Your Interview

Isn't the whole carbon credit system simply a way to appease our conscience? While I agree that the burning of fossil fuels has led to immense environmental degradation, I cannot help but wonder if we should not attempt more radical steps like changing our patterns of consumption or putting a cap on population numbers. If the carbon credit system fails to make any difference than what is the next step?

Julia: You are wondering in the right direction!

Indeed, the first and foremost priority is to dramatically reduce greenhouse gas emssions. In Canada that funadmentally means using dramatically less fossil fuels — coal, oil, gas. Canada is the least energy efficient country in the western world and we have huge win-win opportunities to cut energy use, thus cutting global warming pollution. Nor have we tapped the potential for zero and low-carbon sources of energy, such as solar, wind, hydro, geothermal.

It’s not ‘easy’ but it’s certainly not “radical” in fact unless it becomes absolutely expected and ‘normal’ for individuals, business and government, the planet and our livelihoods will suffer. Carbon offsets are at the bottom of the list of options, and should only be considered when there are un-avoidable emissions. I’ll address the credibility of carbon offsets in responding to another question.

As I understand it Carbon credit trading can be organized as an idependent market driven program, mainly outside of government control. Why does the present Conservative government object to that approach? It seems on the surface to fit a conservative philosophy.

Julia: The topic at hand is voluntary carbon offsets so I’m not going to respond at length to several questions that were posed about GHG emission trading, prompted by the title of the chat.

Suffice it to say that a key tool to aggressively reduce GHG emissions is a cap & trade system, whereby legally-binding reduction requirements on major emitters are established and trading is allowed amongst the regulated community; government sets the ‘size’ of the market by establishing a cap but supply and demand take over from there.

Those who exceed their cap can sell credits, those who don’t (for whatever reason) can comply by buying credits. The cap can be adjusted over time, to meet short, medium and long term emission reduction targets. The price is market-driven, based on supply-demand. The market can be domestic or international, so long as the cap is legally enforced, including having the emissions reductions/exceedances are legitimately verified.

The recent report of the government’s National Round Table on Environment and Economy recommended a cap & trade system and/or a carbon tax. The bottom line is you can’t have legitimate trading without a real, hard, absolute cap on global warming pollution, and that’s something the present government seems disinclined to impose.

Hello Julia, we live in a carbon (ie fossil fuel based)economy, right? So isn't carbon trading simply a way of monetizing and commoditizing CO2 emissions within our existing (carbon)economic framework thus allowing us to carry on business as usual?

Then how would carbon trading enable us to move away from our non-sustainable carbon economy towards a more sustainable society and economy?

Thanks.

Julia: This was answered above, ie: carbon trading is an important tool, but the real pre-condition is a legally-binding, absolute-reduction, carbon CAP to ratched down emissions. Trading is a ‘flexibility’ mechanism for the regulated industries which can spread the economic and technological burden.

The problem with our current ‘business as usual’ situation is that there is no limit on the amount of carbon that can be put out (for free).

Hi Julia - My question is not HOW trading works, but WILL it work the way it is intended to? Will the system be effective at reducing GHG emissions in a timely manner and in large quantities? I tend to favour a carbon tax but have heard some examples lately that suggest that the carbon tax would not be effective either. What do you think?

Julia: Again, answered above. I’d especially note that the National Round Table recommended a carbon tax and/or cap & trade. I tend to think the latter is more predictable — a regulated cap, a system for trading — but it doesn’t cover the full spectrum of emitters, and requres separate regulatory regime on sources like cars and buildings. However, an emphatic tax will certainly send a price signal throughout the economy and drive reductions.

That said, we need a well-designed system that is enforced; the NRTEE report also pointed out how loopholes in the trading system could render the system ineffective.

I am a forester in New Brunswick and manage the forest extension services for the private forest industry. There is growing interest in the potential for those with private forest land to potentially subsidize new forest management strategies with carbon offset money. Others see offsets as a means of diversifying the income from their landbase in the face of a weakening forest industry. In regards to the 'additionality' requirements of a carbon offset, that being the requirement that offset money result in the sequestration of carbn that would not otherwise be captured through 'business as usual', what would a woodlot owner be required to do to prove additionality? There are so many unknowns and variables at play in determining the amount of forest carbon being sequestered I'm not sure how it can accurately be projected. Is the question of end use considered in this as well? i.e. what happens to the forest carbon, is it sequestered forever in some product or does it simply follow the natural carbon cycle back into the atmosphere in which case there is no net decrease. I would like some clarification as to what an owner would need to do, end to end, in order to bring one credit to market, and where that market is. Thank you very much for your help in this, I am recieving inquiries daily and have not as yet found any concrete answers.

Julia: There is a fundamental difference between fossil carbon (i.e. oil, coal and gas that is dug up and burned and adds carbon in the atmosphere) and biological carbon (plants and animals, which are part of the carbon cycle — pulling carbon out of the atmosphere as they grow and releasing it back into the atmosphere when they die.) Maintaining the biologial carbon bank is absolutely essential to avoiding dangerous climate change. Turning this into carbon credits is, however, a source of great debate.

First we have figure out the carbon accounting for forests and woodlots, which WWF is involved in. I sympathize with your interest and intentions, but not easy answers at this point.

How well has the eu system worked? What have been the main problems?

Julia: It’s important to remember that the EU launched their system early (before the Kyoto compliance period began) in order to work out some of the bugs. In that first round, governments gave away too many allowances for free (many companies claimed that they would need more than they really did), so there was little incentive for trading and the price was very low. WWF is working hard to correct this for the second round.

What is the most effective way or method of calculating an office's carbon footprint? There seems to be many different "calculators" and systems out there but no one method has been used universally.

Julia: Thank goodness I can easily answer this because WWF just finished round-two of our office environmental management system. We used the GHG Protocol Initiative calculator tools which can be found at www.ghgprotocol.org.

More specifically, we used the cross sector tools found under the Calculation Tools > All Tools Tab and used spreadsheets for CO2 Emissions from Employee Commuting (Version 2.0. June, 2006), CO2 Emissions from Business Travel (Version 2.0. June, 2006) and Indirect CO2 Emissions from the Consumption of Purchased Electricity, Heat and/or Steam (Version 1.2. January, 2007).

Of course I could also answer what we’ve done, but that’s another question. A propos of this particular chat, however, WWF does purchase Gold Standard carbon offsets for our emissions.

How can we as members of the public help to ensure that the implementation of a carbon credit system does not help lock in th current economic disparity between so-called "developed" and "developing" nations?

Julia: WWF considers that both certified (in the Kyoto system) and voluntary carbon offsetting, if used appropriately, can play part in a strategy to reduce carbon emissions and contribute to sustainable development. They key is to catalyse the transition globally to a low carbon economy and improve the lives of people in the developing world. A point made by one of my colleagues who works in the “developing” world is that funds generated in the voluntary market could be used to initiate projects in countries where capacity and expertise in applying Gold Standard Clean Development Mechanism (CDM) accreditation is lacking, which would help small projects to gain access to the certified (often high-priced) carbon markets, and stimulate innovation and testing of new technologies and ideas.

We also support the UN Framework Convention on Climate Change’s core principle of common, but differentiated responsibility. This means that the countries that have contributed the most to the problem (the “developed” nations are responsible for about 75% of greenhouse gases from human sources) must do the most to solve the problem, and those with the greatest capacity to act (wealthy societies) must assist those with less capacity to reduce their emissions and adapt to inevitable impacts. WWF also supports moving towards per capita emission limits, which would avoid locking in the disparities you refer to.

How will governments ensure that the emissions a company emits do not exceed the credits the company owns? Will there be emissions measurement systems required of companies, on-site emissions reports, audits?

Julia: Governments will have to develop such systems. At the moment, the voluntary offset sector is not regulated, and still a bit of a ‘wild west’. That is why we helped establish the Gold Standard CDM credits which do require independent verification.

are there any incentives related to the carbon credits scheme for entrepreneurs (such as in Canada :) to create new business initiatives which result in carbon emission reductions?

Julia: A simple Google search for voluntary carbon offset providers shows that entrepreneurs are into this space big time. There are also entrepreneurs speculatively developing projects, includng aggregating reductions from multiple small projects, that would meet the official UN definition of a “certified carbon emission reduction” in the hopes that they will be able to sell it to the government or regulated companies. But so far there is not regulated market, since the Government has not set emission reduction caps.

I can’t count the number of conferences I’ve been to where Canadian companies bemoan the lack of policy which is holding back development of a vibrant carbon commodity market here, especially when they see it booming in Europe and elsewhere.

I was wondering if some "carbon credit" organizations are more reputable than others. How can I become education to know the difference?

Julia: There are two factors that have to be considered. First and foremost, has everything possible been done to reduce emissions? The fastest and most cost-effective way is energy conservation and efficiency. Every one of us can be dramatically less carbon-polluting. So can business and governments. WWF has just launched The Good Life: an online community for concerned Canadians who want to stop talking about climate change and start taking personal action. It's free, open to everyone, and I'd like to invite you to sign up right away (www.wwf.ca). Next step is to use renewable energy. It’s kind of like the old Reduce-Reuse-Recycle slogan — I have to think up an equally good catch-phrase for this topic.

There will be un-avoidable emissions, and this is where offsets play a role. Here the factor is the quality of the offset. There is a lot of ‘snake oil’ out there, which has seriously undermined the credibility of voluntary offsets. In particular, tree-planting projects are particularly suspect; not that planting trees is bad, but the priority for investment should be on emission reduction projects such as energy efficiency and renewable power and who can guarantee that the trees planted will be maintained.

Concern about the quality of offsets has not been alleviated by the recently announced Voluntary Carbon Standard (VCS) which WWF describes as a ‘bottom of the barrel benchmark’, offering only a very basic set of rules focused primarily on lowering transaction costs and thus carbon prices to consumers. Worse, there are serious loopholes which could lead to gaming by project developers and no requirement for environmental and social safeguards. WWF has called for a review and tightening of the system. WWF only recommends and endorses carbon offsets which are certified by the Gold Standard methodology. Otherwise it’s ‘buyer beware’.

On principle, some oppose offsets altogether, in order to keep the single-minded focus on reducing GHG emissions. I agree that offsets are problematic if used as an excuse for not reducing emissions, and while much serious stuff has been written about this, check out www.cheatneutral.com for a humorous perspective on why we can’t just buy our way out of the problem.

Hello Julia,
Thanks for taking my question.

Carbon Credits along with other technologies to reduce carbon dioxide being pumped into the atmosphere seems to be a method that many environmental organizations are taking however it seems that there is a resistance in countries such as our own and the U.S. do you believe that we will see this way of environmental economics pushed through and if so when ?

Is it possible that being able to buy carbon credits will just allow countries (and companies) to act as they always have? What would be the incentive to reduce emissions if money can still buy an easy way out?

Thanks,
Jody M