Two studies were published this week that concluded that provability is the ultimate key to the success or failure of a carbon trading system. In a Government Accountability Office review of Europe's cap-and-trade system, the GAO found that many traded credits were suspect; thus the overall emissions reduced were far under the program's stated goal.

The report stated the key considerations in developing reliable data on greenhouse gas emissions, centering on the purpose and intended use of the data. The GAO listed two specific considerations:

1. The scope of the program across emissions sources, such as whether it affects all emission-producing activities or a specified subgroup, and
2. The program’s coverage across the six primary greenhouse gases.

These considerations depend on the point of regulation – namely, whether the program affects a small number of so-called “upstream” emitters, such as fossil fuel producers and importers, or instead affects smaller “downstream” emitters such as individual industrial facilities. "Overall, the challenges in establishing baseline emissions data, as well as in monitoring, reporting, and verifying ongoing emissions will increase as the number of regulated entities, activities, and greenhouse gases increase," the GAO noted.

The right-wing National Center for Policy Analysis conducted a similar report on Kyoto, noting similar widespread failings by regulators to ensure traded credits coincide with actual emission reductions

Links

• Read the GAO report
• Read the NCPA report