Carbon trading could slash ‘green’ costs
By Fiona Harvey, Environment Correspondent | Financial Times | July 20 2009
Carbon trading could slash the cost of cutting greenhouse gas emissions by 70 per cent, a report commissioned by the prime minister found on Monday. Money invested in emissions cuts through a carbon market produces a greater “bang per buck” than other methods, the Global Carbon Trading report found.
A dollar invested in a global emissions market can cut 40 to 50 per cent more carbon than one invested only in reductions within the UK, the report found. In part, this is because cutting emissions in developing countries is often cheaper than in rich nations.
Mark Lazarowicz, the Labour MP responsible for the report and the prime minister’s special representative on carbon trading, said: “The evidence shows that global carbon trading can deliver substantial cuts in greenhouse gases rapidly and cost-effectively.”
Many businesses would prefer to invest in cheaper carbon-cutting projects abroad – a practice known as carbon offsetting – rather than undertake difficult emissions reduction programmes at home. However, the government’s message is controversial, since it has resisted the use of offsets in meeting its emissions-cutting targets.
Gareth Stace, head of climate and environment policy at EEF, the manufacturers’ organisation, said: “We do not support the premise that organisations should take all steps to reduce their own emissions before purchasing offsets. Organisations should be encouraged to find the most cost-effective approach – only by advocating this will manufacturers be encouraged to set ambitious reduction targets.”
But some environmental groups say this gives companies an excuse for failing to pursue green opportunities. “Carbon offsetting is a complete con which allows rich countries to shirk their responsibility to lead in tackling climate change by cutting their emissions first and fast,” said Tom Picken, international climate campaigner at Friends of the Earth.
The government sought to defuse the row on Monday by arguing that companies should pursue a carbon-cutting agenda domestically because of the benefits it could bring to British business in efficiency and new business opportunities, such as renewable energy and electric cars.
Separately, the government also put forward the idea of imposing carbon budgets on local authorities. The first carbon budgets have been set at central government level, requiring departments to bring in policies that help the UK cut emissions by 34 per cent, compared with 1990 levels, by 2020.
John Denham, communities secretary, said local councils should also have targets. “Many people feel they can’t make a difference to reducing carbon emissions because the problem is too big and the solution too far removed from their community. It is right that we have ambitious national targets but public enthusiasm can be renewed by giving it a local democratic basis with local mechanisms that people can manage and influence.”
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