Two reasons why a carbon trading scheme won’t work

Here are two examples of the problems with carbon trading.

Firstly, the Government has said it will exclude emissions from agriculture.

Why? Cows and sheep are estimated to account for 15 per cent of Australia’s greenhouse emissions – quite a significant contribution, so you’d think it would be important to reduce them. They have been excluded because it is too hard to measure these emissions with sufficient accuracy to be able to sell emissions permits. It’s not that these emissions can’t be reduced – cattle can be breed to produce less methane, for instance. It’s just that they can’t be traded. 

And in a carbon trading scheme, being able to trade is more important than actually reducing emissions. 

Secondly, the rules of the carbon trading market determine how it works, and these rules are often based on politics, not science. Today’s example: Kevin Rudd has said excise on petrol will be cut so the cost of road transport won’t rise. Yet carbon trading will push up rail costs. So the price signals will drive commuters and freight away from trains and onto the roads. Yet rail transport produces far fewer emissons than road travel. The scheme produces exactly the wrong outcome. Read the full article in The Australian.

A carbon trading scheme is going to be very hard to get right.


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