Climate Change Capital and Pollution Reduction
|November 1st, 2007||
|James Cameron is a London-based financier whose company, Climate Change Capital, is involved in a relatively new business created by the Kyoto Protocol that involves curbing C02 emissions in one country, such as China, in order to sell them elsewhere, such as Europe. Dubbed climate change capitalists, they are interested in reducing emissions while generating profits, something that is making pollution reduction increasingly attractive. The cap-and-trade system, like the one the European Union instituted in 2005, forces polluters to purchase credits to offset emissions beyond regulation limits.|
Critics argue that because it is cheaper to reduce emissions in China than Europe, the system does little to discourage European companies from emitting less, on the observation that it is simply cheaper for them to purchase developing countries' credits rather than invest in less high-carbon infrastructure. Another controversy of the system is that pollution producers in some cases stand to make more money selling their pollution credits than the products that are the source of these pollutants, leading critics to contend that the cap-and-trade system is little more than a subsidy.
There are serious questions about whether the system reduces pollution or simply reallocates it. Supporters argue that regardless of where it occurs, pollution reduction is beneficial. Because of its potential growth and profitability, American banks and other institutions are pushing for a United States market that could overtake London as the premier global carbon finance market.