Archive for December, 2009

Beyond Copenhagen: Cap & Trade or Carbon Tax? Or what?

Thursday, December 31st, 2009
French President Nicolas Sarkozy

French President Nicolas Sarkozy

The French version of the Supreme Court this week shot down a carbon tax proposal that the Nicolas Sarkozy administration hailed as a fundamental weapon against climate change. The court cited too many loopholes. Today, France’s economic minister is offering a new proposal he says will close many of those loopholes and says the new proposal is a necessary tool to fight CO2 emissions.

As a follow-up to our earlier post looking at the Carbon Offset, we wanted to take a summary look at two other CO2 mitigation plans. Unlike the Carbon Offset, which typically is an industry-driven solution, two others are the so-called “cap & trade” system and the straight carbon tax.   Both require direct involvement from government.

Cap & Trade

What is the so-called “cap & trade” system?  Long in place as a method for managing pollution in Europe, cap & trade is a two-part system where a government sets a cap on the volume of particular greenhouse gases (GHG) (carbon dioxide, mercury, nitrous oxide and sulfur)  can be emitted.  The government then sets up a system where companies can earn “credits” when they emit fewer emissions. Companies can sell these credits to other organizations unable to currently meet their caps.  Proponents of cap & trade contend a government can reach their overall emissions caps at the lowest possible cost.  Critics of cap & trade say the system is flawed, arguing it is cheaper for many companies to purchase the credits rather than invest in technology to reduce their emissions.  Thus, they say, it does nothing to impact CO2 emissions in the long-term and merely serves as an arbitrary tax in the short-term.

Carbon Tax

The other CO2 mitigation proposal is the carbon tax.  Relatively self-explanatory, the carbon tax is an excise tax on the carbon content of fossil fuels (oil, gas, coal).  Those in favor of the carbon tax say it is the simplest and most efficient way of pricing emissions and will quickly spur investment in carbon reduction.  Those against say it is a regressive tax that punishes those smaller companies unable to withstand the penalties and will hurt small business and put people out of work.  Many economists and experts believe the carbon tax should be phased in over time so as to allow companies and organizations adapt.

At the end of the day there are arguments from every angle.  In whatever way CO2 mitigation is achieved, we can rest assured it will take not only determined investment in technology, but also a sustained belief that it is our obligation as people to do what we can to save the environment, and ultimately, ourselves.

www.swapsol.com

Tags: , , , , , , , , , ,
Posted in Uncategorized | No Comments »

Beyond Copenhagen: What is a Carbon Offset?

Thursday, December 17th, 2009

Copenhagen is coming to a close with reports that a deal may not be reached.  Aside from geopolitical arguments on who should shoulder more burden, there is the added confusion of what’s being done thus far.  Carbon offsets is one method, though not widely understood.  If you want to understand carbon offsets, talk to someone who’s used up their cell phone minutes and is now paying overage charges.

Copenhagen Dec. 2009

Copenhagen Dec. 2009

In response to growing governmental calls to reduce carbon emissions or face penalties, industry has had to come up with a variety of strategies to comply.  In Europe, they use “cap & trade.”  In the U.S. there is similar legislation being proposed on top of new calls for a carbon tax.  Similar to a cap & trade, the carbon offset has become a way to get credit for the job, but give breathing room to improve compliance with new CO2 emission regulations.

What is a carbon offset?  To quote Carbonfund.org, “a carbon offset represents a reduction in carbon dioxide (CO2) somewhere else…. to balance out the emissions you cannot reduce”.

A carbon offset is a financial tool a company or organization uses to comply with greenhouse gas reduction rules.   For example, a governmental body decides that a Company should annually emit less than X-tons of CO2 into the air yearly. But that company produces greater than that amount.  By itself, that company would have a very difficult time meeting that requirement.

So in order to meet these new regulations, industry has developed the carbon offset.  The carbon offset allows CO2 emitters (companies, governments, citizens, organizations) to invest directly into projects which either are carbon-negative or create carbon-neutral or renewable energy, e.g. carbon reforestation, wind farms and Carbon Capture and Storage (CCS) projects.

By purchasing credits and giving money to organizations like the Carbon Fund and Terrapass, you can, in essence, reduce or eliminate your own carbon footprint.

The growing green shift has been a boon for carbon offset providers. According to the UN, 147m tons of the credits have been sold worldwide under the Kyoto Protocol. But this market could become very big business following the passage of any US climate bill. Climate legislation is currently stalled in the Senate, with Democratic leaders not expecting a vote on the bill until early spring

Given the multitude of CO2 mitigation proposals being debated, Swapsol looks forward to playing a fundamental role in helping companies benefit by converting CO2 and earning valuable carbon credits. Every possible action must be taken to reduce anthropogenic CO2 and avoid climate disaster.

Tags: , , , , , , , ,
Posted in Uncategorized | 1 Comment »

Swapsol supports Worldwatch natural gas play at Copenhagen

Wednesday, December 2nd, 2009

Could natural gas be a player in the new world climate order?  It looks like three organizations will be pushing for just that in Copenhagen next week.   The American Clean Skies Foundation (ACSF), the UN Foundation and the Worldwatch Institute say they will jointly “explore the potential for natural gas to accelerate the world’s transition to a low-carbon economy,” according to Worldwatch.

Sour gas pipeline, courtesy CBC.CA

Sour gas pipeline, courtesy CBC.CA

They will announce that new sources of unconventional gas could (and would) more quickly help the world turn away from oil and coal as a primary source of energy and spur new energy policy.  That’s correct if certain truths are taken into account.  There are considerable reserves of natural gas that remain capped due to high concentrations of hydrogen sulfide (H2S) that make them “sour.”  Many of these reserves are in remote areas where the cost of production makes it economically unattractive.  In fact, nearly 40 percent of the world’s natural gas reserves is sour, according to French oil and gas giant Total, s.a.

Many experts say more attention needs to be paid to renewable sources like wind and solar.  That’s true, but where are we now?  Wind and solar are growing sources of energy, but they currently aren’t developed enough to make an overnight change.  Will natural gas be the answer?

H2S, sometimes known as “sewer gas,” is the oil and gas industry’s enemy No. 1.  A chief part of the refining process is removing sulfur and H2S from raw streams to be able to bring refined natural gas to market. So yes, natural gas should play a fundamental role in any low-carbon policy proposed.  But this is possible only if more attention is paid to technological advances in refining it.

As we look toward Copenhagen, SWAPSOL agrees with the Worldwatch Institute that greater investment is needed in natural gas to play a pivotal role in a low-carbon environment.  Wind and solar technologies are exciting and are quickly gaining ground in the fight against climate change, but today we have an opportunity to both lower carbon emissions using natural gas, as well. Incorporating natural gas into the mix of solutions will also create needed jobs through additional investment in refining technologies. These technologies hold the key to preventing H2S from holding a tremendous volume of natural gas hostage.

With the SWAP, we can eliminate two “bad actors” in a single chemical process, protect the environment and improve bottom lines by reducing costs and creating jobs simultaneously.  We can look at CO2 not as an enemy, but as a friend and use it to profit in a new energy economy.

Tags: , , , , , , , , , , , , , , , ,
Posted in Uncategorized | No Comments »