These thoughts are motivated by the guest blog of a good friend in Australia in the Brisbane Courier Mail, Dave Sag on carbon trading.
Can money be better spent in Pakistan than Australia? In terms of CO2 reduction effect, most likely yes, due to wage & currency differences as well as the reality that cheap programmes can divert many more people easily from destroying forest than in a rich country (where such activities have more or less ceased). Will lack of education, corruption or politics derail such efforts… in some cases, almost certainly. That’s where oversight becomes important.
With respect to reliable base-load power…rich countries are still struggling with the idea that they might have to manage demand rather than only solve the supply problem. We need to be much more serious about this, much faster – in aspects from lighting to insulation, correctly oriented new housing, low-energy flat screens, smart ‘standby’, and all the rest. The real question is: what can we get our base-load need down to? Then distributed solar, wind etc starts to look a lot better. A village-wide energy footprint is a lot easier to manage than that of a country.
Do we need carbon trading? I am pretty sure we do – for the REDD category, and other categories of activity where few $$ from rich countries can have a big effect in a poorer country (e.g. by financing better fuel alternative to wood). Try plotting CO2 versus GDP/capita on GapMinder.org to get an idea of what we need to do. The left hand-side is where it is most likely cheap to have a big impact on CO2.
Lastly, can we trust carbon trading? Can it work as a tax credit? It can work if externalities like CO2 pollution and deforestation are valued in an economic way, i.e. if the alternative is that you get heavily taxed for your current dirty practices. As to trust – as Dave says: “… even the voluntary carbon market is amongst the most regulated and scrutinised industries on Earth”. It will take time to get this right, but it doesn’t mean we shouldn’t try. Dave’s company: Carbon Planet.