Carbon Trading Could Trigger a ‘Sub-prime Style’ Economic Crash
Plans to expand carbon markets at UN climate talks this December could trigger a second ‘sub-prime’ style financial collapse and fail to protect the world from a global warming catastrophe, according to a report from Friends of the Earth.
The trade in carbon permits and credits, primarily based in Europe, was worth $126 billion in 2008 and is predicted to reach $3.1 trillion by 2020 if a global carbon market takes off, according to Friends of the Earth.
However, the majority of the trade is not between polluting industries and factories covered by carbon trading schemes, but by banks and investors who profit from speculation on the carbon markets by packaging carbon credits into increasingly complex financial products similar to sub-prime mortgages, which triggered the recent economic crash, according to the researchers.
The report, A Dangerous Obsession (PDF), focuses on the buying and selling of a new “artificial” commodity — the right to emit carbon dioxide — which the UK and other developed country governments want to expand into a worldwide market and are pushing in the negotiations leading up to the Copenhagen climate talks in December, say researchers.
According to the report, the UK Government’s focus on carbon trading as a solution to climate change is “high risk, irresponsible and dangerous.” It also notes that existing carbon trading schemes are not delivering the emissions cuts promised, and relying on this mechanism to reduce emissions globally is gambling with the health of the planet.
Researchers also say carbon trading is being used as a smokescreen by rich countries to avoid their legal and moral commitment to provide money and technology to developing countries to help them adapt to climate change.
The report recommends that the UK Government use proven policy tools like regulation, a carbon tax and major public investment in greening the economy to reduce emissions by at least 40 percent by 2020, without carbon offsets.
Stay Up-to-Date On Environmental Management, Energy & Sustainability News with EL's Free Daily Newsletter
Energy Manager News
- Anaerobic Digester Project Starts on Long Island, NY
- Seward to Use Resurrection Bay for Heat
- An Iconic Structure Gets Certified Silver By Leeds
- Sioux City, Woodbury County Getting LED Upgrade
- Buzz Oates Group Mounts Big LED Retrofit Project in Sacramento
- ORNL Building Efficiency Software Available as Open Source Code
- General Mills: We’ll Invest $100M to Reduce Greenhouse Gas Emissions
- Oregon Correctional Institution Saves with LEDs