I recently changed a light bulb for a friend, replacing an incandescent globe with a low-emission compact fluoro globe. Was this one small step towards reducing Australia’s greenhouse emissions and saving the world from disastrous climate change? Or just a superficial exercise in carbon-shifting and guilt abatement?

This kind of query should be posed more rigorously as our response to climate change is being focused through the political prism onto the issue of emissions trading. How big is your target, Kevin? How soft is your target, John? What will you charge for a tonne of carbon, Malcolm? How soon will your scheme come in, Peter?

Our political theatre will be dominated by such comparisons over the next few years as the major parties vie to offer emissions trading policies that achieve a compromise between two competing demands. The first is to have credibility as a means to suppress our CO2 emissions, the second is to not frighten voters by the cost in terms of money and changes to the way they are used to working, living and playing.

These policies should also be shaped to be compatible with an emerging global emissions trading system, but this will be a lower priority in the election period because our national debate has become predicated on the spurious premise that Australia can avert climate change by its own actions. That will become a more important issue in the next decade.

Right now, the politicians know that voters are willing to accept emissions trading. Companies like Easy Being Green, the first accredited mediator for the Government’s low-emissions light bulb giveaway, are making that clear. In June it released a survey which found that 50 per cent of Australians are willing to pay to offset the carbon emissions their household produces.

“Less than 20 per cent of the people surveyed rejected the idea of paying for carbon offset outright, and a quarter of respondents stated that they would be prepared to pay over $100 for the peace of mind,” the company said.

Lovely state that, “peace of mind”. Cheap at $100. Pay the fee and feel good because you are doing your bit, paying your penance for the CO2 emissions that your life relies upon.   
Like my friend with her light bulb.

When I offered to change her laundry light she pulled out a pack of CFL bulbs she had received at a hardware store. In return for this gift she had signed a paper ceding to the donor the credits for the carbon abatement the lights would deliver. That abatement is calculated as the difference in energy use between an inefficient bulb and the replacement CFL, and is converted into the equivalent tonnes of CO2.

I didn’t replace any other bulbs, that will happen as the old ones blow. But the voluntary emissions trading scheme administered by the Australian Greenhouse Office accounts for that kind of behaviour, requiring a survey of recipients to check the actual installation rate. The abatement is then discounted to account for the rate of installations and is set at the lower end of the error range. The wattage of old and new bulbs is also accounted for, as is the carbon emitted by the process of manufacturing and distributing the CFL bulbs.

After trading truckloads of CFL bulbs for the carbon credits from thousands of households, Easy Being Green and other accredited providers then look for customers willing to buy those credits.

One example is a major paint company which is marketing some of its products as carbon neutral. Assume that it has calculated that manufacturing and distributing its “green paint” creates 1000 tonnes of CO2 emissions each year. It pays the accredited mediator a fee for 1000 tonnes of CO2 credits and is then able to promote it as a carbon neutral product.

Everybody wins. People like my friend have free, low emission light bulbs and peace of mind. The mediating company makes a profit and its employees probably feel good about being part of such a cool enterprise. The paint company gets to produce a new line of paint and sell it in a way which differentiates it in a novel way. And the people who buy the paint gain peace of mind as they stroke it onto their walls and architraves.

How does the atmosphere feel? It cops the same amount of CO2 emissions from Australia as it would have if no light bulbs were replaced and no new paint products were brought to market. So this little emissions trading exercise has not caused an actual reduction in our CO2 emissions, just balanced growing emissions from the paint industry with a reduction in the household sector.

The only way to actually reduce emissions – given existing technologies for lighting and making paint - would be too have fewer lights or manufacture less paint. But neither is likely as long as our population and our economy keep growing.

Emissions trading will also keep growing because it is a market where entrepreneurs see potential to generate revenue by claiming a piece of the action. In July a company called Australian Climate Exchange announced that “greed started turning green” when the first trades were completed on a carbon trading exchange it has established in Melbourne.

The commodity traded on this exchange is carbon abatement accredited by the Australian Greenhouse Office’s Greenhouse Friendly program. The company’s Managing Director, Tim Hanlin, said the exchange offered a transparent mechanism for the transfer of emission reductions.

“Companies need to use a system that will stand up to the rigor of external audits, protect against claims of ‘greenwashing’ and unlock potential value for their shareholder,” he said.

“This is just the end of the beginning of a ‘cap and trade’ emissions trading scheme that the Prime Minister hopes to have in place before 2012.”

His company is staking a claim for a space in the emissions market similar to that pioneered by companies such as EasyBeingGreen, albeit with a less tangible product.

It does not generate revenue by implementing an exchange of light bulbs and pocketing the difference, but by charging a commission on trades. If it is successful in providing dealmakers with the confidence that their deals are registered by a reputable exchange, it will be on a nice little earner in a market with great growth potential.

This kind of development is inevitable as carbon trading is embraced by all-comers – from the earnest and well-meaning to the dodgy and opportunistic – vying for a piece of the action. As this market grows it will become more sophisticated, many new layers of activity will be created as entrepreneurial creativity is applied, but it is unlikely to deliver actual reductions in emissions.

Emissions trading may deliver peace of mind to most participants and profits to some, but it does not reduce the quantum of greenhouse emissions. At best it can promise to stabilise emission levels, but its overall effect will be to merely slow the rate at which emissions increase.

Achieving real reductions in emissions will require much more drastic action. Peace of mind will cost a lot more than $100 when the time comes to face that challenge.

Simon Grose is the Science and Technology editor of the Canberra Times.