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Can we measure CO2 adequately
23 April 2012

Talk of carbon tax and carbon pricing is - in the general sense - to be welcomed. We need to price in the impact of CO2 emissions to correct market failure caused by negative externalities. But PACE and Credible Carbon realised some time ago that seeking exact measures of CO2 is at best very expensive, and more often simply impossible. This is a colourless, odourless gas and our claim is that we have not emitted it due to something we have done. It should be no surprise then that accounting for that is tricky. Of course carbon auditors have an interest in embracing this complexity; there are many hours of work involved in calculating supposedly precise amounts of CO2 saved. The truth, however, is that calculations of carbon savings are assumption based and always a little subjective.

Assumptions should be reasonable and 'unbiased' (towards buyers or seller) but we probably need to either accept a consumption (fuel and electricity) based proxy or accept a degree of flux around estimates ....and make sure that this flux is itself unbiased.

At Credible Carbon we are forced to adopt the latte of these two options in order to keep transaction costs reasonable. It seems now that Australia are confronting some of the same issues as they seek to 'prosecute a carbon tax' in their own words. See here. As South Africa looks to implement a carbon tax it is worth asking: do have the types of measures that would allow us to levy this tax fairly and consistently? Or are we disingenuously creating an industry for carbon experts and malfeasance. Or might we be better off taxing electricity and petrol consumption instead. I don’t see much political room for these taxes at the moment, but at least we would have a chance of measuring the thing we are trying to tax.  

 


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