Carbon Prices, Carbon Offsetting and Green Wash – John Redwood’s Diary


As we approach the final text of COP 26, it appears that the major CO2 producers in the world are tied to their fossil fuel economies and most plan to produce more CO2 in the coming years. China is planning more coal-fired power plants, Germany is eager to keep its at least for this decade, India thinks it needs to burn more fossil fuels to grow to better prosperity. There will be no new treaty outside of Glasgow. The idea was to enrich the Paris Agreement with detailed national plans and objectives and to move towards a more comprehensive implementation of the action by sharing information and applying moral pressures to failing countries. There has never been any plan to have an EU-like structure with execution in court and sanctions against non-compliance.

Meanwhile the rich and powerful of the world are turning to carbon offsets to afford to enjoy private jets, air-conditioned hotels, large meat meals and the rest. Faced with the accusation of self-righteousness when they teach us about stopping travel by passenger plane or diesel car, and criticizing our addiction to gas boilers and supermarket meat, they tell us that they have made up for their more extravagant lives. based on carbon buying forgive. They identify an investment in trees or wind farms or solar panels somewhere and claim that part of the investment as compensation for their carbon generation. The offset market can grow massively, as there is an abundant supply of potential projects that some agencies will rate as adequate as an offset.

The EU has also set up a carbon permit system. If a company wants to burn fossil fuels to make steel or concrete, it must purchase or obtain carbon permits to allow it to burn the fossil fuels needed in the process. There is much debate about what the price of carbon permits should be. The market in them has recently brought the price up to 60 euros per tonne of carbon. This is now a significant additional cost for industrial activities that require a significant input of fossil fuels.

I would be interested in your reactions to this activity. It is necessary to avoid scams and greenwashing. It is necessary to understand that this will make things more expensive as the cost of carbon taxation goes into the industrial calculations.

Yesterday I was talking to a London taxi driver about the new electric taxis. He pointed out that they also contain a 1.5L petrol engine that can be started to keep the battery charged. Apparently, to have the autonomy for a day’s work, gasoline engines are widely used. These developments need to be fully taken into account when trying to understand how to decarbonise transport.


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