In 1997, the UN Framework Convention on Climate Change (UNFCCC) adopted the Kyoto Protocol — an agreement among states to reduce greenhouse-gas emissions. Next year, however, the Clean Development Mechanism, a system of carbon credits in which each credit represents a country’s right to emit one tonne of carbon dioxide, is set to expire.
While policymakers struggle to extend it, carbon-finance specialists are seeking market-driven alternatives. Progress on the issue has stalled — at the last two UNFCCC conferences in Copenhagen and Cancun, Mexico, members failed to arrive at an agreement on emission cuts.
Reduction, or mitigation, of carbon dioxide emissions is not easy. It is also expensive. The typical measures — carbon capture and sequestration, energy conservation and greater reliance on renewable energy sources, such as solar and wind — are all costly enterprises, often out of reach for poorer countries, where air pollution can be a serious problem.
However, recent climate science may offer hope. Research indicates that black carbon (the soot from inefficient combustion in stoves, fires and engines) belongs to a class of substances that have an extremely high global warming potential. In particular, black carbon absorbs sunlight and radiates heat, thereby melting ice and snow.
Black carbon in the atmosphere also causes respiratory ailments, as Asian cities such as Shanghai, Bangkok and Manila have shown. Fine soot particles can penetrate the upper defenses of the respiratory tract and settle deep in the lungs. Children, the elderly, and people with heart and lung diseases are at highest risk.
These substances exacerbate climate change, but they linger in the air only for short periods and are easy to remove. Black-carbon reduction thus offers developing countries an opportunity to mitigate climate change at a fraction of the cost of full carbon dioxide reduction, while providing cleaner air for their people, simply by avoiding soot formation in engines, stoves and other combustion devices.
Moreover, Voluntary Emission Reduction (VER) credits are a potential new answer to the carbon dioxide problem. VER credits are like carbon credits, but, rather than receiving funding from Kyoto Protocol sources, the private sector provides the financing. Driven by corporations and individuals tired of UN gridlock, VER credits offer an alternative way to pay for emission-reduction projects.
Consider, for example, a Thai auto rickshaw or a Philippine jeepney, forms of public transportation used widely in those countries. Typically, these vehicles’ owners simply do not have the money to fix them, but with VER credits it is possible to fund the repair or replacement of defective engines as long as the emission reductions can be measured accurately.
Several issues must be resolved to ensure the success of VER credits and the emission-reduction projects that they fund.
First, procedures must be established that make these financial instruments acceptable in all countries. Second, there must be internationally verifiable measurement systems in each country that hosts a VER project. Finally, a technical standard on black carbon’s global-warming potential is essential.
Without internationally verifiable accurate measurements, the credits will be worthless.
Everyone wants cleaner air, but the costs of reducing air pollution are prohibitive in many parts of the world. By providing a financial, as well as an environmental incentive, VER projects make carbon dioxide reduction more accessible to the world’s poorer citizens.