The Carbon Market

As I was reading various blogs, I read the following very interesting comment following this link.

“As Gore has said many times, he offsets all his carbon expenditures. He’s carbon neutral, more than can be said for most of you. “

Now as many know what he is talking about are “carbon” commodities (carbon dioxide). Under Kyoto every country (save a few well known exceptions) has a carbon allowance. If your industry makes carbon over your country’s allowance you are supposed to buy carbon from a county that is below its allowance. The idea is that the demand would outrun supply, thereby making carbon commodities and futures dear. Well a funny thing happened on the way to the commodities market. Carbon crashed. Hard. Almost none of the industrial countries are paying into the scheme. This makes demand very low and supply is quite high.

In today’s market I could make my household carbon neutral for about six bucks (high fives all around). Does this mean that some industry somewhere will alter its behavior to produce less carbon? Nope, it means that some country like Botswana gets chump change for the sale (brokers in a crashed market tend to make most of the money that changes hands). Perhaps I could go to a country like Sudan, buy their carbon and get them to shut down a carbon producing unit (we call them villages).

Now Al Gore is producing millions of metric tons of carbon a year from flying privately all over the place. He goes to the carbon market, pays the wergild, and gets to claim himself carbon neutral. The world for his travels has millions of tons of carbon more than it would otherwise. Period. Tonight Al Gore will travel to the land of carbon over indulgers to no doubt receive an Oscar. And all will feel so good about themselves because they care.