Problems with the Global Carbon Market

           After the signing of the Kyoto Protocol, there are a lot of concerns about whether the protocol truly works for lowering the emission of makes the situation even worse. The key issues with the carbon market are how can we define the owners, products and modes of ownerships, when countries selling and buying emission credits from others. Lohmann talks about that the objects of accounting are difficult to choose, besides the ways to count and what should not be counted with the process of establishing the ownership. In his paper, he talks about the failures of the carbon market system.

(Source: http://www.worldbank.org/depweb/english/beyond/global/chapter14.html)

            The Kyoto Protocol “translate public concern about climate change into greenhouse gas emissions permit and credit prices. The earth’s carbon dump would gradually be made economically scarce through limits on its use imposed by states. A market would be built for the new resource by creating and distributing tradable legal rights to it. Bargaining would then generate a price that would reflect the value society placed on carbon dump use and ‘denote the financial reward paid to reduce …emissions’. Emitters who found ways of using the dump more efficiently could profit by selling their unused rights in it to more backward producers. Emitters could also develop new dumps. The market would ‘help society find and move along the least-cost pollution-reduction supply curve’ (Sandor et al., 2002, p. 57)” (Lohmann, 205).

He gave three study cases regarding of how people fail to frame the market in South America, South African and East Asia. The common points of these places are that they are new places of dumping carbon; these places are less developed countries and the level of acknowledgement on potential threats is extremely low. The result of these features is that the process of development is much slower than the expecting level due to inequality of getting other goods at the local level, comparing with developed countries.

For lowering carbon emission, the global carbon market is a great beginning to start with, though more supervision on every member and more details on regulations are needed. It is crucial to start fix problems instead of neglecting them. For a protocol that needed globally cooperation, there are a lot of issues that need to figure out, such as “Sellers and buyers have to be identified and isolated by simplifying attributions of causality or responsibility and developing instruments of ownership. The displacements and institutions needed for running the system—negotiating arenas, legal processes, communication mechanisms, measuring instruments, police—are formatted as ‘transaction costs’ (Coase, 1937), which are then minimized, and foundations laid for securities and commodities exchanges as well as futures and options markets.” (Lohmann, 210)

The very first thing is to quantify industrial emission of carbon dioxide when trading the emission quota as a commodity. This procedure requires vast amounts investments on measuring infrastructures. How to split the costs for that is crucial, especially most people think that the global north should take more responsibilities than global south, where more poor countries are located. Will the developed countries willing to spend extra money on lowering carbon emission, when most of them are struggling with getting off from economic crisis? There are six gases that mentioned in the Kyoto Protocol: CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride (Wara, 595), but the whole market system only concentrated on the emission of carbon dioxide. Further improvements may need to focus on the other five gases’ emission.

Reference: 

Lohmann, Larry. "Marketing and Making Carbon Dumps: Commodification, Calculation and Counterfactuals in Climate Change Mitigation." Science as Culture 14.3 (2005): 203-35. Print.

Wara, Michael. "Is the Global Carbon Market Working?" Nature 445.7128 (2007): 595-96. Print.

Depend on economic approach to lower the emission? (Part 2)

        CDM stands for Clean Development Mechanism. In 2003, Kyoto Protocol established a market for international trading and lowered carbon dioxide emission by giving subsidies to less developed countries. When developing countries adopting latest technologies that are environmentally friendly and saving more resources, they will receive payments for contributing reducing the emission level. When countries like China, India and South Africa successfully reduce their carbon release and is lower than the emission allowance that assigned on them, they have extra credits of emitting CO2. These credits can be sold to countries that need additional credits, especially for developed countries.


(More information about CDM: http://unfccc.int/kyoto_protocol/mechanisms/clean_development_mechanism/items/2718.php)

       So why developed countries are the ones that buying extra credits and always exceed the limits? The key is that for replacing all facilities and infrastructures; this is extremely costly for them but to maintain these facilities, the total amount of CO2 emission will exceed the limits. (Nature, 2007) From my perspective to say, this is a loophole in the procedure for not getting developed countries’ involvements with the greatest number of emission released from them. Approaches to fix this problem need both less developed and developed countries participation. For all the countries, that following the protocol, further adjustments and legislation are required with the constantly increasing of population. 


        First, all countries particularly developing countries have to establish policies to slow down the growth rate of population. The roots for a lot of problems are the constantly increasing population. For developed countries, a time limit would be necessary for them to replacing previous by latest technologies. A somewhat longer period would offset the effects of replacing all facilities within a short time. Otherwise, the effects of lowering the carbon emission will not be so large with developed countries using their old technologies.

        In the end, lowering all emission quotas for everyone will be necessary for every country. This can urge the production from resource concentrated to technology concentrated which may be friendlier to the ecosystems.

(source: http://www.unep.org/publications/ebooks/kick-the-habit/Default.aspx?bid=ID0EUDAI#ID0EIEAI)

Depend on economic approach to lower the emission? (Part 1)

Economy approach is another way to reduce the carbon emission, which is a passive way to do. This posed on a restriction on every member that within the protocol. Depending on penalties instead of consciousness of human, who is ever in the market has to follow rules in order to maintain a position. When companies and countries selling and buying carbon emission permit from each other, it is more likely to produce a cost-effective market that may decrease the carbon emission level of all. It is an excellent start to replace the services that are unsuitable for environment and ecosystems by eco-friendly ones.

When we can make different things into equations that can weigh both sides at the same time, it is possible to exchange those things between places and people. Then, the carbon market forms from neoliberal philosophy. “If you know that saving the Amazon is better for the atmosphere than keeping one car off the road, then you ought to be able to calculate how many cars are equivalent to saving the Amazon. The calculations may be difficult, but I do not see why the problems should be insurmountable” (Dr Richard Tipper, Edinburgh Centre for Carbon Management).

The global carbon market is a business that combines government regulation and trading permits in one market. This can prevent the market filled with too much government’s interventions that may cause market failures. The most significant protocol of the carbon market is the Kyoto Protocol, which is put into force on 2005. 37 countries following the protocol, they committed that they will cut the mission of six kinds of all six Kyoto Protocol gases: CO2, methane, nitrous oxide, hydrofluorocarbons, per fluorocarbons and sulphur hexafluoride. 





Reference:  "Anarchism and the Peak oil argument - Anarkismo." Insert Name of Site in Italics. N.p., n.d. Web. 16 Nov. 2011 <http://www.anarkismo.net/article/2672>.

Recent news on global warming (1)

Skeptic finds he now agrees global warming is real

This paper talks about that Richard Muller, who is a brilliant physicist and skeptic of global warming spent two years and finally changes his mind. The research that he did in two years is about the world’s surface temperatures. He searched books that are further back, which can trace, back to Benjamin Franklin and Thomas Jefferson.  Two main criticism are examined during the research. “One is that weather stations are unreliable; the other is that cities, which create heat islands, were skewing the temperature analysis.” (Borenstein) In this research that did by Muller, there is nothing about searching for evidence of causes for global warming neither more projection nor how the future situation will be.

He planned to find evidence to prove that the mainstream scientists are wrong about global warming. The result turns out that the temperature of the Earth is 1.6 degrees higher than 60 years before. This perfectly matches with NASA’s data.  With more and more researches under taken, leading skeptic scientists are no longer talking about that the globe is not getting warmer. They switch their central argument on how much the temperature raised by human influence. For skeptics, global warming is not a significant issue and it is worthless to spend money to prevent it happen. 

"Skeptic Finds He Now Agrees Global Warming Is Real - Yahoo! News." Yahoo! News - Latest News & Headlines. Web. 05 Nov. 2011.