Carbon trading self-indulgent?

Carbon trading has become the trendy way for people to deal with climate change on a personal level - although it's questionable whether leaping on the carbon-control bandwagon really has an impact.

Carbon dioxide, you see, is considered the primary greenhouse gas responsible for global warming, and most human activity, starting with breathing, creates carbon dioxide.

This has led to a nifty business opportunity for so-called carbon traders, who promise to assuage the guilt of carbon producers in one place by capturing carbon somewhere else.

It works like this: if your personal or corporate carbon emissions are excessive, don't worry, you can purchase carbon credits from companies that then invest in carbon reduction projects, such as planting trees that absorb carbon and produce oxygen.

Sounds good, but it's just not that simple. Carbon credit trading is a system loaded with hidden costs and problems.

Critics compare carbon credits with the medieval practice of purchasing "indulgences" from the church in exchange for the forgiveness of sins. Carbon credit buyers can spew carbon with a clear conscience because they paid someone else to be responsible.

In addition, the carbon-credit scheme removes incentives to pursue voluntary energy conservation, which would have the beneficial side effect of reducing the country's dependence on foreign energy sources.

Mandatory carbon emission caps like those that were adopted by the European Union have been a disaster. What emerged was a boom in businesses offering their services in selling carbon credits, followed by an excess supply of credits, which caused a collapse in the price of credits to a point where they have become practically worthless.

The upshot: Incentives for companies to cut their carbon emissions vanish, because it is more affordable to buy cheap credits.

A leading Dutch economist, Catrinus Jepma, has further warned that the end result of such trading schemes is that companies will have eroded incentives for investing in clean technologies that actually reduce carbon emissions.

Let's not be fooled by fast talkers and flim-flammery. If you want to change your lifestyle to make a better world, then by all means do so, but don't look for a quick fix to either global sinning or global warming.