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Wednesday, 16 July 2014

Carbon Trading and its Ethical Concerns

"Environmental Ethics"
            As a regular listener of BBC World Service, it was intriguing for me to listen to a particular episode of their “Business Daily” program several months ago. It was quite remarkable that it was about one of the important issues related with environmental ethics. The main theme of the program was about Carbon Trading and its economic aspects, but it also had a lot of discussions about the moral obligations related with it. After listening to it and reading few more articles on the internet, it was not a surprise for me to choose this topic for expressing my views. So, this article will address the ethical issues related with Carbon Trading.
            Before proceeding with the concerned ethical questions let us examine what exactly Carbon Trading is. Carbon Trading, or alternately Emissions Trading, is a mechanism using which a country that produces more carbon emissions (Carbon Dioxide and similar Greenhouse Gases) pays some amounts to a country that produces less carbon emissions. It is like purchasing the right to release more Carbon into atmosphere (Investopedia, n.d.) if some country is releasing more carbon emissions than global average or some accepted standards. This can also be applied to individual businesses where bigger polluting businesses can buy emission rights from relatively cleaner businesses (Investopedia, n.d.). The ultimate goal of international as well as inter-business Carbon Trading is to keep the average emissions under balance or under some specific targets.

            The ethical dilemma related with this issue is that although the poorer developing nations benefit by receiving good amounts, instead of decreasing the overall emissions by reducing the dependency on fossil fuels, it encourages nations and businesses to continue with their emissions by paying amounts to lesser polluting ones. To be more precise, it gives a vague sense of contribution to the environment. Without any doubt, circulating the money to another economy does no good to the environment unless the receiving nation uses it in environmental conservation efforts. And there are no guarantees that the received sum will be used in such efforts because developing nations have a lot of other issues to handle. Moreover, it cannot be discarded that some nations may choose to pay larger amounts for getting the rights for more carbon emission, more willingly than cutting it down.
For instance, according to one of the speakers in the BBC World Service’s program, some multinational companies use Carbon Trade to their advantage by continuing their emissions in the industrial nations and calculating their overall average by including their branches in lesser developed countries which will obviously have fewer emissions. In this way, they avoid cutting down of emissions as well as payments to lesser developed countries (BBC World Service, 2013). Hence, despite of being a noble idea, it can go totally wayward from its actual objective and may not be effective if other controlling standards are not enforced.
            One of the ways to tackle this problem would be to implement rules to specifically cut down the carbon emissions by certain amount every year. The developed countries and large scale industries have a bigger role to play in this regard. From a cultural relativist viewpoint, it would be fair to all if research is done in finding cheaper sources of emission free energy. In the same way, research can be done to improve the production technology such that emissions are reduced like research on increasing fuel efficiency. Another excellent measure would be to encourage countries and businesses to spend some amount every year in Afforestation and Reforestation. This will help to absorb the carbon in the atmosphere and counter the effects of industrial emissions. Nevertheless, the actual solution to the ethical dilemma would only come when Carbon Trading will give the opportunity for the developing nations to grow too. So, it would be great if cleaner projects are tried and tested in developing nations, and if successful, replace the older industrial methods in the developed countries.
            Looking at all those scenarios, it is very unlikely that this issue will be wholly ignored under any circumstance, even though the process of making it a success is hugely complex. Nonetheless, it would not be a complete problem as well. All we can say is that Carbon Trading can become more of a problem than a solution to environmental problems if any of the proposed solutions are not considered. To be honest, it is very easy to suggest than to implement but it requires effort from all concerned parties to find the appropriate collective solution. This proposition can be supported by the fact that the United Nations is facing many problems in running global Carbon Trading efficiently. Also, an example can be taken from tax fraud case in the EU’s Emissions Trade Scheme (ETS). In it many businesses were engaged in illicit practices concerning Carbon Trade and it was only uncovered after 15 billion Euros of taxes was defrauded (Rogier, 2013). It can be said that if EU was stricter from the beginning, so much of money could have been used in other useful sectors and the businesses would have been more concerned on reducing their emission quotient instead of fraudulent practices. So, we can say that Carbon Trading can be a problem under certain situations but not always.
In conclusion, this case makes it very clear that as long as money is involved, it is likely that the involved entities would not be honest in their efforts and will always keep economic well being as their topmost priority.  Even so, it should not be forgotten that everything has its good and bad sides and we cannot separate them. For finding a constructive solution to this issue we should not ignore the recommendations from all groups associated with it, even if they are hard to apply or negligible at the moment. Otherwise, there can be even more carbon emissions and financial frauds in the name of Carbon Trading.
References:
BBC World Service. (Producer) (2013, December 20). In the balance: Paying to pollute. Business Daily. [Audio podcast]. Retrieved from http://downloads.bbc.co.uk/podcasts/worldservice/bizdaily/bizdaily_20131224-0830b.mp3            
Rogier. (2013, December 18). Criminality and negligence in the European carbon trading market. Retrieved from http://www.carboncredentials.com/criminality-and-negligence-in-the-european-carbon-trading-market/    

Investopedia. (n.d.). Carbon trade. Retrieved from http://www.investopedia.com/terms/c/carbontrade.asp

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