First it is often forgotten that it is not the roll of Governments to pick winners. Politicians or those that advise them, rarely have the appropriate experience or skills. Nor are these people constrained by the threat of business failure, as it is not their money that their decisions put at risk.
Second, it is 101 in human nature that all people, given half a reasonable chance, wish to succeed in life. It is built into their DNA. Because of this natural desire, the really successful private sector managers will act to remove any disincentives facing their employees, rather than bother with instigating incentive schemes. Like poorly conceived laws, incentive schemes are expensive, hard to administer and difficult to police.
Thirdly, the law of supply and demand, has worked extremely well in the past and there is no reason to think, that it wont in the future. It should be given a chance to work with carbon sequestering and offsetting.
People of the world want action! Some have already given up waiting and have made a start on their own. Examples of this, particularly amongst those making a living off the land, are widespread. It is unbelievable that Governments might well be TOTALLY LEFT BEHIND as citizens get on with their own solutions, based on common sense and a shared concern for the environment.
May I refer you to “Decision 2010” as published in the Sydney Morning Herald on Wednesday 28th July 2010. Australian of the Year 2007 Professor Tim Flannery commented on a farmer Michael Inwood, who had converted his farming techniques on his Bathurst property, to be more sustainable and had even converted his Ute to solar power, using it to carry out “zero kill” cultivation techniques. This in his mind, ensured that the vital carbon held in the soil was retained. In turn, this improved his carbon footprint and soil integrity remained for subsequent use. In the case of carbon trading, Mr Inwood represents, at least in part, both the demand and the supply. However, the supplier of solar panels that Mr Inwood fitted to his Ute, is also a supplier, meeting a demand.
It is exactly this sort of happening, that suggests that there already exists a strong demand from people (over 90 percent) wanting to improve their carbon footprint. They represent a largely unfulfilled demand and under the proven law of supply and demand, where there is demand, supply should follow. Perceived reticence amongst some citizens, may simply be a factor of credibility. Is this reticence because people cannot see any transparent and reliable structure to commit to and are scared that contributions, will either go into a Government’s general Spend Bin, or Big Business. I suggest that it is.
Action
Various politicians are talking about setting a price on carbon. This seems to imply that Government knows better than the market, as to what people are prepared to pay or do. Our Leaders plan to set targets forcing companies to achieve. Is this really needed? Is there not enough demand to force change? I suggest that if that is the case, then lets cross that bridge, if we need to. First we could remove the disincentives to a free flow of supply and demand by building an Emissions Trading Scheme, with clear rules and verifiable certification of transactions. In other words, delay the taxing of carbon and let us see what the market can do first. At least it will give time for the fuzzy heads to clear and possible consensus to be reached.
The track record of Big Business indicates a very narrow focus on a single bottom line. The time has arrived when this approach is unacceptable, unless of course for these company executives who plan to live on another planet. However more and more companies are being forced to change their approach, driven by customer demand. The presence of a well managed and transparent ETS Desk, will very likely remove peoples fear that ‘Big Business” will be the only ones to gain.
The primary object of such an ETS will be to increase the Supply of carbon credits, at the minimum cost to the community. As there is no point in re-inventing the wheel, it would make sense for Government to take a look at the New Zealand’s Governments example, when setting up the structure and rules for an Emissions Trading Mechanism.
The first increase in supply and demand is likely to be on the supply side and may be the planting of trees and discouragement of the cutting or clearing of currently treed areas. Forestry has very important advantages over other forms of carbon reduction.
They cost relatively little to establish both from a carbon capital cost and monetary capital cost.
They remove carbon from the atmosphere whereas most other Green schemes only reduce the rate of carbon emission.
Forestry is not restricted to big business, allowing Joe Citizen to get involved. This has a positive effect on rural communities.
Trees emit vast quantities of water vapor into the atmosphere, which in turn moderates the immediate climate, allowing other plants to be established, desertification to be restrained and the quality of life to be enhanced.
Planted areas are easy to identify using Google Maps and land titles. This makes them easy and less expensive to verify and administer (Job of the ETS Administrators).
They offer huge work opportunities, in growing the seedlings, planting and adding value with pruning.
The second step is to put in place a Certification mechanism whereby companies are able to advertise the Green credentials of any given product or even service that they offer. Whether it is an energy supply company or a supplier of butter, an airline or supplier of Flat Screen Televisions, the customer wants to know how much their purchase is going to damage the environment. At the moment they don’t know, making it nigh on impossible to alter life choices in favor of the planet.
This is just doing the simple things well and as mentioned above, it removes disincentives. A good example of this at work, are the new intelligent power meters that allow householders to identify the more expensive power usage appliances. Other examples might be a company which designs a new engine that is energy efficient to both build and run. The company gets its reward as people will buy it, simply because it is less expensive. If another company builds a new wind farm, they can sell power with Government Certification as to its carbon footprint.
Summary
The concept of market forces, determining the balance of supply and demand, is a proven tool of a modern democracy. This is especially true where the movement of goods that are vital to society, are managed with a set of rules that offer both transparency and fairness. This would allow the citizens of the world to participate and not just BIG BUSINESS as is usually the case.
This structure is suggested to be most appropriate, at least in the first instance, for the reduction of climate warming gases. Should more impetus be required in the form of a carbon tax, then it is always an option.
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