As we evolve towards a new global climate change policy regime at Copenhagen later this year via the negotiations currently going on in Bonn, a willingness to step in each other’s shoes gets more and more critical and primary.

On one hand are the developing countries like India, where emphasis has been on highlighting how its measures conform to the needs of the hour and of the globe. Its adaptation initiative on Himalayas and other, mitigation initiatives (solar, water, sustainability, energy efficiency, etc.) all aim at moving India and the world one step closer to a better environmental situation.  It is a more practical way of doing things to plan on both environment and development together – rather than on viewing them in traditional typecast of development versus environment. So, the rural employment scheme under the National Rural Employment Guarantee Act (NREGA) that generates bulk of (70%) employment in environment-improving schemes is particularly heartening.  NREGA’s green jobs in afforestation, sustainable agriculture, water harvesting, etc. will not only provide employment to one person in a family but will also do so in areas that will alleviate emission-problems. 

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Over the past several months the Canadian federal government has been operating under the assumption that they would be joining forces with the US government in the development of a joint carbon trading system between the two countries. Because of this, progress in dealing with greenhouse gas emissions has basically been on hold at the federal level in Canada until the details of a US-led plan were revealed.

This inaction by the Government of Canada has taken the spotlight off of their much-maligned Turning the Corner greenhouse gas action plan, which was originally introduced in early 2007. This plan was widely criticized for its use of intensity-based emission reductions and targets that were not nearly as strong as those defined in the Kyoto Accord, of which Canada is a signatory.

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We’re coming at you live with more special Red, Green, and Blue coverage from New York’s very own Wall Street Green Trading Summit.

It’s Lunchtime now at the WSGTS, and I just emerged from another dizzying bout of acronyms to find myself totally shocked by how little I know about big market investing. Fortunately, I stumbled on Open Carbon World, an open source project on carbon footprints that is here at the conference.  They have accumulated the following glossary of terms, acronyms and etc. to help novices like me navigate these crazy fast talking presentations.  If I drop one or two over the next few days, please forgive the frazzled brain, and give them a look up!  

>> More Wall Street Green Trading Summit:  The Species Bank?, Carbon Markets, Solar Panels and the Electric Grid

OCW is presenting tomorrow, so I’ll reserve final judgment ’til then, but expect a post on some sweet open source ideas having to do with footprints and offsets.

OCW is presenting tomorrow, so I’ll reserve final judgment ’til then, but expect a post on some sweet open source ideas having to do with footprints and offsets.

OK, so Carbon Trading, huh?

The murky mysteries of the market continue to elude me.  The second session today was all about the carbon offset market: where the money is, where the investment opportunities are and will be, and who is making the rules about what a carbon offset even means.

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A top China central government think tank yesterday released a framework for quantifying countries’ historical emissions. Under this proposed framework, the State Council Development Research Center (DRC) would create a “historic account” of past emissions, used to benchmark developing countries with lower accumulated emissions - like China - against countries with higher accumulated emissions and assign emissions “deficits” to countries who have emitted less. Using this quantitative assessment, countries with emissions “deficits” would get the green light to emit, or trade emissions credits with countries that have already exceeded their allowance.

The release of this plan supports external analysis that China believes it should have the right to develop free from carbon reductions until their accumulated emissions are on par with industrialized countries. A recent Brookings Institute report: “Overcoming Obstacles to US-China Cooperation on Climate Change” articulated Beijing’s stance, which included the conviction that:

Countries should be held responsible not only for their current emissions but also for their cumulative historical emissions, given that greenhouse gases accumulate in the atmosphere over many decades.

This plan is Beijing’s most comprehensive effort to date to both highlight and quantify development inequalities as a justification for releasing China and other developing countries from emissions reduction expectations.

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While reporting a 50 percent increase in the number of projects approved under the Clean Development Mechanism (CDM), the administrators at the U.N. Framework Convention on Climate Change (UNFCCC) acknowledged that the carbon trading system requires an overhaul. This is the first time that the UNFCCC has conceded to the fact that the CDM has loopholes which need to be filled in order to make the next climate treaty a success.

CDM is a tool incorporated in the Kyoto Protocol which helps industrialized nations to meet their emissions-reduction targets through investments low-emission projects in the developing world. It has been an instrument to spread clean energy use across the world and providing monetary assistance to the developing countries to reduce their carbon emissions. But the mechanism has had its fair share of criticism.

Critics say that projects which could have been set up without any monetary help have also been incorporated in the CDM. Many other projects which pose potential environmental threat have been approved to sell carbon credits. While approving projects like wind farms for selling carbon credits it must be ensured that the ecology of the area is not going to face any adverse effects, that no trees are cut to make space for the wind mills and that the local population has no objections with the project. These aspects have been ignored so far.

If a project has been established then it should not be considered in the application process. Thorough checks and extensive studies about the ecological, environmental and socio-economic effects must be made mandatory before the any project is approved for selling carbon credits.

For instance, for a hydroelectric project, it must be check if the displaced people have been successfully relocated to new areas, what biodiversity has been lost due to the submergence of land and what are the plans initiated to replenish it and whether the company/government has any plan about managing the methane emissions generated from the project.

Companies in India and China, which sell the lion share of global carbon credits, try to find ways of convincing their respective environmental ministries which further their recommendations to the approval agencies hired by UNFCCC. Therefore, it is important that more transparency brought in the manner in which these agencies go through the procedure of approving projects.

Taking yet another example, the Delhi Metro Rail Corporation (DMRC) sells carbon credits under the CDM scheme for using the eco-friendly regenerative braking system in its trains. Now, the DMRC is one of the very few metro projects in the world which manage to generate profit so why does it require money to finance this braking system. More than half of this long-term metro project has been completed and Japan has provided a major portion of the funds but now DMRC is planning to get CDM approval for the whole project itself. The DMRC wants to get approval for selling carbon credits as commuters have shifted from buses/cars thus reducing carbon emissions.

The developed nations are least bothered as they are concerned only with meeting the set emission reduction goals while the developing countries are happy to receive practically free funding for their projects. But if transparency and responsibility is not brought into the system, this whole carbon offsetting scheme would be reduced to a mere eyewash.

Instead of monetary investments technological help should be extended to the developing and poor countries because it is difficult to keep track of the funds. Every entity involved in the process - the project managers, the company involved, the environment ministry and the approving agency - must be made accountable for its actions. We must stop fooling ourselves by selling and earning credits because in reality we have to go a very long way before the rising carbon emissions could be curtailed.

Image source: lamusa at Flickr under Creative Commons License.

There are two well known and highly charged sayings about land:

—–agriculture is the foundation of economic growth
—–all land use is inherently political

The fast approaching world of a carbon market could see how we use land becoming the most important issue in stopping climate change becoming a disaster for mankind.

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On Friday, the European Council adopted a directive that demands aviation activities must be included in the EU’s Emission Trading System (ETS). The ETS started operations back in 2005 in an effort to curb Global Warming, and is the largest multi-country Greenhouse Gas emission trading system world-wide.

The International Air Transport Association (IATA) strongly objected to the decision - duh! The IATA accounts for over 200 airlines and 93-percent of scheduled international air traffic.

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The report, titled “Climate Change: Financing Global Forests,” offered that this money should come from private donors and global carbon markets.  The report states that by 2030, developing nations should also be asked to pay to help create “carbon neutral” forests, through setting targets to help slow deforestation, and hasten reforestation.

“Deforestation will continue as long as cutting down and burning trees is more economic than preserving them,” said Johan Eliasch, Prime Minister Gordon Brown’s special representative on deforestation, and author of the report.

The report estimates that funds from carbon markets alone would be able to cut deforestation rates down 75 percent by 2030.

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Crystalline Tower Office Building in Manhattan

BofA’s new 2.1 million square foot, 54 story tower is being heralded as the world’s greenest skyscraper. This $1 billion glass, steel, and aluminum skyscraper will use significantly less water and energy, while providing a healthy indoor environment.

It features a passive solar design, the use of recycled and renewable materials, and work stations with individual climate controls. Natural elements include the use of rain water and a green roof reduces energy use for heating and cooling. A graywater system will reuse waste water from sinks to flush toilets. A 4.6 megawatt cogeneration plant will generate heat and electricity.

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Emerging out of thin air, it has already surpassed solar and wind as the largest cleantech industry. Carbon credits were worth a staggering $63 billion in 2007 and $59 billion in the first half of 2008 alone.

Europe has dominating the carbon market since its creation less than five years ago. EU’s Emissions Trading Scheme (EU ETS) was responsible for 70% of the trading in the first half of this year, totaling $47 billion. This dollar amount is likely to increase as the cost of carbon credits soars and with the inclusion of aviation emissions in 2012.

Obviously an industry of this amount of rapid growth opens many business opportunities. Companies are needed to provide verified emissions offsets, energy efficiency audits, greenhouse gas emission audits, and to design carbon software. This industry has gained considerable interest from venture capitalists.

Carbonetworks of Victoria, British Columbia provides software to evaluate carbon footprints and reduction options for businesses, governments, project developers, and consultants. They are located in one of the few areas in North America with a carbon tax. They recently announced the first close of a $5 million Series A round from NGEN Partners.

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But before we do that, we’d like to tell you about a different way to spend the same amount of money. While this option wouldn’t have you rocking out to Swedish 80’s pop songs, it would let you personally prevent a measurable amount of pollution from some of Europe’s biggest greenhouse gas emitters.

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The FSA says that the integrity of the carbon trading market is under threat. The information that carbon emissions traders relay to clients often has a truth content that’s lower than you’d expect. In many cases there’s also no clarity over the regulations involved, a lack of credible data. Investors are also frequently offered climate change related products that are totally unsuitable for their goals.

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Theoretically the agreement whereby airlines from the US and Europe are allowed to land in any airport on the two continents, should lower flight costs, open up airlines to foreign ownership and the create new flight routes between Europe and the US. But it ain’t happening. All of these targets are obscured in heavy clouds.

Virgin Atlantic, which inaugurated the world’s first biofuel flight a few weeks back, told a recent New York news conference that it doesn’t foresee any progress on Open Skies in the near future. The company hasn’t even chosen any destinations for new flight routes and says this is not in the cards for at least another two years.

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