Some emissions trading schemes give preference to local projects. For example, Tokyo's greenhouse gas emitters can purchase credits from outside Tokyo, but are limited in how many they can apply against their emissions.
What are the problems with the credit methods?
Lax verification for carbon-offset projects has been a problem for several schemes. For the credit-creating projects to be effective at reducing overall greenhouse-gas emissions, the scheme operators are supposed to approve only projects that would otherwise not have gone ahead. The auditor-general criticized the Alberta Department of Environment and Water for allowing carbon credits for emissions-reducing activities that have become common practice.
The Alberta report found a lack of standards for how agricultural credits were verified—not one of the credits the auditors checked could be confirmed. It also pointed out that there was no standardized, accurate method for measuring the emissions from oil-sands tailing ponds, which store contaminated water, clay, sand and bitumen from oil-sands processing.
Many opponents of emissions trading programmes also argue that companies are likely to purchase carbon offsets instead of reducing emissions by adopting new technologies or changing their operating practices.
How can carbon emissions trading schemes improve?
Discussions about how to improve emissions trading schemes have often focused on better measurement, reporting and verification. Better satellite technology, for example, could provide more accurate CO2 emissions measurements. In the case of Alberta, the auditor-general told the Department of Environment and Water that it had to offer better guidance to improve consistency in emissions estimates and project approvals, and provide proof that the measurements were being carried out appropriately.
This article is reproduced with permission from the magazine Nature. The article was first published on November 25, 2011.