Carbon Trade

G lobal warming has spawned a new form of commerce: the carbon trade. This new economic activity involves the buying and selling of “environmental services,” including the removal of greenhouse gases from the atmosphere, which are identified and purchased by eco-consulting firms and then sold to individual or corporate clients to “offset” their polluting emissions. While some NGOs and “green” businesses favor the carbon trade and view it as a win-win solution that reconciles environmental protection with economic prosperity, other environmentalists and grassroots organizations claim that it is no solution to environmental problems such as global warming. 

Carbon trade works like this: an eco-consultancy that brokers environmental services conducts an eco-audit of a client and comes up with a presumably accurate estimate of how much carbon the client’s activities release into the atmosphere. Carbon is the common denominator in all polluting gases that cause global warming. At the other end of the operation, the firm scours the world in search of environmental services that could offset its client’s emissions. These services are usually forests and tree-planting projects and are known in the business as carbon assets or carbon sinks, because trees remove carbon from the atmosphere and sequester it in their wood. The activity of these sinks is often called carbon sequestration. 

Using a variety of methodologies, the environmental services broker arrives at an estimate of how much carbon a particular sink sequesters, and then assigns it a monetary value and sells it to a client. The client then substracts from its carbon account the carbon sequestered by its newly purchased carbon sink. The client is said to be carbon-neutral or climate-neutral when its carbon assets equal its carbon emissions. 

The carbon trade is legitimized by the Clean Development Mechanism (CDM) of the Kyoto Protocol, an international agreement that aims to deal with the threat of global warming. The CDM is one of the Protocol’s market-based “flexible” mechanisms, which include emissions trading and joint implementation.  

Two examples of environmental services brokers in the carbon trade are Climate Care and Future Forests. The London-based Climate Care is a non-profit organization that sells carbon offsets to individuals and companies and uses the money to invest in climate-friendly projects, like wilderness protection in Uganda, energy efficiency in the Indian Ocean island state of Mauritius, and small-scale hydro power in Bulgaria. Its corporate clients are mostly travel agencies like Ecotours, Whale Watch Azores, Nature Trek, and Andante. 

The for-profit Future Forests, also based in England, says on its web page: “We help you to see how much CO ₂ is produced by the things you do, and suggest ways you can reduce those emissions. What you can’t reduce, we can neutralise (or ‘offset’) for you—by planting trees that reabsorb CO ₂ and by investing in projects that cut down CO ₂ emissions, such as those which use renewable energy sources.” 

Future Forest’s clients include celebrities like Pink Floyd, Simply Red, Kitaro, and film director Ridley Scott, and corporations like Fiat, Mazda, Volvo, Marriott Hotels, Tower Records, BP, Price Waterhouse Coopers, Warner Brothers, and Harper Collins. 

However, some environmental organizations believe that the activities of these two institutions are no help to world climate, and they released a joint communique on this matter in May 2004. 

The communique included declarations by Heidi Bachram of Carbon Trade Watch, a group campaigning to curb global warming: “We are concerned that these companies are indirectly blocking the real solution to global warming, which is reducing and finally halting fossil fuel burning. The idea that people can burn fossil fuels and then plant trees to clean up the carbon dioxide which results is simply wrong. This false ‘solution’ will merely keep people digging up oil and coal, instead of trying to shift to clean energy.”