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The Carbon Credit

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What is a Carbon Credit? Its true definition is the ESO or Exchange Soil Offset or, more popularly the CO2e or Carbon Dioxide equivalent but what is it equivalent to? How many Euros are there for each Credit?

Coincidentally, today is also the first day of a new currency that is very much like the real Carbon Credit. The Savetheplanet Carbon Credit is officially launched this day 1st September 2005 to a less than rapturous welcome from all who use her. Lets call them Credits because in Science Fiction films Credits are the currency of the future anyway. So far, I have printed off the first batch of notes you can see below, I guessed that the 20 Credit note would entitle the holder to drive for 20 weeks at current technology levels. Owners of hybrids might be entitled to drive for more weeks but until I can work out the true value of a Credit, its difficult to know how it compares to a loaf of bread, a litre of petrol or a pair of Levi jeans. Or a tree.

But what is currency. The Euro was launched not long ago and its value floated around on money markets until the state of Europes 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 kerfufflings of any other currency and is never affected by the weather (which is about to change most economies). Its 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 doesnt 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 hurricanes like the one we had yesterday in the southern US. 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 weathers destruction, we wont pay out. Insurers will find any reason not to 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 where ever you are because CO2 has a global impact.

At the moment, the Carbon market is quoting one Credit as being worth US$10

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