The first auction of US carbon credits

Photo courtesy of Karen Eliot at Flickr.com.

Last week, the Regional Greenhouse Gas Initiative held the first auction for US Carbon credits. This was an important milestone because the auction may set the pattern for a federal carbon tax. Funds raised at the RGGI auction will benefit six northeast states: Connecticut, Maine, Maryland, Massachusetts, Rhode Island and Vermont. The states plan to spend this money (slightly more than $38 Million) to invest in energy efficiency, developing new technology, and other “programs to benefit electrical consumers”.

Hopefully, most of the money will be spent on the first two uses. If carbon taxes are used to subsidize the price of electricity, then that could actually accelerate climate change. In countries where the price of electricity is artificially reduced, demand is rising faster than production. This is causing some extremely dirty power plants to be built to meet short term need. Power outages and brownouts are also common.

Some people argue that revenue from carbon taxes is best used to implement programs that reduce the use of fossil fuel generated power. Possibilities include offering rebates on high-efficiency air conditioners, providing low cost loans for businesses that eliminate wasteful machinery, and building alternative power sources such as wind farms, geothermal generators, and solar arrays. When used in this way, carbon taxes can stimulate local businesses and encourage green consumption. In the long term, the economy will also benefit from energy self sufficiency.

Other states in the RGGI include New Hampshire, New York, New Jersey, and Delaware. These states didn’t participate in the first auction, but they may participate in the next auction, on December 17, 2008. Registration begins in October.

So, who bought these carbon credits? Mostly, the buyers were power utilities that operate in New England. Several environmental groups also participated, bidding on credits with the intent of retiring them from circulation. Brokers and individuals were also allowed to participate, but the RGGI hasn’t released a list of buyers yet.

Bidders had the option of concealing their identity during the sign up process. This anonymous bidding is a bit troubling, since most companies would be happy to garner free publicity from buying carbon credits. It leaves the door open for companies to make false claims and makes it hard to independently verify which utilities are responsible stewards of the environment. Hopefully, the lack of disclosure is only a temporary situation, and future carbon auctions will be more transparent than the emissions they offset.

Photo courtesy of _Krystian PHOTOSynthesis (wild-thriving) _ at Flickr.com.

Eco news of the week


Photo courtesy of
Brooklyn Bridge Baby at Flickr.com.

Here are five big environmental stories that you might have missed this week:

1) Saudi Arabia is planning for a future without gasoline. The Kingdom is investing in education and hopes to develop new industries and exports that will supplement oil in the near term and replace it in the long term.

2) Small is big. Due to rising energy costs and environmental awareness, architects are finding a surprising demand for smaller homes.

3) Have you heard of CarbonRally.com? It’s a carbon calculator site that’s different from the hundreds of other calculators out there. Instead of focusing on environment harms, the site reinforces good behavior with instant feedback about the progress you’ve made. After all, even minimal impact can be discouraging to focus on.

4) Speaking of carbon – Al Gore and T Boone Pickens are both pushing aggressive energy plans. These gentlemen, who come from very opposite sides of the political spectrum, are stressing that carbon free electricity is more than an environmental issue. They opine that moving away from coal and oil will make a huge difference in the US trade deficit, bolster national security by increasing energy independence, and position American companies to prosper against global competition.

5) Did you know that the Prius fails Georgia’s Vehicle Emissions Test?

Cows, cow farts, fertilizer and climate change / global warming

Photo courtesy of rmrayner at Flickr.com.

When governments talk about fighting global warming, they put a lot of emphasis on reducing industrial emissions. But, agriculture is responsible for a surprisingly large share of the gases that cause climate change. By some estimates, emissions from fertilizer, animals, and farm equipment account for about 20% of all global warming gases.

Overuse of synthetic fertilizers is a major problem because some of the chemicals in these fertilizers trap heat better than Carbon Dioxide. For instance, Nitrous Oxide can retain 300 times as much heat as CO2. There are many superior organic alternatives, but these account for only a fraction of the fertilizers used today.

Farm animals are another major source of global warming gases. As cows, goats, and sheep digest food, they release a high volume of methane. Cows are responsible for about 75% of all methane made by farm animals. That’s another potent gas behind global warming – Methane is about 25 times better at trapping heat than CO2.

It may be possible to reduce these emissions with big, sweeping government policy. But, if you want to make a difference, change starts in the grocery aisle. The next time you go to the grocery store, consider produce that’s raised with organic fertilizer and leave those slabs of prime rib in the grocer’s freezer. Your body will thank you, and you can breathe easier too!

Photo courtesy of OutdoorAlex at Flickr.com.