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GLOBE-Net Special Feature

A Primer on Climate Change and Carbon Trading

Conclusion

Scientific evidence of human-induced climate change has mounted in recent years. While there is considerable uncertainty as to the level of contribution to climate change of human-caused greenhouse gas emissions, peer-reviewed research by the broad scientific community has generally concluded that human activity is contributing this phenomenon. As the IPCC noted in its last report, "There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities." This assertion is likely to be strengthened in the next assessment in 2007, as interim research has improved understanding in many areas.

The full, long termimpacts of climate change can be hypothesized, but are generally uncertain. Potentially, they are massive and will have a drastic effect on the future of humanity. Minimally, they will be disruptive of socio-economic activities in many areas of the world and will force some adaptive measures.

Many governments, businesses, and individuals are now concerned about the future impacts of climate change, and are ready to take action. Actions of international organizations such as the United Nations are vital, and the Kyoto Protocol represents an important commitment by nearly 160 nations to reduce greenhouse gas emissions. It is however, a flawed agreement in many respects, and consequently has not been ratified by some of its original signatories, while many others are in non-compliance. Therefore, many parallel efforts should also be considered - any initiative that reduces greenhouse gas emissions in a relatively efficient manner will produce benefits.

The use of market-based mechanisms such as carbon trading is crucial to engaging the private sector to provide climate change solutions. By providing businesses with a financial incentive to reduce greenhouse gas emissions, such systems harness innovation and create a market for alternative energy and energy efficiency technologies. Companies that are early entrants into carbon trading markets can gain valuable experience which can provided them with a competitive advantage for the future.

What has been demonstrated over the last several years is that climate change is unequivocally real, that human society will have to deal with its possible impacts, and that we must do what we can to mitigate greenhouse gas emissions. With the introduction of international governmental efforts and private sector initiatives, the world is now engaging in action to deal with climate change. These efforts must continue and must be reinforced in a way that produces the environmental and economic conditions our society requires to thrive.

Clearly, climate change is an unfolding story. This Primer touches on the basics and hopefully provides a foundation upon which readers can form their opinions on the many issues involved. More importantly, the Primer may help decision makers in companies large and small to begin to make the changes that are necessary to deal with the inevitable impacts of climate change and to reduce their own greenhouse gas emissions.

GLOBE-Net will continue to update this Primer as required, and readers are urged to stay in touch with GLOBE-Net as your most authoritative source of information on the business of the environment. Your comments on this Primer are most welcome.

FOR FURTHER INFORMATION:

The following websites provide background information which can help to form a more complete picture of climate change and related issues:

SCIENCE REGULATION CARBON TRADING