Thursday, April 26, 2007

Green Capitalism > Carbon offsets.

The best environmentalism is the type that earns you money.
Al Gore and a lot of well-meaning individuals encourage the use of carbon offsets.
However, carbon offsets are ineffective because 1) they have no oversight 2) they do not reduce emissions and 3) they fail to leverage the power of capital.

A great example of green capitalism is the Danish Island of Samso.
The island is carbon negative and they make money doing it.
They used private investments with government subsidies to build off-short and land windmilll farms. They export 75% of their electricity.

Where does Samso go right where offsets and the U.S. go wrong?
1) When you spend an offset, the money is gone. You get continuous returns on an environmental investment which you can spend for more investments
2) Government subsidies are targeted toward effective environmental technologies. For example, corn based ethanol takes so much energy to produce, you only net 25% energy for each crop. Once a windmill turbine is built, it requires no energy to operate, so everything it produces is all net energy.
3) They turned environmentalism into a competition. People love to win, and once you've got momentum, new ideas are continually flowing.
4) They pooled public resources to make expensive technologies affordable to common people. For example, solar panels are too expensive for a lot of people to have for their home, so they use them for their district heating plants.

What should the U.S. do differently?
1) Immediately end all subsidies for corn-based ethanol. It is a waste of capital, will never be efficient and is a red herring.
2) Target subisidies/loans for building green power infrastructure which is 100% renewable (solar, wind, tidal).
3) Take all the money being used for carbon offset and invest it. Don't just use green power, own it.

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