Vancouver - the NYSE of carbon trading?

[mr.x]

Let's make Vancouver a carbon-trading centre

Miro Cernetig, Vancouver Sun
Published: Wednesday, October 24, 2007

Since he's taking us down the green road, promising to make British Columbia a world leader in fighting global warming, here's an idea. Why not make Vancouver a major centre for carbon trading?

Carbon trading is already a $30 billion a year market, as companies and governments buy and sell credits to help them meet CO2 emission limits. According to the World Bank, this emerging market has tripled in dollar terms in a year. It's going to explode in the next few years, creating just the sort of high paying financial jobs Metro Vancouver needs.

Premier Gordon Campbell has a chance to push this idea in the next week, when he flies to Lisbon for a summit of European Union leaders.

Our premier is once again following the aggressive and unconventional script of California Gov. Arnold Schwarzenegger, who revived his political fortunes by taking on global warming.

Like the Terminator, who outflanked U.S. President George W Bush by striking climate change deals with other countries, Campbell is essentially going around Prime Minister Stephen Harper on the issue with this European visit.

In Lisbon, the premier wants to ensure the new carbon trading market that B.C.'s creating, joining California and a half dozen other Canadian provinces and U.S. states, will dovetail with the EU's system.

That's needed to ensure B.C.'s carbon credits, which will start to emerge once the province announces the greenhouse emission caps for specific industries and economic sectors, can be traded seamlessly within the EU, the global leader in carbon trading.

The climate change debate is dominated by the scary prospect of melting ice caps, mass extinctions or the arguments between global warming "believers" and "deniers." But it's also creating some new business opportunities, some of them in the financial sphere.

Most people overlook the fact carbon has become a commodity. CO2 credits are already being traded like pork bellies in Chicago.

Europe is the leader having decided a key way to fight global warming is to give green companies and green-minded governments CO2 credits to sell on the open market.

The customers are polluting companies or government entities who can buy these carbon credits, thus avoiding expensive government fines and penalties for creating too much CO2.

It's essentially the selling of indulgences, though the theory is polluters will eventually stop their environmental sins to avoid the heavy cost of the fines.

CO2 trading is turning into a profitable little niche market for futures traders, too. The World Bank notes the cost to buy a carbon credit to offset a tonne of CO2 soared by more than 50 per cent last year, to about $11 per credit. Prices vary, depending on the sectors of the economy, from a few cents to about $25 per tonne of CO2 credit.

Whether it will work here remains to be seen. The government has yet to say explicitly what its CO2 caps and penalties will be in upcoming legislation. But if -- a big if -- they're anything like Europe's, a carbon market will evolve.

It won't be easy to become the market's epicentre. Behind the scenes, California and the other western states are trying to make themselves trading centres, too.

But Premier Campbell could find a niche. If he moves fast, he might succeed in making Vancouver this country's carbon-trading hub.

Don't get too excited, though.

Carbon trading isn't likely to mean enough jobs to build a skyscraper downtown. It's a niche field. But since we're likely to spend billions of dollars on this provincial government's climate change initiatives in the years ahead, why not fight for every white-collar job the battle to save the planet will create?

mcernetig@png.canwest.com


© The Vancouver Sun 2007

[vitc]

Good - go Gordo - my hero!!!

[Weezerfan]

Looks like my dream of buying a house has just been squashed by this friggen policy. Northern BC is going to pay the price of these idiotic policy decisions that penalize the primary producers, the pulp mills, mines, oil refineries, sawmills, smelters, power plants. The forestry industry is already in a mess right now with the prospect of thousands of job losses in the rural areas.

If the people in the lower mainland want this market fine, everyone should pay, don't just penalize the producing side. Penalize the purchasers. Introduce a tax based on the Carbon emissions of the product that is being purchased. Paper will be an extra 2 cents a sheet, oil will be an additional 10 cents a litre, low fat chai lattes will be an extra 5 cents or whatever. If you want to reduce carbon emissions you have to put up or shut up.

I am frankly just getting a little fed up with the elitists crying about the environment but doing nothing themselves about it.

I don't think that carbon markets are even worth it as the scarcity in the market is artificial . Frankly, everyone, including myself is a hypocrit on this whole environmental subject but from my eyes it just looks like a bunch of people getting together and trying to make themselves feel a little better about themselves. The secretary at the Canfor office in Vancouver is equally responsible for the air polution in Prince George as the mill write or labourer. So what I am saying is that just because the smokestack isn't in your backyard it doesn't give you the right to distance yourself from the smokestack. Maybe a huge recession is the only way that we will give our heads a shake.

[Ravman]

June 13, 2008
Scrap the fuel tax, provide real climate solutions
VICTORIA – With gas prices skyrocketing, Gordon Campbell’s new fuel tax will hit consumers in the pocketbook without providing any real solutions, the New Democrats said today.

“As gas prices continue to climb, more and more people realize that Gordon Campbell’s fuel tax is the wrong approach at the wrong time. The new tax is unfair, is hurting consumers and public services, and won’t reduce greenhouse gases. It’s time for Gordon Campbell to scrap the tax and provide real solutions,” said John Horgan, New Democrat energy critic.

“While big oil companies are raking in record profits and gas companies in other provinces have been found guilty of price fixing, ordinary British Columbians are paying through the nose -- whether it’s taxi fares, ferry fares, home heating, or airplane tickets. The new tax will hit consumers where it hurts, and for what? Even the Campbell government admits their fuel tax will barely make a dent on greenhouse gas emissions.”

Government figures indicate that the fuel tax, set to kick in on July 1, will at best lead to a 2.8-per-cent cut in emissions by 2020. Horgan noted that with current gas price escalations the impact of the fuel tax on changing driving patterns will likely be less than previously thought.

Gas prices have increased by about 30 cents a litre in the four months since Campbell announced his fuel tax back in February, and are projected to surpass $1.50 in the coming weeks.

“If he was serious about fighting climate change, Gordon Campbell would focus on big polluters rather than ordinary consumers, he would make public transit more effective and accessible, and he would roll back transit fare hikes so that people have transportation alternatives,” said Shane Simpson, New Democrat environment critic.

Simpson noted that Carole James and the NDP have a Framework for Real Climate Action that outlines a fairer, more effective and more transparent approach than the Campbell government’s fuel tax.

“Price hikes are hitting those who can least afford it – the people who can’t afford new, fuel-efficient vehicles and who are poorly served by a transit system suffering from years of neglect. What we need to do is make big corporations pay for their pollution while providing tools to help ordinary people cut their fuel use,” said Simpson.

“The Campbell government hasn’t given any consideration to the fact that local public services like schools and hospitals are going to have to shoulder the cost of the new tax, and will likely have to cut services.”

Simpson also noted that Gordon Campbell’s fuel tax doesn’t take into account regional differences, despite the fact that many people don’t have access to public transit, and people in the interior and the north often have to pay a lot more to heat their homes.

FOR MORE INFORMATION

Read Carole James' Climate Change Framework (http://bcndp.ca/upload/20080613125311_080613climatechangeFramework.pdf.pdf)

Read the NDP's Climate Change Framework Letter (http://bcndp.ca/upload/20080613125514_080613climatechangeframeworkletter.pdf)

[DrT]

Looks like my dream of buying a house has just been squashed by this friggen policy. Northern BC is going to pay the price of these idiotic policy decisions that penalize the primary producers, the pulp mills, mines, oil refineries, sawmills, smelters, power plants. The forestry industry is already in a mess right now with the prospect of thousands of job losses in the rural areas.

If the people in the lower mainland want this market fine, everyone should pay, don't just penalize the producing side. Penalize the purchasers. Introduce a tax based on the Carbon emissions of the product that is being purchased. Paper will be an extra 2 cents a sheet, oil will be an additional 10 cents a litre, low fat chai lattes will be an extra 5 cents or whatever. If you want to reduce carbon emissions you have to put up or shut up.

I am frankly just getting a little fed up with the elitists crying about the environment but doing nothing themselves about it.

I don't think that carbon markets are even worth it as the scarcity in the market is artificial . Frankly, everyone, including myself is a hypocrit on this whole environmental subject but from my eyes it just looks like a bunch of people getting together and trying to make themselves feel a little better about themselves. The secretary at the Canfor office in Vancouver is equally responsible for the air polution in Prince George as the mill write or labourer. So what I am saying is that just because the smokestack isn't in your backyard it doesn't give you the right to distance yourself from the smokestack. Maybe a huge recession is the only way that we will give our heads a shake.

Agree 100%.
This carbon trading is a huge scam that will cost each of us dearly.
If you want to discourage consumption, a straightforward, transparent tax or surcharge to the user is the way to go, which should be credited against other taxes we pay.

[Eco E]

Agree 100%.
This carbon trading is a huge scam that will cost each of us dearly.
If you want to discourage consumption, a straightforward, transparent tax or surcharge to the user is the way to go, which should be credited against other taxes we pay.

Isn't that what a carbon tax is? a surcharge to the user (you) for using carbon fuels. The carbon tax the liberal gov't has rolled is not perfect by any means but it begins a vital diologue. The is fact is all G8 countries and China will have carbon taxes/trading within 5 years guaranteed, its just the way things are going in international politics. So we can start now and follow it up with taxing producers and provide incentives through tax reform like lower income taxes i.e., fed liberal style and other incentives for conservation like rebates on bicycles, transit passes and the like.

[D J M K]

i wonder how this market will be regulated?

how do you set a value for something as vague as a carbon credit, how do you know the person selling actual has credits and how do you know you actually received it.

to me, this is a interesting way for some people to become very rich by selling nothing

[DrT]

i wonder how this market will be regulated?

how do you set a value for something as vague as a carbon credit, how do you know the person selling actual has credits and how do you know you actually received it.

to me, this is a interesting way for some people to become very rich by selling nothing

Absolutely right. Great point.

"Measuring" how much carbon a business or industry produces will become a big business in itself, adding more cost to us consumers. Alot of fudging and guesstimates are involved, inviting alot of cheating. It is like measuring a person's carbon footprint, ie, mostly guesswork.

You are violating the first rule of taxation, which is it should be straightforward and easy to enforce.

I saw a piece on TV where they were trying to measure the carbon production involved in the making of one Hollywood movie. It was a joke. How many carbon credits is Hollywood going to buy or trade for making a movie (blowing up cars, air conditioning the actors trailer, transportation to location, oil used for plastic props, etc.). It is a sham that is open to cheating and abuse and will cost all of us alot of money.

It is another "do good", "feel good", non-solution to the problem, the brunt of the higher costs passed on to the poor.

[99 G-Line]

I'd love if they started a cap and trade system here...I'll be one of the first loading up on Carbon credits and selling all them back at a nice hefty profit to all those bloody large polluters that we all rely on!!! And I believe the cap and trade is working fairly efficiently in Europe right now, and lets be serious, it'll be way cheaper for companies and us the consumers basing ourselves on cap and trade rather than requiring heavy polluters to carbon capture.

Better yet, let Translink and other transit authorities invest and utilize the profits towards subsidizing and expanding our transit system.

I agree very hard to measure everyone...but I'm pretty sure it'll be easy to hook up a measurement device at the top of all those smoke stacks around the country. Maybe take mileage each year when you re-new your insurance, create a cap, if you break it you pay more or cash in credits. Or better yet because you don't want to pay all the extra incrued costs you buy a bike, save on your own credits, then you buy credits sell em back and individualistically you beat the system!!!

Either way we have to start making some changes...the way we do things now isn't changing anything, so why not try some new initiatives???

[Sounder]

Science could kill this market is a hurry. I wouldn't invest too much on this scam, er I mean scheme.