Consumer Emissions Trading Online

By SamuelRose, published at 10 May 2007 - 8:12pm, last updated 12 years 17 weeks ago.


Emissions Trading first surfaced in the 1970's in the US, and more recently1990 Acid Rain Program of the Clean Air Act.

The idea was to create a system that issued credits to polluting businesses for any pollution reducing improvements they introduced to their processes. From Wikipedia:

Emissions trading is an administrative approach used to reduce the cost of pollution control by providing economic incentives for achieving reductions in the emissions of pollutants. In such a plan, a central authority, such as an air pollution control district or a government agency, whether on a federal or state level, sets limits or "caps" on each pollutant, recognizing that clean air is a common-pool resource. Groups that intend to exceed the limits may buy emissions credits from entities that are able to stay below their designated limits. This transfer is normally referred to as a trade.

The Kyoto Protocol of 1997 introduced the concept of "Carbon Exchange" for the greenhouse gas known as Carbon Dioxide. The idea for Carbon Exchange is similar to Emissions Trading in general. The idea is to encourage business investment in sustainable and clean energy by turning emissions into a market commodity.

This idea has now extended itself to the realm of the individual consumer. Websites such as Carbonfund, Native Energy, Green Tag USA, and TerraPass allow individual people and businesses to calculate their Greenhouse Gas "footprint" from home heat and electricity and fuel from travel. An "offset" cost is then given for the amount that can be invested in clean renewable energy and reforestation.

So, what kind of impact are these programs making so far? This report from Nature gives a good overview of the pros and cons. It suggests that one drawback is that some of the offsetting measures are impermanent, or not guaranteed (such as forests planted, and then cut down later). Yet, it also relays the success in other Emissions Trading programs, like Sulfur Dioxide Emissions Trading.