As a good environmentalist looking to see how money can be persuaded to restore the global ecology rather than degrade it further, I spent all day yesterday at the Carbon Show. This annual shindig is run by Michael Heseltine’s Haymarket Publishing and a good sense of the issues handled was discernable by spending ten minutes at their book stall. Much business accounting, building efficiency, computer modelling and monitoring ….. and carbon credits.
Twas the latter that I sought greater understanding of, so as to grasp better the manner in which it remains so difficult to coax bodies to invest in reafforestation. As I see matters humanity has to tackle the accumulated environmental problem both by drastically reducing the current rate at which we are burning fossil fuels and by removing the excess atmospheric carbon dioxide in the only manner we have, namely by replanting a good portion of our missing forests.
Whereas the former will reduce the rate at which the levels of greenhouse gases increase year on year the latter brings levels back towards a balanced and sustainable situation. As I’ve shown elsewhere, around 60 to 70 parts per million of CO2 could be drawn down to terrestrial storage were this policy adopted comprehensively. By this I mean that the carbon will remain within the biosphere and not be lost to ocean flows and other permanent carbon sinks. Simply, it maintains an ecologically carbon rich situation, buffering well against future environmental change. A Gaiist strategy, one might say.
I went with a potted history of “Carbon offsetting” in my head, plus sundry research that I’ve done in recent years. At the Centre for Alternative Technology, CAT, five of six years ago there was a talk and discussion over how the initial idea had been conjured up as a sop to the consciences of “Westerners” troubled by their own easy use of excessive quantities of fossilised carbon, in the era of impending climate chaos. As measurements of atmospheric carbon inexorably crept up, year on year, and as a growing voice in the relatively orthodox scientific community expressed concern at this profligacy, “Offsetting” was launched as a means to make recompense and direct some of your cash towards carbon capture schemes. Planting trees, in other words.
Initially this was in the developed world but it crept into light that monies collected were being used to “fund” forests which were being planted anyway under reasonably generous existing grant and tax deduction regimes. Embarrassed, the fledgling offsetting industry quickly turned their attentions to third world/developing world situations and set to establishing forests in Africa and India and wherever else they could find. Why they did this it is actually quite hard to assess now but the move was doomed from the start.
Well, if you can’t keep tabs on Terry Wogan type conifer plantations in Scotland what chance have you of monitoring mango forests near Madras or native tree plantations in Tanzania. Sheepishly the offsetters refocused again, knowing that if they failed again that would be it. This time it had to work.
As referred to above there was another avenue. This time it was resolved instead to pledge offset money to prevent an equal amount of carbon being released into the atmosphere by another operator, somewhere else on the planet. Over time this has become the manner in which the developed world has chosen to address the issue of offsetting. But it’s become a lot more complicated!
Whereas at first it was OK to install efficient boilers and double glazing and so on at home at the same time the developed world was setting up mechanisms to persuade its commercial and public sector industries to rapidly reduce their carbon release. A series of international conferences set up increasingly tight conditions under which this was going to be achieved. Carbon credits were to be introduced under a system through which carbon release was to be allocated per unit of production.
If a company was deemed to be reasonably releasing, say, X tonnes of carbon per annum they would be permitted that release. If through tightening up their procedures they managed to reduce their carbon release, clearly and in demonstrable manner and established as long term systemic change, they could then sell on that amount of their carbon release permit they no longer required. To whom? Why to a company which required to release carbon above their allocated level.
It takes little time to realise this does not reduce carbon release, just moves it around. Much industry moved out from Europe and America due to clauses which had, anyway, exempted developing countries from the regulations. So, again, adjustments were drastically needed. Now carbon release credits could be earned by creating carbon reduction in developing countries on a quid pro quo basis, policed through mushrooming agencies and monitoring companies which sprouted up.
More recently the developed world has been obligating carbon efficiency and a lot of progress has been made. Simply the business community has been convinced that to combat rapidly increasing costs it makes great business sense to reduce energy use to a very minimum. Credits are of far lesser importance than substantial cash savings to be made, as heating bills are halved and aging machinery replaced by modern, efficient designs.
But there still exists an offset market and there are carbon reduction credits awarded. Nowadays it also works in reverse so that, if you reduce carbon use somewhere this can be assessed and a tradeable certificate issued. It is taken to a Credit Registry where it can then be assigned to a purchaser, and so “retired”. Current rate is about £15 per tonne of carbon per annum per annum. This is deemed to be rather too low to be relevant to forest establishment as it cannot cover the costs. These costs include a whopping 40% deemed as insurance towards the success of the establishment project. I could not ascertain whether it would be released twenty years later, but I rather think not.
To increase the worth of your certificates, you should build in “additionality” in terms of benefits other than carbon capture. Local community advantages, food crop like mangoes, brazil nuts or other forest products, ground stabilisation, biodiversity, windbreak and water retention, building materials, historical connections, tourism and any other imaginative use for the woodland folk can come up with!
Location is also important as it is considered far more valuable if it is in the less developed category B countries (Termed “Non annex 1 countries”). These include China, bless them, which might go some way to explaining their planting 49 billion trees. Eventually your project is issued its certificate, with its assessed value, and it can be sold. Presumably to a polluter or someone benevolent who just wishes to retire your certificate.
I am unclear as of now, how the market in carbon is actually operating. What is this £15/tonne? Why and how does this get driven up or down? I am sure that enlightenment will be forthcoming in due course. Meanwhile I’m left with the sad reality that woodland is too expensive to be entertained as an option by most companies wanting to drive down their carbon profile.
Companies are still obliged to reduce their carbon use.
Some companies cannot get down to their designated target. Maybe for some it goes down year on year and so they have to find extra ways to achieve this. If they can’t achieve their target they have to buy absolution in the form of carbon credits. What forces create the price? Is it the relative cost of, say, insulating someone’s loft? Fitting Granny a new boiler? Buying Juanita an efficient wood stove for her tortillas?
Whatever, the forests, even the most socially, economically and environmentally beneficial ones do not seem to attract the funding they need.
As this seems so hard to get to work, I feel that my plan B for generating such funds is valid. Maybe its time has come. I voiced it in the seminar on REDD+ which I gatecrashed at the Carbon Show. Well, I did not have the £400 they asked to attend the day’s seminars. The idea was perhaps given better reception than first I thought. Session chair, Adrian Rimmer, CEO, The Gold Standard Foundation, felt my idea equated to what was already on offer but I think not. It, too, is a form of “additionality”.
Simply, I reckon that Forest Credits can be paid to countries increasing their net forest coverage. I was assured by Dr Genevieve Patenaude, Edinburgh School of Geosciences, that obtaining baselines for all countries’ forests was now possible. I’ve read up today that she and others of the department have expertises in this area and so can substantiate this idea (baselining).
OK so placing an extraction levy on all fossil fuels abstracted from the ground should generate substantial funds to both encourage and also speed up the establishment of new forests. Thus New Forest Credits can be paid to documented increases measured against Genevieve et al’s baselines. The levy would increase the costs of fossil fuel so giving an extra spur to companies and individuals to lower their carbon use but it is taxing the greater consumers and directly fixing the carbon released back into the ecosystem, not degrading it.
Presumably at present the extraction industries do have to meet certain carbon release targets but I’m confident that these are just based on the operation of the plants and not on the carbon extracted. Accordingly they are not being asked to account for the carbon they are directly responsible for the subsequent combustion of.
I rest my case.