By Ron Heusen
There is a correlation between the evidence provided to support any theory and the degree of faith required to believe in it.
Underlying carbon cap and trade is the theory that the technological innovation of free enterprise is best suited to wean us off fossil fuels and that governments are best suited to control this process.
B.C. is about to officially throw the switch on a small U.S./Canada cap and trade model called the Western Climate Initiative. Its central goal is to reduce greenhouse gas emissions by 15 per cent of 2005 levels, by 2020. The WCI members are B.C., Ontario, Quebec (maybe Manitoba), and seven U.S. states.
Here are the basics of cap and trade.
Government sets an overall total reduction target on greenhouse gas emissions (the cap) implementing progressively stricter time bound reductions. The government gives the regulated “polluting” sector free carbon “allocations” which are permits to pollute.
Added together, these allocations equal the total emissions cap. The polluter cannot exceed its carbon allocation unless they directly buy other companies’ allocations or purchase them through auctions (trade).
Sectors not regulated by cap and trade can get into the game by obtaining marketable carbon credits called “offsets” that can be sold to polluters wishing to exceed their allocation. Offsets are unverifiable quantification estimates of carbon emissions savings and subsequent polluter usage.
In theory, as declining allocations squeeze polluters they will find emissions reducing alternate energy sources, thus creating an alternate energy industry based on market-traded offsets and reinvestment.
The European Union cap and trade scheme is our only test case and it resulted in multi-billion-dollar corporate windfalls for some of the biggest polluters and negligible emissions reductions.
That experience has taught us there needs to be a credible tracking system of allocations and offset usage, combined with accurate reliable impartially verified reporting of emissions.
There also needs to be significant oversight of the open market to watch for, and act on, market cap and trade manipulation or falsification of offsets, with real enforcement for violations. It also taught us that powerful corporations could effectively lobby profitable favors from the very governments that doled out the credits and that ineffective oversight of environmental goals and corporate interests could result increased energy costs.
When the B.C. Liberals assumed power in 2001, they immediately deregulated environmental laws from the means based specificity of control and command rules directly overseen by government officials, in favor of cost cutting corporate friendly performance-based standards overseen by company-hired professionals.
This streamlined approach effectively has private sector registered professionals, answerable to their employers and professional associations, upholding many environmental public interest standards.
This move away from direct government oversight rationalized the subsequent downsizing of all the resource ministries and as time moved on, proactive environmental monitoring was all but lost.
If we define faith as belief in the absence of evidence, then we will require enormous amounts of faith to believe the B.C. Liberals’ cap and trade will amount to anything more than a carbon emissions shell game that corporations learn to play.
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Retired Nanaimo resident Ron Heusen writes every second week. He can be reached through the News Bulletin at editor@nanaimobulletin.com.