Environment Magazine

An increasingly complex greenhouse gas trading system seems to be the preferred way of tackling emissions but is there a simpler and more transparent way to do it?  Many business leaders think there is and that is to just tax emissions.

The cap and trade system aims to reduce carbon dioxide by setting a cap or ceiling on carbon dioxide emissions and issuing permits which are bought by the public and traded in the open market.  Over time, the system reduces the number of permits which will then force organisations to lower their emissions.  A tax imposes a fee for every tonne of carbon dioxide used.  The main users, or emitters, of carbon dioxide are the users of fossil fuels.  A tax would increase over time forcing users to switch to low carbon technologies.  Both cap and trade and a tax should have the same result.  They provide a stick for industry to move to a lower carbon economy and both will increase the cost of energy.

A new report, Low-Carbon Energy: A Roadmap, by the Worldwatch Institute argues that new technologies and energy saving can rapidly reduce carbon emissions.  The report, which can be downloaded, here Download Report Now , is optomistic about the future of renewable energy if governments act now.  A summary follows.

Technologies available today, and those expected to become competitive over the next decade, will permit a rapid decarbonization of the global energy economy. New renewable energy technologies, combined with a broad suite of energy-efficiency advances, will allow global energy needs to be met without fossil fuels and by adding only minimally to the cost of energy services

The world is now in the early stages of an energy revolution that over the next few decades could be as momentous as the emergence of oiland electricity-based economies a century ago. Double-digit market growth, annual capital flows of more than $100 billion, sharp declines in technology costs, and rapid progress in the sophistication and effectiveness of government policies all herald a promising new energy era.

Advanced automotive, electronics, and buildings systems will allow a substantial reduction in carbon dioxide (CO2) emissions, at negative costs once the savings in energy bills is accounted for. The savings from these measures can effectively pay for a significant portion of the additional cost of advanced renewable energy technologies to replace fossil fuels, including wind, solar, geothermal, and bioenergy.