“Dear friend, you are faithful in what you are doing for the brothers, even though they are strangers to you…We ought therefore to show hospitality to such men so that we may work together for the truth” – 3 John 1: 5, 8.

In my last column on Planning and Performance, I extolled the virtues of renewable energy and postulated that the solar electricity option is not only economically viable, when we consider energy and environmental security, but also, as the price of oil rises and with technological advancements, it is now becoming financially viable. As my column traversed the information superhighway last week, I received an immediate response from Mr. Lelei LeLaulu, President of Counterpart International. He counselled “and don’t forget alternative energy use is an important and lucrative element in the carbon trading economy”. This piqued my interest as I had not looked at renewable energy in the context of Carbon Credits since the advent of the Kyoto protocol in 1997.

In the mid-1980s, a growing body of scientific evidence linked man-made greenhouse gas emissions to global warming. In 1990, the United Nations General Assembly issued a report that confirmed this link. Formally called the United Nations Framework Convention on Climate Change (UNFCC), the Rio Accord of 1992 was signed by various nations in Rio de Janeiro, Brazil. Then there was the Barbados Programme of Action arising out of the UN conference on Sustainable Development in Small Island Developing States in 1994.

The Kyoto protocol is an international agreement, which builds on the UNFCC and sets legally binding targets and timetables for cutting the greenhouse-gas emissions of industrialized countries. In December 1997, representatives of 160 nations met in Kyoto, Japan, in an attempt to produce a new and improved treaty on climate change. Major differences occurred between industrialized and developing countries with the United States perceived as not doing its share to reduce emissions. The Kyoto Protocol entered into force on 16 February 2005.

Pardon me this interlude to congratulate Barbadian University Lecturer Dr. Leonard Nurse who has been named as one of the Nobel Laureates for 2007. He was part of the United Nations Inter-governmental Panel on Climate Change which was awarded the Nobel Peace Prize jointly with Mr. Al Gore.

A useful website which explains how we can save the planet through carbon trading is http://savetheplanet.co.nz/carbon-wave-power-whatis.html. We need to build the carbon credit economy.

What is a Carbon Credit? It is a new currency, the Carbon Dioxide equivalent, but what is it equivalent to? How many Euros are there for each Credit?

But what is currency? The Euro was launched not long ago and its value floated around on money markets until the state of Europe’s economy, stability, legal framework, ethics and industry were used to give the Euro a value relative to other currencies. The Euro remains as flexible as other currencies since the price stabilized and its value now fluctuates according to political and economic factors. Currency is the way we value things against each other.

The best currency is gold. It is subject to none of the political turbulence of any other currency and is never affected by the weather (which is about to change most economies). It’s lowish when things are good and highish when things are bad. Everybody wants it because it looks nice and if the king of somewhere dies, the price of gold doesn’t change.

Carbon Credits have the potential to be the next great currency. Despite us not really wanting them at all, we will have to do something that stops us having more devastating hurricanes like the ones experienced in the US and the Caribbean in recent years. Hurricanes cost a lot of money and insurance companies are going to say that unless parties are seen to be taking all possible action to minimize the weather’s destruction, we won’t pay out. It might be almost mandatory to have Carbon Credits one day and there seems to be no alternative world currency that escapes local political intervention that we can all trust. Carbon Credits are going to hold the same value wherever you are because CO2 has a global impact.

Carbon trading, or more generically emissions trading, is the term applied to the trading of certificates representing various ways in which carbon-related emissions reduction targets might be met. Participants in carbon trading buy and sell contractual commitments or certificates that represent specified amounts of carbon-related emissions that either: are allowed to be emitted; comprise reductions in emissions (new technology, energy efficiency, renewable energy); or comprise offsets against emissions, such as carbon sequestration (capture of carbon in biomass).

People buy and sell such products because it is the most cost-effective way to achieve an overall reduction in the level of emissions, assuming that transaction costs involved in market participation are kept at reasonable levels. More anon about how carbon trading is done and how developing countries may benefit.

Friends, the carbon credit economy is a major opportunity which allows new friendships to be created as we work together to preserve life on earth for posterity. It is not to be despised by the rich but should be seen as a bond which seals our common fate.