Carbon Trading Coming to Ontario

I recently gave an interview to 360 Energy about the newly announced plan to start a cap and trade
program for carbon dioxide trading in Ontario.

Here is the link to the interview.

In the interview I cover some of the pros and cons of carbon trading and provide some thoughts on other carbon related topics.

More on Rising Sea Levels

Continuing from my previous post, here is another great website to visit to learn about the effects of rising sea levels.These flood maps from fire tree let the user roam the globe and see the effects of rising sea levels on different countries. Thanks to Arijit for informing me about this website.

Rising Sea Levels

Here is a really useful infographic from the New York Times showing the effect of rising sea levels on US coastal communities. With even moderate rises in sea level, Miami, Galveston and New Orleans get hit hard. Also notice how vulnerable a number of important airports are to flooding.

Carbon Emissions, 1990 - 2009

In an article titled "O Canada", The Economist points out that Canada recently withdrew from the Kyoto protocol. The Kyoto protocol does not apply to the world's two largest emitters (China and the US). The huge increase in emission by countries like China, Turkey, Australia and Spain are cause for concern and make it more difficult to engage in future climate treaties. Domestic energy policies focused on a low carbon economy are the best way to go, but these seem to be the most difficult politically. Since about 2/3 of global greenhouse gas emissions comes from energy, any serious effort to reduce emissions is going to have to come from reducing fossil fuel consumption and increasing renewable energy. Climate change, energy security, peak oil, new technology and green consumers are all examples of big drivers of renewable energy. Green jobs, a topic that is very much discussed by politicians, is not necessarily a good argument to put forth.We still have time to build a clean and secure energy future, but the window of opportunity is closing fast.

Renewables are the fastest growing component of the energy mix, but renewables account for a small proportion of total energy demand.

Data sourced from REN21

A Big Jump in CO2 Emissions

An interesting post from Clean Break about a big jump in CO2 emissions.

"The bad news: Emissions from the United States, China, India and other developing countries took a giant leap in 2010, bringing total global emissions 6 per cent higher than the previous year, according to the latest data from the U.S. Department of Energy."

A 6% increase in CO2 from one year to the next is a huge increase. Reducing CO2 emissions down to 350 ppm, a level deemed safe, becomes increasingly difficult when emissions are growing so fast.

Melting Arctic Sea Ice

Here is a link to a video from The Economist showing how Arctic sea ice has changed since 1979. The economic implications of this melting sea ice is that it will soon be possible for large cargo ships to cross the Arctic ocean. This should make it easier and cheaper to ship cargo between the Atlantic and Pacific oceans.

The environmental implications are more complicated. Less Arctic sea ice means less sunlight being reflected and more heat being absorbed by the Arctic ocean. This will intensify the warming process. One big concern is what effect this warming will have on the large deposits of methane hydrate that are in the Arctic.

The October 2011 issue of National Geographic has a story titled Hothouse Earth, which describes a time  when

"56 million years ago a mysterious surge of carbon into the atmosphere sent global temperatures soaring."


During the Paleocene-Eocene Thermal Maximum, or PETM, period, the Arctic was a tropical climate and the summer water temperature in the Arctic Ocean was around 74 degrees Fahrenheit.

"The oldest and still the most popular hypothesis is that much of the carbon came from large deposits of methane hydrate, a peculiar, icelike compound that consists of water molecules forming a cage around a single molecule of methane. Hydrates are stable only in a narrow band of cold temperatures and high pressures; large deposits of them are found today under the Arctic tundra and under the seafloor, on the slopes that link the continental shelves to the deep abyssal plains. At the PETM an initial warming from somewhere—perhaps the volcanoes, perhaps slight fluctuations in Earth's orbit that exposed parts of it to more sunlight—might have melted hydrates and allowed methane molecules to slip from their cages and bubble into the atmosphere.

The hypothesis is alarming. Methane in the atmosphere warms the Earth over 20 times more per molecule than carbon dioxide does, then after a decade or two, it oxidizes to CO₂ and keeps on warming for a long time. Many scientists think just that kind of scenario might occur today: The warming caused by the burning of fossil fuels could trigger a runaway release of methane from the deep sea and the frozen north."

Climate Change, Coffee and Canada

For BSUS 6600 students here is an interesting article  from the Toronto Star on the effects of climate change on Canadian business.

"Up to 60 per cent of the world’s coffee-growing regions will no longer be viable by 2050 thanks to climate change, according to a recent estimate from the Global Coffee Quality Research Initiative."

Canada does not grow coffee but the coffee example is relevant to Canadian agriculture. Think of the coffee example as the canary in the coal mine for agriculture. Even the Canadian Securities Administrators thinks there is cause for concern. According to CSA, here are some ways that climate change could affect business.

 • supply and distribution chain interruptions
 • unplanned costs, to address environmental accidents
 • loss of a license to operate
 • affordability and availability of insurance
 • changing consumer preferences

Canadian agriculture and shipping are two industries that could be particularly adversely affected.

Australia's Carbon Tax

Australia is set to tax carbon, or at least the worst polluters. The tax will go into effect on July 1, 2012.

" Australia will force its 500 worst polluters to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit, with the government promising to compensate households hit with higher power bills under a plan to reduce greenhouse gas emissions unveiled Sunday."

"The government hopes businesses affected by the tax will seek out clean energy alternatives to reduce their bills. The affected companies will have to pay AU$23 per metric ton of carbon, with the price rising 2.5 percent a year until 2015, when the plan will move to a market-based emissions trading scheme."

On a per captia basis, Australia is one of the biggest polluters in the world. Critics of carbon taxation
argue that this is just another tax grab by big government while environmental groups question if the tax goes far enough.

Carbon Capture and Storage in Canada and Carbon Trading in Quebec

Here are two interesting stories related to carbon finance. These stories will be particularly interesting to BSUS 6600 students. Environment Canada is in the process of putting together new rules that will affect new coal fired power plants.

"The new rules will prohibit construction of new coal-fired power plants unless they incorporate carbon capture and storage (CCS) technology to remove the greenhouse gases and store them underground."

CCS technology is expensive and not that widely used and this may make it more profitable to keep running the old plants and delay construction of new cleaner plants.Currently, the only CCS plants in operation are in Canada (1), US (2), France (1), Algeria (1) Netherlands (1) and Norway (2) (World Coal Association). Across the world, there are slightly over 30 new CCS plants in the planning stages.

Quebec is taking a more market based approach to carbon dioxide emissions by planning to launch a cap-and-trade system in 2013 (see here).

"The program is designed to reduce Quebec's emissions by 20 per cent of 1990 levels by 2020."

I am interested in learning the details of where and how carbon emissions are going to be traded. This sounds like a regional market for carbon and I wonder if these carbon emissions will be allowed to cross-trade in bigger carbon markets like the EU-ETS.

BC's Carbon Tax Now at 5.56 Cents on Every Litre of Gasoline

As of July 1, BC's carbon tax increase adds another 1.11 cents per litre to gasoline prices and another 1.15 cents per cubic metre on natural gas.The carbon tax now totals 5.56 cents on every litre of gasoline. The carbon tax will rise another 1.11 cents to 6.67 cents per litre on July 1, 2012.

The residents of BC seem to be getting along with the carbon tax, unlike the  HST which is not going down so well.