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Marketable Pollution Permits


A case study

Greenhouse gasses can now be traded online by governments and companies who want to buy their way out of trouble without cleaning up their act.  Many environmentalists are deeply unhappy about the situation.  The launch of CO2e.com on the 27th November 2000, is described as the world's largest market place for tradable permits in greenhouse gas emissions.  There is much resistance against plans to allow countries that cannot, or refuse to, meet their internationally agreed emission targets to buy emission credits from countries that can.


One point of contention is the way CO2e.com is expected to facilitate companies who want to bank reductions in emissions now, to set against future legal obligations on gases.  Under the 1997 Kyoto Protocol, a treaty that sets down principles and targets for trimming carbon-gas pollution, there is a provision that allows for the possibility that companies will be able to do this.


Environmentalists deplore the inclusion of loopholes for rich nations and companies, and insist that the goal of the talks in The Hague should be to force polluters to make the vast majority of greenhouse gas cuts at home.


Industrial countries are clashing on the issue, with many - notably several European countries - agreeing with the environmentalists.  However, the US and other countries - most notably Japan, Australia and Canada - are trying to water down the Kyoto agreement, so avoiding the need to make domestic sacrifices and cut emissions from fossil fuel.


But regardless of whether or not emissions trading is capped, the coming of CO2e.com means the trade in greenhouse gas emissions, such as carbon dioxide (CO2) can no longer be avoided.  The site, which describes itself as a "global hub for carbon commerce", is about to turn the trade in greenhouse gases into one of the fastest growing commodity markets in the world, CO2e.com's backers said.


Steve Drummond, global leader of climate change financial advisory services for Pricewaterhouse Coopers, which has taken part in the development of CO2e.com, insisted that CO2e.com will not just be an online marketplace, but also an information resource educating companies about their environmental responsibilities.


Adapted from http://news.bbc.co.uk/hi/english/business/newsid_1032000/1032724.stm



Explain what is meant by tradable permits.


How can this system of tradable permits reduce world pollution levels?


Why do environmentalists oppose the system of tradable permits?




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