Time for Government to Rethink to Reduce Carbon Emissions

Carbon Offsetting businesses of all types are already starting to feel the impact of the crunch. Consumers are tightening their belts while talks on a post 2012 Kyoto Agreement have stalled undermining investment in carbon offset projects. In Europe the 2020 commitment to reduce carbon emissions by at least 20 pct below 1990 levels with 20 pct of energy coming from renewable energy sources looks unrealistic especially when balanced with the need for energy security. On a positive note post the US election a US initiative to reduce carbon emissions is likely. But the credit crunch will make any larger regional or global consensus unlikely.

In a credit crunch how should European Governments maintain momentum to reduce Co2 emissions? Damian Kissane from the Carbon Credit Agency argues that they should take this opportunity to re-think some of their carbon emissions policies and introduce more positive incentives for individuals and businesses. The current policies are either supply focused (cap and trade or renewables targets) or crude direct taxation of demand (personal levies, air passenger and car duties). These are not positive incentives for individuals to reduce carbon emissions or for carbon offsetting – try asking anybody in Northern Europe whether they will give up their annual Summer holiday. Similarly, most domestic energy markets are not open to competition, as a result, cap and trade is ultimately just another tax on the consumer while renewables targets lack the political will and similarly don’t influence consumer demand.

“If we want to genuinely reduce emissions in Europe we need to positively incentivise consumer behaviour and not tax the need for energy”. For example the UK Government’s winter fuel subsidy to older people or the European social security benefits paid to families could be tailored to encourage the beneficiaries to reduce carbon emissions by purchasing alternative or green energy. This could drive an enormous change in consumer demand with little additional cost to Governments. Similarly, reducing the carbon emissions from personal travel should start with town planning and the Co2 emissions from actual car usage rather than taxing the size of a car at the expense of the European car industry.Unfortunately, in the current crisis crunch the temptation by European Governments to introduce more so called “green taxes” to raise revenue could prove irresistible.