Neil Eckert, chairman of the European Climate Exchange, has defended carbon offsetting projects against critics who say they are simply a way for those in developed countries to shirk their environmental responsibility.
Speaking at the International Financial Services London forum at London’s Mansion House, Eckert said carbon dioxide emissions are a global problem and the whole point of carbon offsetting projects is to engage developing countries.
He said: ‘In a lot of developing nations you’ve got immense amounts of land and great natural resources, and in a lot of these nations you can build cheap alternative energy. It doesn’t matter where you cut carbon, just cut carbon.’
Market-based strategies for trading CO2 emissions like the European Climate Exchange (ECX), which is a marketplace in which buyers purchase emission allowances under cap-and-trade regimes are vital for mitigating global warming, said Eckert.
Cap-and-trade refers to when a cap, or limit, is set on the amount of carbon that companies can emit. Companies are given allowances or credits to emit a certain amount of carbon and if their credits exceed the cap, they must buy credits from those who pollute less.
The ECX plans to add other greenhouse gas credits to its range of exchange-traded commodities in September. The commodities will be futures and options contracts based on Certified Emission Reduction units, which are tradable units of greenhouse gas emissions from clean energy projects in developing countries.
Eckert believes emissions trading is superior to environmental taxes because the government will not necessarily put tax revenue toward emission reduction projects.
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