources. http://tierraresourcesllc.com/industry-facts/
Steven Sorrell. 2003. CARBON TRADING IN THE POLICY MIX. Oxford Review on Economic
Policy. Available at: http://oxrep.oxfordjournals.org/content/19/3/420.short
Henrik Hasselknippe. 2003. SYSTEMS FOR CARBONTRADING: AN OVERVIEW. The Fridtjof
Nansen Institute, Norway. Available at:
http://www.sciencedirect.com/science/article/pii/S1469306203000986
Laurance, William. 2006. A New Initiative to Use Carbon Trading for Tropical Forest
Conservation. Available at: http://onlinelibrary.wiley.com/doi/10.1111/j.17447429.2006.00229.x/abstract;jsessionid=C89E4AD79D29285E0E35D5F08A800471.d01t03?
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