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How carbon credits could drive the emergence of renewable energies

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  • Mathews, John A.

Abstract

The shift to renewable energy options and low-carbon technologies, in response to the concerns over energy security and climate change, is proceeding more slowly than many would like. The usual argument against rapid deployment of new technologies is the costs imposed on the economy, commonly interpreted in terms of upfront costs to be borne or involving large cash transfers to fund, for example, efforts to preserve rainforests. In this contribution I argue that such a perspective provides a continuing barrier to taking effective action, whereas a perspective based on creation and use of carbon credits provides a means of avoiding the shock of abrupt industrial change. Carbon credits granted for bona fide carbon load reductions could be created through private initiative, for example by merchant banks, to constitute a market that will complement regulatory-based initiatives such as national emissions trading systems. This is not a novel idea; indeed it is the way that capitalism has funded every major change, including the Industrial Revolution, through the creation of credit. The emergence of a global carbon credit economy is likely to precede a global regulatory system governing climate change and will doubtless help to stimulate the emergence of such a global system.

Suggested Citation

  • Mathews, John A., 2008. "How carbon credits could drive the emergence of renewable energies," Energy Policy, Elsevier, vol. 36(10), pages 3633-3639, October.
  • Handle: RePEc:eee:enepol:v:36:y:2008:i:10:p:3633-3639
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    References listed on IDEAS

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    1. Mathews, John, 2007. "Seven steps to curb global warming," Energy Policy, Elsevier, vol. 35(8), pages 4247-4259, August.
    2. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2008," World Bank Other Operational Studies 13405, The World Bank.
    3. Mathews, John A., 2008. "Towards a sustainably certifiable futures contract for biofuels," Energy Policy, Elsevier, vol. 36(5), pages 1577-1583, May.
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    Cited by:

    1. Andersen, Poul H. & Mathews, John A. & Rask, Morten, 2009. "Integrating private transport into renewable energy policy: The strategy of creating intelligent recharging grids for electric vehicles," Energy Policy, Elsevier, vol. 37(7), pages 2481-2486, July.
    2. Gallo, Michela & Del Borghi, Adriana & Strazza, Carlo & Parodi, Lara & Arcioni, Livia & Proietti, Stefania, 2016. "Opportunities and criticisms of voluntary emission reduction projects developed by Public Administrations: Analysis of 143 case studies implemented in Italy," Applied Energy, Elsevier, vol. 179(C), pages 1269-1282.
    3. Valentine, Scott Victor, 2010. "Canada's constitutional separation of (wind) power," Energy Policy, Elsevier, vol. 38(4), pages 1918-1930, April.
    4. repec:eco:journ2:2017-02-23 is not listed on IDEAS
    5. Ari, ─░zzet, 2013. "Voluntary emission trading potential of Turkey," Energy Policy, Elsevier, vol. 62(C), pages 910-919.

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