Carbon Trading

Talk about carbon trading and carbon emissions in Sri Lanka and the business savvy mind will immediately think of a company like MAS which became part of the world’s first  “green” supply chain together with Marks and Spencer. It may also think about various reforestation and sustainable energy projects that are implemented as carbon credit sources for trade with companies in developing countries.
The “green” craze has taken over the world, if not politically, at least in the marketing sphere. Increasingly firms are looking to go  “green” to attract eco-conscious customers. How can this influence policy? One might ask. They are only buying goods from firms, not from politicians they might say. But the truth is that political systems are inherently tied to where the money is. Democracy is mainly conformed to the capitalists’ needs. Power needs money and who has money? Businessmen.  People influence businesses, businesses influence governments, and governments make policy changes.
People want green goods because people feel guilty about the environment. This is mostly true of the Western consumer, only this efficacious creature has the time, money or the inclination to worry about the environment and incorporate room for it in his or her wallet. Green brands are popping up all over the place, all of them struggling to stamp out their “carbon footprint.”
On the contrary most Sri Lankan consumers, when caring about the environment, will resort to refusing fresh plastic bags with their groceries. The typical Sri Lankan is worried about pollution, not global warming. The Kyoto protocol is something the average Sri Lankan is only dimly aware.
Non Comprende-subhead
The Kyoto protocol tried to bring in emission regulations for the countries of the world to follow. Attempts to apply uniform emission targets failed miserably. China, one of Carbon dioxide’s biggest emitters refused to reduce emission rates at the same level as developed countries claiming that all the “development” enjoyed by those countries came out of large scale industrialization that didn’t give two hoots about global warming.  USA has also notoriously been unwilling to conform. Barrack Obama’s lacklustre performance at Copenhagen 2010 that nailed the lid on the coffin of the much hyped sequel to Kyoto.
But that is not to say a large number of countries did not ratify it. And from the Kyoto protocol was born the carbon emission trading market. Companies were given emission targets as part of a “triple bottom line” financial model that was to take in the cost incurred to the environment by their operations. If they could not cut down their emission levels to what was required by the target, they were allowed to buy extra emission credits from firms and entities that were well below their own targets. A lot of these provides for emission credits are green projects in the developing world. Sri Lanka itself has a number of waterfalls centred sustainable energy projects that make a lot of money for their owners.
A system like this may have failed because companies adopting regulations would have been at a serious disadvantage in comparison to those that did not. And in fact, many of them did and still do depend on government subsidies.
The system would have collapsed were it not so appealing to the hippie inside every consumer. Large scale demand for products that had no “carbon footprint” started to impact industries as diverse as supermarkets, financial and internet services, couriering, transport and tourism. Wherever there was an environmentally savvy consumer, brands could differentiate to appeal more to him or her.
Happily for the hippie in me, the phenomenon has also seeped into the unregulated sector. Companies that are not legally bound to follow the protocol are adapting its requirements to appeal more to customers. A whole new industry has emerged that services the needs of these companies. There are firms that will measure, set targets for and monitor your company’s carbon emissions and provide you with a globally recognized certificate for it. They will also help you market it to your customers. As more consumers demand green products, companies will start to provide them more and more. This is how a democracy works; Money makes it move faster.
Sri Lankan firms should start looking for opportunities to go green as well. A new certification firm is in town and if the demand doesn’t exist, it wouldn’t be too hard to create it. Most industries that target Western markets will be inclined to tag along with the wave, tea, coconut, garments and IT services being a few. As for the domestic market, it will still be a while until Mrs. Perera inquires as to what exactly the carbon footprint of a kilo of that samba rice is at the supermarket.