A
longside the rise in harmful CO
²
trading, on the other hand, enables them
emissions in recent years, a new breed to achieve substantial reductions – even to
Finance and in
of commodity market has emerged, offering net zero, while supporting the development
businesses an incentive to play their part of clean technology in developing markets.
in slowing down the growth of greenhouse In theory, for every ton of C0
2
emitted, a
gas emissions and the impact on climate company can buy certifi cates to attest
change. that the same amount of greenhouse gas
The commodity being traded within has been removed from the atmosphere
these new markets is carbon, in the form through renewable energy projects.
of carbon credits and, while the rules of ‘Methane capture’ can help “Demand for our services has risen
trade vary from one country to another, the
prevent closed mines from
sharply, up by 70% on last year,” says
ultimate aim is to reduce carbon emissions
venting methane into the
Sneyd. “We work mainly with clients who
atmosphere.
on a global scale. have a customer-facing presence, who
Under the Kyoto Protocol there are a feel they have some carbon exposure, and
number of ways in which countries or effectiveness of the ETS.” want to do something about it. There are
operators within developed countries can Beyond the compliance zone of the heavy signifi cant benefi ts, including cost savings
v
acquire carbon (CO
²
) reduction credits. industrial fi rms, companies can participate and enhanced stakeholder perceptions, but
estment
These include International Emissions in carbon trading on a voluntary basis, with they are doing this on a voluntary basis, and
Trading, where countries can trade in the help of carbon consultancies like the it is encouraging to see more organisations
the international carbon credit market to Carbon Neutral Company. of all sizes and sectors wanting to get
cover any shortfall in allowances, and the Among the many barriers to achieving the involved.”
Clean Development Mechanism, where a
developed country receives tradable carbon
credits for meeting carbon reduction targets
»If a company’s carbon emissions fall below
by investing in carbon reduction projects in
a set allowance, that company can then sell the
developing countries.
difference, in the form of carbon credits.
Using a form of emissions trading
known as a cap-and-trade scheme, heavy
Because forest regeneration
industrial energy companies within the
is time-consuming,
Kyoto signatory countries can buy or sell alternative energy sources
credits. This means if a company’s carbon
are needed.
emissions fall below a set allowance, that
company can then sell the difference, in
the form of credits, to other companies that
exceed their limits.
Within the European Union, they do so
through the European Union Emissions
Trading Scheme (EU ETS), where individual
governments limit the supply of permits
needed to emit carbon.
A rocky beginning
Following a diffi cult start – when too many
permits were issued, leading to a fall in
the price of tradable carbon permits and
removing the impetus for companies to
reduce internal emissions or offset them
– the ETS is back on track.
“To give the process its due, nothing
on this scale had been attempted before,” sort of targets that environmental scientists An environmental cause
explains Bill Sneyd, Director of Advisory are calling for – 80% emission cuts globally Early in 2008 investment bank Merrill Lynch
Services at the Carbon Neutral Company. – is the time it takes for businesses to alter announced a ‘carbon credits-for-forest
“But at the end of the fi rst year of the second their internal processes in order to achieve preservation’ partnership, where it would
M
O
phase, which ends in 2012, carbon prices even 20% reduction in the short to medium pay villagers in the Sumatran province of
F
.
C
R
3
2
are fairly steady at €18 (£16) per tonne, term. Aceh to stop cutting down their forests,

1
© and there is optimism about the long-term Carbon offsetting through carbon in return for carbon credits or carbon
www.yearofplanetearth.org PLANET EARTH 71
PE14.kj.mw.indd 71 16/2/09 11:32:09 am
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