THE ROCK BAND CAPITALIST TOOLS FOR CUTTING CO2
When Coldplay cut A Rush of Blood to the Head, the rock band didn't want the album's production and distribution to add to the greenhouse gases flowing into the atmosphere. So, working with a small British firm, the CarbonNeutral Co., the group bought 10,000 mango trees for villagers in Karnataka, India. Since plants breathe in carbon dioxide as they grow, Coldplay figures the mango trees will eventually neutralize all the CO2 released in the making and selling of its CDs.
It's a sweet deal all around. Coldplay gets to do right by the environment; the impoverished Indian villagers not only get the mangoes but will also earn money from the CO2 locked in the trees when the gas is sold on a surging new market--one that trades carbon saved for carbon burned.
Capitalism is nothing if not adaptive, and its champions have responded to global warming with a market-based solution that provides polluters with a profit incentive to mend their ways. It's called cap and trade, and it is the mechanism behind the so-called carbon markets spawned by the Kyoto Protocol. Firms in developed countries that pump out more CO2 than they are allowed under limits imposed by Kyoto are required by the protocol to offset that pollution by buying credits on the carbon market. Those that cut CO2 emissions below their allowance or help polluters in developing nations clean up their act get to sell the credits--as do groups that cut greenhouse gases by, among other things, planting trees.
Since January 2005, carbon markets in the European Union have traded at least 500 million tons of CO2. Because the Bush Administration dropped out of Kyoto, the U.S. doesn't participate in this booming global trade. But state governments are starting to set up regional carbon markets based on caps they establish under their own authority. In December, seven Northeastern states led by New York agreed to cut power-plant emissions via cap and trade, beginning in 2009.
For now, U.S. firms that want to trade emissions must join the Chicago Climate Exchange, a voluntary but legally binding bourse whose members, according to founder Richard Sandor, account for 8% of the greenhouse emissions from stationary sources in the U.S. "If we were a country," he says, "we'd be roughly the size of Britain." Members of the Chicago exchange, including Ford Motor Co. and DuPont, have pledged to cut their emissions 4% by the end of this year from the levels they averaged from 1998 to 2000. They have already taken tens of millions of tons of greenhouse gases out of play, which sounds impressive until it's compared with the 6 billion--ton plume of CO2 spewed into the atmosphere by the U.S. each year.
Meanwhile, the opportunities to offset emissions are growing. Conservation International, for instance, helped Mitsubishi and Pearl Jam funnel their offsetting funds into rain-forest protection in Madagascar. And Coldplay did more than enough to offset its last album, X&Y, by protecting forests in Mexico and Ecuador. Internet ventures with names like TerraPass, myclimate and Drive Neutral enable commuters and air travelers to calculate their emissions and neutralize the damage. Some even aim to turn a profit.