Wednesday, March 23, 2005

A Market Solution to CO2

Market based techniques to reduce global carbon emissions are centered the buying and selling of pollution credits. Could this be implemented on a local or individual level? Is it possible to assign a set amount of carbon that an individual can dump into the atmosphere? If an individual exceeds that amount, they have to buy a credit from somebody who has used less then their quota. The conservationist makes money and the polluter must pay extra. If you lower the quota each year then emissions will go down. There are some major problems with this approach. Implementation would be a very difficult thing to accomplish. First, the problem of measuring emissions consumption is a huge hurdle to the modification of the behavior. Then you must have an efficient way to set price and exchange the carbon credits.

There are other approaches to the issue. A carbon-based tax just punishes consumption but does not directly reward conservation. You need to reward good behavior by giving people the ability to directly make money on their conservation of resources. In addition, it would punish others for bad behavior by forcing them to buy credits to pay for their extra pollution. How could we make this a binding legal agreement that people could not drop after they have agreed to participate?

While I see that the 10% Challenge is a good idea, it is voluntary and does not provide an incentive other than to “feel good” about what your doing. While you can save money implementing these steps, the average person needs to see some kind of direct economic benefit in order to change a very big part of their behavior. Consciousness must be raised, but tree hugging will not solve the problem for us.


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