Carbon trading v R&D investment

Carbon trading won't save our environment. As Dr James Hansen (one of the world's leading climate scientists)  says http://www.timesonline.co.uk/tol/news/environment/article6941974.ece, it would be better that the Copenhagen conference fails than that a carbon trading scheme be locked in as the solution to climate change. Carbon trading has already been shown to be deeply flawed. It has encouraged fraud, especially in the offset area, with payments for schemes that would have happened anyway, phantom forests, multiple sales of the same trees, and poor monitoring or maintenance of planting schemes. It has also enriched the more imaginative criminal fraternity via intricate tax avoidance scams. Even on the legitimate market, it has perversely incentivised the destruction of forests and peat bogs since countries that weren't covered by Kyoto restictions could still sell carbon offsets and biofuels, so cleared forests and bogs to allow them to capitalise on planting new trees and plantations. And as Hansen says, it is really little different from the Catholic Church's indulgence scheme, where forgiveness for sins was sold for cash.

Carbon trading obviously needs a profit motive to work at all, and to do so it also needs a lot of administration. Yet there is little evidence that it significantly reduces CO2 production. This money could instead be spent on either improving climate science, filling in the remaining gaps, or accelerating the production of cheaper alternative energy sources, such as solar.

Wind power uses a fundamentally mechanical system, which limits the potential cost reductions. Solar uses either indirect production using sunlight concentration via mirrors or direct electricity production using photovoltaics. Solar power using photovoltaics offers a lot more potential for cost reduction and conversion efficiency improvement. It is already clear that in sunny areas, solar power will become cheaper than using energy from the grid (grid parity) by 2015. That will enable those regions to greatly reduce their fossil fuel use. Other areas that are less sunny will eventually be able to import energy from sunnier areas as technologies such as supercables develop. Europe could get much of its energy from the Sahara desert for example.

In parallel, development of electric vehicles and electronic driving technology will allow much greener transport solutions.

These areas will now develop anyway, there is already enough momentum in their markets to guarantee that. I certainly wouldn't argue for any subsidies on the products, which would disincentivise improvements. But increasing research funding would accelerate their development. That would be a much better use of the money that will be wasted in futile carbon trading schemes.

If Copenhagen results in governments agreeing targets and using carbon trading schemes as their mechanism for achieving them, the environment will suffer, because CO2 emissions will not be reduced sufficiently. Economies and quality of life will suffer due to extra costs, without significant benefits. People will become opposed to environmental taxes and it will be harder to solve the problem by more effective means later. We will be locking in a solution that won't work at the expense of ones that might. I fully agree with Hansen. If the climate scientists are right and CO2 is the problem they tell us it is, carbon trading will not solve it, and because this is being pushed as the main measure for solving CO2 emissions instead of incentivising R&D on alternative energy sources, Copenhagen will fail.