Tuesday, 9 February 2010

US couple take lead on carbon trade by selling their first credit

By Sheila McNulty in Houston
Published: February 9 2010 02:00

While a bill to establish a cap-and-trade system has stalled in the US Senate, individuals keen to tackle carbon emissions should consider the example of Tami and Randy Wilson.
The Pennsylvania couple have sold the world's first carbon credit awarded for a reduction in personal carbon emissions. About 1,800 others have signed up to follow suit - underlining the US public's readiness to press ahead on the issue.
The Wilsons began by getting rid of their son's heated water bed, turning off power to computers and televisions when not in use, changing to energy-efficient light bulbs, hang-drying their laundry and, finally, investing $58,000 (€42,000 £37,000) in a solar panel system - until they reduced their electricity bill to zero.
Then they signed up on the MyEmissionsExchange. com site to have their energy savings calculated. They found that they had already saved one tonne of carbon, which earned them a carbon credit. The exchange sold the credit for $21.50 to Molten Metal Equipment Innovations of Ohio, taking a 20 per cent commission.
"Everybody wants to be environmentally friendly," said Ms Wilson, 49, a water treatment plant operator. "It takes a trigger point to get people involved. For us it was the announcement of a 30 per cent increase in our electricity bill."
MyEmissionsExchange. com, owned by the energy broker Oceans Connect, is hoping that other individuals will not only want to be paid for their energy savings but that companies will be keen to buy credits easily verified by comparing a family's improving power bills.
While purchasing a single credit is insignificant, the MyEmissionsExchange site is hoping that expectations for carbon legislation and public interest in limiting climate change will enable it to build scale.
"If we think big, we don't have to rule out ExxonMobil buying credits," said Paul Herrgesell, project manager at the website.
MyEmissionsExchange began trying to help individuals to enter the carbon market in October, and executed the Wilsons' sale last month. The site, which verifies and sells personal carbon credits, is open to any individual household or business that wants to earn a personal carbon credit by demonstrating it has reduced its electric, natural gas, propane or fuel oil bill compared with the same month a year earlier.
The problem with such schemes, say many market experts, is that it is so hard to verify whether genuine carbon reductions have taken place, and to quantify them.
"This is good to raise awareness and to mobilise people to personally act against climate change,'' said Davide Vassallo, director at Arthur D. Little, the consultancy. "But I don't believe we will have a market here.''
The US authorities have yet to require a reduction in carbon emissions. He pointed out that the largest carbon credits markets were based mainly on the cap-and-trade system, where regulation created the demand to procure credits.
Paul Cooper, president of Molten Metal Equipment Innovations, which makes pumping equipment for the recycling industry, said the company would buy more credits if they became available, given its support of energy conservation.
"Without corporations involved, it won't take off," he added.
Copyright The Financial Times Limited 2010.