We all know that the U.S. refused to ratify the Kyoto treaty and then didn’t set anything up in its place domestically. But I bet you didn’t know the U.S. is trading carbon! Well, maybe you did if you’re from California, which has set up an emissions trading scheme, or if you’re from Chicago and you’ve heard of the Chicago Climate Exchange, which currently has 320 members. BusinessWeek did a story in September about how companies are trading carbon now to get ready for a possible national emissions trading scheme.

Why might carbon trading be good for the U.S.? As Kevin Baumert of the Global Policy Forum points out, the U.S. is much more energy inefficient than most other industrialized countries, and carbon trading allows polluters to buy credits rather than make actual reductions in emissions. Carbon trading on an international level could allow us to avoid reductions entirely by purchasing offsets from developing countries. Carbon trading is also attractive to private citizens because it doesn’t directly affect them as directly, as opposed to a carbon tax, which would affect nearly everyone.

But is this good for the environment? Does it actually reduce emissions? I asked Professor Phil Brick of the environmental studies department, and he sent me to YouTube to watch a video called “Cheat Neutral,” which I recommend that everyone watch.

It demonstrates how carbon offsetting not only doesn’t reduce emissions, it encourages people to continue by removing the moral imperative to not pollute. Go ahead and pollute; you can just pay somebody else not to.

Carbon offsetting might make sense if the entire world was already running on wind farms and we didn’t use fossil fuels in our everyday lives, but until we get there, we can’t afford to put off making actual reductions in greenhouse gas emissions (GHGs). U.S. companies need to make themselves as energy efficient as possible and switch to using renewable energy. In short, once we have done everything technologically possible to be sustainable, then it would be permissible to offset any remaining unavoidable emissions.

Of course that’s just carbon offsets. What about carbon trading without offsets? Maybe. Carbon trading certainly does provide an incentive to reduce emissions for those who can do so easily. But so far they’re the only ones who have been doing so. The European Emissions Trading Scheme under the Kyoto treaty hasn’t seen any reduction in emissions so far because none of the participating countries wanted their businesses to be at a disadvantage, so they each allotted too many pollution credits. Some people made a lot of money, but nothing changed.

For some, emissions trading schemes work beautifully. Energy giant BP instituted an internal cap-and-trade system between business units in 100 different countries and were able to reduce their emissions to ten percent below 1990 levels with no net cost, according to Climatebiz.com, a business resource for climate management. The U.S. actually pioneered the first cap-and-trade systems for acid rain a few decades ago, and it was largely successful. But can it work for carbon, which everybody emits?

A lot of people don’t think so. The Wall Street Journal calls carbon trading a “charade,” asserting that people like it because they think they can make money off of it, when really, sufficiently stringent caps will have to mean economic hardship for some. Ken Shepherd of the Business and Media Institute pointed out that California’s utilities can buy power from surrounding states to get around the state system.

Poorer countries (and China) are worried that an international system would keep them from industrializing, and the U.S. refuses to lower its emissions until China promises to.

China will have to get greener, but so will we, and Europe is years ahead of us already in terms of efficiency, so it wouldn’t hurt us to get started now. As long as developing countries can point to the U.S. and say, well look how much they’re allowed to emit, we won’t be able to channel their growth in a green direction.

I think the truth about global warming is maybe a little more inconvenient than most Americans can actually deal with.
I’m worried that people and businesses are excited about carbon trading because they know we’re not willing to be as aggressive as we need to be about actual emissions reductions. I’m worried that we won’t be, that we will show our worst side when it comes to climate change and be the selfish, greedy superpower that the rest of the world loves to hate. I’m worried that we’ll continue to perpetuate gross injustices upon poorer countries with a refusal to shoulder the heavy burden that we’ve created for ourselves.

So while I could maybe see carbon trading as an alternative to nothing, I’m still worried.