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Carbon trading is controversial yet effective tool to combat climate change

Global warming as indicated by sea levels on the rise; the weather is increasingly becoming more extreme and unpredictable. Species after species face extinct and severe water shortage threatens dry regions. 
All of these are consequences of our greenhouse gas emissions that must be stopped or reduced now.  Meany weapons have emerged over the past decades to combat the global warming, perhaps none is more controversial rather more effective than the idea of carbon trading, where polluting nations can buy carbon credits from poor countries – basically continue to polluting. The idea was to stick a price on carbon units so that individuals, companies and governments can trade like stocks and bonds.
 But what really is a carbon unit? According to a YouTube channel known as Carbon Control, which provide a simple explanation that a carbon unit is a ‘permit’ (certificate) to emit one tonne of carbon dioxide gas (CO2).     
This is equivalent to five (5) months of continuously driving of motor vehicle or a total of eight (8) return flights on Air Niugini, PNG Air or a chartered aircraft between Mt. Hagen and Port Moresby.
So the next question is how does the emission trading scheme work? Or in another words, how exactly a price is determined or agreed upon and by who? The short answer is the emission trading scheme determines how much CO2 the greenhouse gas (GHG) can emit and the price is controlled by the carbon market.
Well, what is an emission trading scheme? The Carbon Control YouTube channel further explains that in 1997 most of the countries in the world signed the Kyoto Protocol, with the aim that all industrial countries in the world should reduce their total emissions of GHG. Papua New Guinea is one of the countries who signed this agreement.
The United Nations (UN) distributes quotas of carbon unit to those industrialized countries that have signed the treaty.     
These units issued by the UN set a limit under level emissions or commonly referred to as caps. This limit is equivalent to total amount of CO2 each of these countries are permitted or allowed to under the allocation of quota by UN to emit into the atmosphere and which is less than anticipated emissions.   
In this scheme, some countries are so successfully in reducing emissions that they simply don’t need all the carbon units (permits allocated under the UN quota) they been allocated or permitted to emit, while other countries may struggle to reduce their emissions and need more units (permits).
Countries may therefore buy and sell carbon units (permits). The price of tradable units depends on how many there are in circulation, similar to a conventional stock exchange scenario; prices vary to supply and demand.
Each country is individually responsible for deciding how to cut its emissions. Heavy industry is often responsible for large share of a country’s CO2 emissions. Many countries have therefore decided that these industries must makeup largest contribution towards emission reductions.
Let us see an example; Factory A and Factory B both have been allocated carbon units by their authorities (governments). Factory A decides to reduce its carbon emissions by implementing climate friendly measures. Their reduction efforts are in fact so successful that they have carbon units to spare. This spare carbon unit can be sold.
Factory B, on the other hand, is able to use its emissions; they have to buy carbon units from Factory A.
However, Factory B can also covers its emissions by investing in carbon reducing measures (offsetting projects) in Factory C which is usually located in other developing countries like Papua New Guinea.
According to the Carbon Control channel, all these countries that have any applications under the Kyoto Protocol; the UN can still approve the emission reductions and give Factory B carbon units (additional permits to the prior quota allocated) equivalent to the reductions in Factory C.   
So regardless of whether Factory B buys carbon units from Factory A or C, the result is to reduce carbon emissions.
According to Al Jazeera English TV Show hosted by Riz Khan discussing carbon markets with the question “Is carbon trading a scam or is carbon trading a false solution to the climate change?” Chief Executive of European Climate Exchange Patrick Birly said the European Union with 27 countries member is probably the first region in the world that had gone ahead to put a price on carbon emissions, when Kyoto Protocol called for reduction in GHG emissions.
He said on the TV Show the industrialized nations buy carbon credits or the right to burn carbon (permit). As a result, developing countries sell carbon credits, giving up the right to burn carbon emissions.
Mr. Birly explained that the system is all about the cap, putting a limit on the amount of carbon emissions that being put into the atmosphere.
TV Show host Riz Khan asked Patrick Birly “What has been European Experience?” “Well, Europe is the only place in the world that has gone ahead in putting a mandatory price on carbon emissions," Mr. Birly said.  “It’s all about setting a limit on the amount of carbon that can be pumped into the atmosphere, slowly reducing the cap over time,” he added.
As a result of this, companies that are able to cut their emissions quicker than the projections by scientists and politicians, they are incentivized and able to sell their additional credits to those companies who are not reducing carbon emissions.
“Under the Kyoto Protocol, in the beginning of 2008 runs through to 2012 the Europe maintains its target and will continue to do that,” Mr. Birly added.
“The carbon emission system and pricing in Europe is working, finding the balance between the economic gains (profits), global equality and ecological concerns,” he concluded on the show, putting to rest claims that carbon trade is a scam or a false solution to climate change.
Today, many regions and countries have implemented their carbon emission trading schemes. Canada as a single country has gone ahead with setting up carbon emissions scheme and offsetting projects in each province. China and United States of America still maintains their top positions in emitting CO2 into the atmosphere when looking at each country emission level.
For the Asia-Pacific region, former Australian Climate Change Minister Greg Combet has raised the prospect of an Asia-Pacific carbon trading scheme, which he says would eliminate any problems of competitive disadvantage on the carbon market.
On ABC News (Australia) Mr. Combet reportedly said Australia and New Zealand has emissions trading schemes, California has got one, Korea is introducing emissions trading, pilot projects generated within China for emission trading and other countries are taking steps in the direction but in the Asia Pacific region there is a scope that need to come forward for us to develop an integrated approach.
At a national level, PNG has journeyed remarkable well within the climate change legislation framework under the stewardship of former Climate Change and Environmental Conservation Minister Sir John Pundari. 
In the global scenario of carbon emissions trading schemes, PNG place itself appropriately to benefit from carbon offset projects with NEC-approval of the National REDD+ Strategy (2017-2017) that provides the policy guidelines for conservation and protection of rainforests as carbon sinks.
This means that PNG will have or is having the opportunity to make money from its standing forests to offset carbon from those struggling nations to emit carbon quota allocated by UN.
Currently, PNG is chairing the Coalition for Rainforest Nations (CfRN), after intensive lobbying from two other forested countries Coasta Rica and Guyana, to lead the world’s forested countries in the carbon trading schemes to negotiate the conservation of indigenous forests as carbon offsetting projects.
PNG thus stands a chance of benefiting from greatly from the ‘green economy’. 
Peter S. Kinjap is a freelance writer and a blogger, email: pekinjap@gmail.com     

Photo : Supplied 

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REDD+ a prospect in ‘green economy’ growth

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