Carbon credits

Manila Times.net
Written by : MIKE WOOTTON
IMAGINE that most people are aware of the effects of and reasons for, global warming. It is caused by increased concentrations of “greenhouse gasses” in the atmosphere, which result from activities such as deforestation and the use of fossil fuels with the consequence of the environment generally becoming hotter and drier, changing weather patterns, melting ice caps and rising oceans. The “greenhouse effect” is the process by which absorption and emission of radiation by gases in the upper atmosphere warm the lower atmosphere and the planet’s surface.

The main international mitigation effort is the Kyoto Protocol. Climate change is a major international issue with trillions of dollars committed by various national governments and private sector parties to redressing its effects. An international treaty, the United

Nations Framework Convention on Climate Change, is agreed between 192 national governments. The objective of the UNFCCC is to reduce greenhouse gas emissions, which contribute to global warming by releasing chemicals (primarily carbon) to the atmosphere. The Kyoto Protocol established legally binding obligations by which the developed economies undertook to reduce their GHG emissions. The protocol—which seeks to stabilize and limit greenhouse gas concentrations to prevent a dangerous interference to the natural adaptation of ecosystems to climate change, to food production, and to allow economic progress to continue in a sustainable manner—expires at the end of 2012. At a major conference held in Copenhagen, Denmark in December 2009 there was no clear resolution on whether or not to extend the term of the protocol and if so, under what conditions.

Developed countries have agreed to limit their carbon emissions to levels (towards de-carbonization of their economies) generally below the level of their emissions as inventoried by UN in 1990. Developing countries are not expected to de-carbonize their economies at present. Setting no immediate restrictions on carbon emissions in developing countries under the UNFCCC serves three purposes:

• It avoids hampering their development, because emissions are strongly linked to industrial capacity,

• They can sell emissions credits to nations whose operators have difficulty meeting their emissions targets,

• They get funding and technology for low-carbon investments from the developed countries in order that the developing countries can generate more emission credits.

This in turn brings about the following:

• A shifting of emission creating activities from the developed countries to the developing countries thereby stimulating industrial investment and economic growth; and

• A potential market in which emission reductions in developing countries can be sold to emission creators in developed countries allowing them to stay within emission targets if they cannot achieve reductions to 1990 levels by themselves.

Therefore emission reductions in developing countries can become a marketable commodity. It was at one time hoped that the market in emission reduction certificates would provide sufficient funding from purchasers in the developed countries to stimulate development of non fossil fuel power generation [hydro, biomass, wind and solar power] in the developing countries, of which the Philippines is one. It was this amongst other things that was a motivator for the renewable energy initiative by government and the passing of the Renewable Energy Act. In the event the market for emission reductions has not provided more than a token contribution towards the necessary funding for renewable energy development, nor is there any clear way forward beyond 2012. Despite this disappointment it is without a doubt that the Philippines will benefit from an expansion of the use of renewable energy. It saves coal and oil imports and dependence on ever increasingly world markets. One thing that does seem fairly apparent though is that we cannot depend too much on the financial contribution of carbon emission credits to help the Philippines clean up it’s “energy act” . . . A welcoming investment environment for renewable energy is what is needed, or is this just yet another dream?

Mike can be contacted at mawootton@gmail.com