FinSoul: Can carbon trading be a success?

Dec. 15, 2009 - PRLog -- The often volatile world of carbon trading with its blend of free market principals and government regulation has grabbed international interest as a solution for businesses to help reduce emissions. Unfortunately, up to this point a global market has been unachievable due to a number of problems such as questions over surveillance and offset accounting, FinSoul believes.

There is as yet no global standard for accurate emission accounting with the product being difficult to monitor. "They are a tricky beast -- an environmental commodity is not a natural private good, like a tube of toothpaste or a haircut," FinSoul believes the dean of the Greenhouse Gas Management Institute, was quoted as saying this year."You can just look in the mirror to tell if a haircut is a good product... in carbon trading, it's just a piece of paper, a record in a database and the trust that it really does represent a truthful accounting of emissions," he added.

Carbon trading has a good cop, bad cop approach with the good cop: Industry looking to find ways to reduce emissions and decrease costs and being in a position to sell leftover emissions permits on the open market to the highest bidder, and the bad cop: Government capping total industry emissions forcing businesses to purchase expensive permits to cover excess pollution and imposing hefty fines.

There are currently more than 30 nations globally who have or are planning a carbon trading market, but for carbon trading to work effectively the market needs to be worldwide according to a Barclays Capital analyst, who FinSoul understands went on to say, "The U.S. is close, not close enough, but getting closer to implementing cap and trades. Japan is doing the same thing, South Korea, even, are going to follow what Japan does."


The EU is home to the largest and most successful emission trading scheme, but has suffered initial teething problems too. It however is still expected to be the model for a global market should one emerge from the Copenhagen negotiations.


"Carbon trading on its own can't save the planet," said a spokesperson from the European Climate Exchange. "Carbon trading can help make the process cheaper, but only if the politicians set sufficiently ambitious targets."

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FinSoul structures and guides greenhouse gas emission reduction projects from beginning to end, working with both project developers and buyers of emission reduction credits.