Reducing your carbon footprint under an Emissions Trading Scheme

Reducing Footprint "Waste of Time" - from The Australian.

Email from my father:

Nicholas

Is what I read in yesterday's paper correct in that putting in energy saving devices like the reduced emissions light bulbs, solar heating etc will do nothing to reduce emissions but will only free up more energy for the protected providers to sell to someone else.

If this is the case, why am I and others bothering apart from perhaps saving a few dollars a year on electricity bills?

My reply:

Broadly, it's true. If your power company is allocated more free permits than they need because you, and others, voluntarily reduce their emissions - which is probably likely with Rudd's stupid scheme - then yes, that will be the result.

I pointed this out to you when you got that company in to change your lightbulbs for free - that they would then sell your carbon credits to another polluter, resulting in no net difference.

But there are other ways of looking at it. The idea of an ETS is that you limit the total amount of pollution, making it a scarce but valuable resource. Therefore it is used by those who can get the most economic benefit from it. So by cutting your emissions, you free those "wasteful" emissions (in that you don't really need incandescent light bulbs) to be used by a more productive part of the economy.

For this you get an economic benefit in the form of cheaper power bills. This is the basic valid idea of an ETS.

For the moral part of it, you get two things: 1, you know that you personally are emitting less carbon and doing your share, and 2, you are allowing a part of the economy that has more need of the carbon emissions to make use of the scarce but valuable resource.

If the result is "windfall profits for power companies" blame Rudd's stupid quarter-hearted badly designed useless scheme, not the concept itself. A very low cap on carbon emissions, and tons of free permits, makes it all very fuzzy and inefficient, and the economic benefits for both industries and individuals in cutting their emissions gets distorted and becomes meaningless.

posted by Nicholas @ 12:45 PM