Carbon trading does not equal climate change

Michael Meehan

Recently I had a conversation that I've become quite familiar with over the years. It usually starts off around climate change, energy and technology, but at some point the subject of carbon trading comes up. Topics range from the recent delays in U.S. climate legislation, troubles in the United Nations’ Clean Development Mechanism Market, carbon credit fraud, and similar issues, all fodder for great conversation. But an inevitable misconception often occurs where the issues start to get clouded. It always surprises me how people treat the politics of carbon and "climate change" as synonymous. Of course, climate change is not carbon trading, carbon tax or a climate bill, but it is surprisingly common how often we make this odd jump of reasoning in everyday conversation. It's important that we know the difference. Here's why.

Solutions to climate change abound, from carbon capture and storage (CCS) to switching out lightbulbs, to Green IT, rapidly growing carbon markets, electric vehiclesand so on. But our insistence on focusing on the problems with these solutions (yes, they all have issues) and using them to cast doubt on the very existence of global warming—or the effort to do something about it—is foolhardy at best. Yet we see it again and again in the current debate on global warming.

I use the word "debate" loosely, and perhaps this is the real problem. Overwhelming scientific evidence supports two primary concepts: that the earth is warming, and that humans are contributing to the increase in temperature. While the scientific methods used to reach these conclusions are open to scientific debate and peer review (as all good science is), it is not really up for public debate. Oddly, laypersons outside the scientific community rarely debate the validity of a complex discipline of say, nuclear physics, but somehow feel it well within their right to argue the science of climate change, though very few skeptics have the scientific background to do so.

Instead the debate should be around proposed solutions, because this is an area where our thinking  can add value. Should we regulate carbon? Should we allow CCS to receive huge amounts of government funding? Should we follow many other countries and institute a carbon tax? Should we focus on carbon, energy or sustainability? Now these are good questions, and it’s what we really should be talking about because, unlike climate science, this is well within the wheelhouse of politicians and businesspeople to determine the best course of action. To assert climate change is false because Al Gore apparently purchased waterfront property (so global warming must be a hoax), or because CO2 is good for plants is taking selective knowledge to a whole new level, missing the big picture and inhibits the innovation our economy desperately needs. 

Take carbon trading, for example. Unlike the rest of the world, the notion of carbon trading induces an amount of vitriol in the American conversation that is, in my experience, unmatched. But the notion of trading carbon as an asset is not new. We have been trading similar assets such as energy and SO2 in the United States for years, and carbon trading itself has been around for decades, employed in many economies as a viable mitigation solution. Some estimates of the size of this global carbon market top $170 billion in 2010. So it's not a question of whether carbon markets will happen. They already have. We're just not at the party.  

I am certainly not advocating carbon trading; like all financial markets, it is an imperfect science, susceptible to gaming and corruption. I am only advocating a focus on solutions. Carbon trading is only one approach to solving climate change, but there are—and need to be—many others. Unfortunately we are focused on this in America, believing somehow that carbon trading casts doubt on everything in sustainability, from startup business plans to federal environmental policies. Few economies or business models depend on carbon trading, but the mere mention of it sends pundits, politicians, and businesspeople into a tailspin in America.  It's an exercise in obfuscation that is both misguided and dangerous. You can see the same trend in other economic initiatives in sustainability, from the EPA GHG Reporting Rule to carbon tax to voluntary reporting. The combined effect has resulted in the environmental and economic paralysis that now grips America. 

The debate on global warming should ignore carbon trading and politics wherever it can. Argue cap-and-trade, doubt it, or support it, but see it for what it is: one of many proposed solutions to climate change. Let's stop muddying the waters (or allowing others to muddy it) by using the solution to cast doubt on the problem. It only slows the U.S. economy and stifles innovation. 

Michael Meehan is a Cleantech entrepreneur and executive in Silicon Valley. He is a founding member of ENXSUITE  (formerly Carbonetworks) where he currently serves as CTO, and has worked in the technology sector for over 16 years. Michael is also one of the founders of the Climate Resource, has advised both the White House and the UN on Cleantech issues, sits on several boards and advisory panels for NGOs and writes regularly for several online and print publications. Voted among the top 5 CEOs to follow by BusinessWeek magazine, you can follow Michael on Twitter here and visit his blog.