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Carbon Trading!

Is it a neat idea or another ‘predatory secretive system of  international collaboration’?

Carbon trading is a plan to control carbon emissions by converting CO2 into a commodity. It is based on a logic which says you can’t emit CO2 until you absorb same amount of it. Mix this idea with market.  In order to emit CO2, you may absorb CO2 yourself or you can pay someone else to do it for you.

Under carbon trading plan, emitting CO2 without license will be illegal. If you want to emit CO2 then you have to buy some CO2 emitting rights.  The CO2  emitting rights will be sold by the people who can absorb CO2 from the environment, which is also called carbon credit. So, if you have a tree which can absorb CO2  of environment on your land then tree has a value as carbon credits which can be sold on market.

Looks very simple and fair. Will it be fair to all the players of game? May be or may be not! Lets see what possibly can happen to a country which is right now poor and not in control of its own destiny?

For example, lets take papua new guinea. It is rain forest rich country. Very under developed and large population still lives in forests. Under carbon trading rain forests will become an ‘oil field'(New metaphor to replace gold mine).  Lets see how may or may not this system potentially exploit people of papua new guinea.

After this system is in place, lots of people want to sell their carbon credit in international market because purchasing power and demand is initially biased towards already rich countries then most carbon credits will be bought  by these countries. Eventually, papua new guinea will become richer with this inflow of capital then they would like to develop themselves. So, it will need to consume its own carbon credits to do development. This will drive up price of carbon credit and in result more countries will be interested in creating rain forest and sell carbon credits. Soon all countries will be producing their own carbon credits and there will be full balance of human made CO2 emissions.

The real world implementation of carbon trading may diverge multiple ways from above story line. Lets see one possible divergence. Since, papua new guinea is not so rich. Most of the wealth of the country is in control of ruling elite of the country. A big chunk of the carbon trading money will go in the hands of this elite by acting as brokers of carbon trading, by tax collection, or just by owning the land. This elite is being paid for doing nothing. They also have to make sure no one else do anything in papua new guinea. They will enjoy the money and make sure this money will not reach to the masses. The rich and powerful world will have all the incentive to support this corrupt elite because it keeps the carbon credit prices low. At the end, it will reduce into a system in which rich world consumes and pay the elite of papua new guinea to maintain its population underdeveloped and keep their forest intact without doing anything.

You may guess which one of the above two scenario going to be true under carbon trading. I will bet on the second scenario. Lets see what happens.

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