Carrots and Sticks

Another article in the London Guardian's ongoing Climate Change section comes from the editor of Ethical Corporation magazine. It's a hodge podge of info talking about how the rising costs of carbon trading will affect corporation bottom lines and, ultimately, consumer costs. First, carbon trading explained:

The idea behind emissions trading is that carbon dioxide - a major cause of climate change - can be traded by those producing it. Companies producing more CO2 than they are allowed must buy allowances from those using less. Starting at the beginning of this year, the EU emissions trading scheme requires the largest individual emitters of carbon dioxide to begin trading in carbon allowances. Under phase one of the plan, the government set a carbon dioxide emissions cap. This was then broken down and allocated to 1,000 installations within electricity generation, oil refineries, iron and steel and other heavy users of energy consuming greater than 20 megawatts supply of fuel input. Each installation has been given a CO2 allowance and, if it emits CO2 above that, it must buy unused allowances from others in the scheme.

But there's a silver lining:

But, says Mr Robins, it's not all gloom - there are also opportunities to be considered "for those who understand the dynamics of the coming carbon crunch and invest in the industries of the future". These include solar, wind and other emerging renewable energy power sources. Many of these companies are currently listing on AIM, London's alternative stock market. Apparently, capital is not in short supply, and - for some, at least - the coming carbon crunch could have a silver lining.

That's what happens when you don't have "voluntary" environmental regulations (which just serve to be lip service in the end).