Why carbon trading can reduce greenhouse gas emissions?

Question

People are just keep trading and trading. The limit are still there and for example if i have extra, and i sell it to you. and again you will use it. May i ask why carbon trading can reduce greenhouse gas ? Thanks

Answer 1

From the start this has been a bone of contention.

The theory is that if I pay you to reduce your carbon consumption, then between us we have reduced consumption.

But if we do this, we may not get enough of a change. It might allow us to reduce our carbon consumption by say 5%, where 5% is close to the amount that lower income countries might have been able to increase their consumption. But if we need to reduce carbon consumption by 80%, we will in no way get close to that number.

To reduce emissions by 80%, the amount we would need to reduce it to stabilize and start to reduce atmospheric concentrations, there is absolutely nothing short of major reductions by all major carbon users, all over the world.

Now that does not mean that should two companies, or two parts of one company, might not share a single cap, so that one reducing buy 90% while the other  reduced by 70% to stay under their shared cap. But let us be clear that a cap that brings us all down to 20% of 1990 carbon outputs can not be met primarily by trading. Trading is in effect sharing a cap, making the cap just a tiny bit easier to live with.

When we have a large wind farm selling carbon credits, it has much the same effect as having a steep carbon tax which can be avoided by using wind energy which carries no carbon tax.

A nuclear electrical facility will be able to produce power that has a low carbon tax included, so we have a strong incentive to get nuclear plants built and on line.

Whether this is packaged as a carbon tax that flows through the economy as an extra cost when  carbon is used to generaerate power and a saving when one does not use carbon to produce power, or it is packaged as a carbon credit trading system with declining caps appears to give similar results, but in my opinion neither will accomplish the task without a firm cap on the total amount of fossil fuels being extracted or imported.

Supply and demand being what they are, demand will provide the stimulus to go on increasing consumption as long as there is supply.

Answer 2

Another scam job ?

Answer 3

It only works when large industries do it, not when individuals buy "carbon credits" from someone who may or may not do what they say.

For large industries it works like this.  Say ther are 10 companies, each emitting 20 units of carbon, 200 total.  The government says they must reduce their total to 150.

One industry may be able to reduce to 10 units pretty cheaply, while another could barely get down to 15, even by spending a lot of money.  So the first company reduces by 10 units, 5 more than they need to, and sells 5 units of credits to the second company.

The net result is that the reduction of carbon occurs at the lowest possible cost to society, a very good thing.

The system was used to reduce SO2 emissions, which were causing acid rain, very successfully.

Answer 4

as bob says this lowest cost to society is the big thing.

if you build an energy system, say a biomass gasifier to make heat and electricity from grass hay, to heat and power an industrial factory, this whole setup would be (more than likely) carbon negative.  Meaning it consumes(sequesters, reduces) more carbon dioxide than it emits(as exhaust).

if you build a coal power plant(or nat gas) next to the same factory then you are totally carbon positive(not a good thing).  this is because the carbon dioxide emitted would be coming from the underground stores of the fossil fuel

the grass hay is carbon negative because as you gasify the baled hay to make power the hay that is currently growing in the field is using the same amount, if not more carbon dioxide(photosynthesis) than is being produced by the gasifier.

it makes a closed loop so that the carbon dioxide levels of the atmosphere would not change(well they might go down)

so when you have a carbon neutral or negative facility you have something that is reducing the impact from other facilities.  and if these other facilities can't reduce their emissions as effectively as my example then that is where the trading comes in.

basically one offsets the other by developing a means (technology) that has a lower society cost