What is a carbon credit?
A carbon credit is a commercial term used to assign a value to a metric tonne of greenhouse gas emissions. When you purchases a carbon credit from a third party you are helping to fund a project that will either reduce or sequester a metric tonne of carbon emissions from the atmosphere in another location.
As I understand it, "carbon credits" is now just another commodity to be traded on the stock exchange. We all know that trading of commodities is a highly refined and calculated risk taking activity.
Pardon my ignorance on this subject but I'm genuinely trying to figure out how this process will supposedly save the planet.
So, who is selling carbon credits?Storing carbon in agricultural soils presents an immediate option to reduce atmospheric carbon dioxide and slow global warming. Farmers who adopt practices that store carbon in soil may be able to "sell" the stored carbon to buyers seeking to offset greenhouse gas emissions. Before farmers can sell carbon credits, however, they need to be able to verify that changing soil management has increased the soil organic carbon (SOC) in their fields.
Is there a standard for measuring carbon credits?
Whatever the case, anyone who is generating credits must employ an approved methodology that helps them calculate the number of credits they will produce. First, they need to calculate a baseline. The baseline is the amount of gases that would have occurred in the absence of a carbon project, according to business as usual. It is compared to the amount that will actually be produced with the carbon project.
For example, say a farmer installs a biodigester that turns his methane into electricity that is then sold to the grid. He will calculate how much methane would have been released into the atmosphere without the biodigester (the baseline) and compare it to how much is released with the biodigester -- the difference between those two is his number of credits.
To build a credible project that will withstand market scrutiny, a project developer must have all these numbers and his entire project design audited by a neutral-third party, called a validator. And to ensure that his credits have value in the market, his project and credits should be designed in accordance with and certified to a well-regarded standard.
I can visualize a whole industry of bureaucrats springing up to administer this carbon trading scheme. This would include field agents, standards monitors, courts to handle disputes, support staff to shuffle paperwork and keep files and records, credit brokers to trade credits (see link above). Needless to say, this is big, really big. Think of the employment prospects. Hundreds of thousands of people being employed in an industry that didn't exist before.
And we all know how bureaucracies have an innate ability to grow. New departments will be springing up before you know it, committees, sub-committees, administrative support groups and even more administrative groups. Soon there will be inter-departmental groups. liaison groups, foreign liaison groups, reps to the United Nations.
This is fucking BIG.
Maybe it will soak up all the unemployed that are created from the closure of the inefficient auto industry.