Monday, 17 August 2009

Carbon Equivalence - The Currency Of Climate Change

As part of my subscription to The Economist, every now and then I am sent a copy of their glossy companion – Intelligent Life. Normally there is usually a rapid correlation between my desk and the rubbish bin because I find the magazine full of vacuous glossy rubbish. This year, something interrupted the trajectory of the magazine, and I am quite glad that it did. Buried in the articles on cars, wine, food, and fashion is a thoughtful little article about carbon equivalence (see article).

When discussing the green agenda, the conversation normally becomes bogged down in meaningless statistics. The idea of carbon equivalence is to establish an exchange rate for our activities so that we can weigh the choices that we make. For example, we have previously calculated that the amount of US corn derived bio-diesel used to fuel an SUV for a month could feed a family of four in Mexico for a year (see post). In making such comparisons, a comparator is needed. The British Physicist David MacKay proposes using the ‘Kilowatt Hours Per day (kwh/d) as the base unit of account in comparing various activities.

The article very kindly points to Professor MacKay’s book on the subject, which is available as a free download from here. This is an immense step forward. If we can establish the currency of carbon reduction, we will then be able to measure and monitor our activities. From a policy perspective, we will be able to establish a value for the taxation of activities that do not enhance the carbon profile, and we will be able to calculate the import duties to be added to the goods of those nations that provide a carbon subsidy to their economies – such as China, India, and the US – by not effectively tackling the issue of carbon reduction.

I have to admit to being surprised to find such a forward thinking article in a glossy magazine. Perhaps I ought not to be too hasty in throwing away future editions?


Sarah Tanburn said...

Hi Steve, and long time no see! There's been quite a bit of work done on carbon trading - as an RSA fellow you're probably aware of their efforts to create a carbon DAQ, and there are lots of sites about trying to help you measure it. I believe that two steps are of enormous significance. One is Obama's commitment to participate in carbon trading, which creates, of course, a vastly bigger market. The other, which has had less publicity but is critical, is the new Carbon Reduction Commitment (CRC) requiring all businesses and organisations in the UK who purchase above a certain number of kwh per annum to participate in a form of market. This will resemble the Landfill Allowance Trading Scheme (LATS) which has been a major spur to local authorities seeking to reduce domestic waste going to landfill - ie the mechanism has a successful pedigree.

All interesting stuff. Are you still in Ipswich? if so, maybe we should meet up for a jar (though probably not before October!)

Sarah T

Stephen Aguilar-Millan said...

Hello Sarah,
Yes, still in Ipswich. It would be good to meet up, but probably in November as I am travelling in October.
I am pessimistic about the efforts of the US in carbon trading. 85% of the permits are going to be given away in opt outs and special favours, which rather limits the pool of funds available for the greening of the US. In the long term, it will be toi their detriment. Once again they have chosen a short term fix in preference to a long term solution.
I am more optimistic about China, which now seems to want to get to grips with the prospect of being the first industrialised green economy in the world. Perhaps Chinese firms might join a global CRC scheme?
Best wishes,

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