The Kyoto Convention allows air pollution to be traded. Pig farmers in Chile sell electricity companies "credits" they have earned for capturing the methane emitted by the animals
Haaretz, News and Walla
The Kyoto Convention allows air pollution to be traded. Pig farmers in Chile sell electricity companies "credits" they have earned for capturing the methane emitted by the animals
Pig farmers in Chile have found an original, legal, and even environmentally friendly way to get rich from the not-so-scented byproducts produced by their pigs. The Chilean company Agrosuper, the eighth largest producer of pork products in the world, uses a unique trade system, created under the Kyoto Protocol agreements, in order to turn pig bloat and waste into cash.
Agrosuper stores the emissions of methane gases produced by its 110 pigs and in return the company receives "credits", or merit points, for the reduction of greenhouse gas emissions - those gases that cause the earth to overheat.
The awarding of these credits was determined by the decisions of the Kyoto Convention, which was designed to limit and reduce the emission of greenhouse gases among the 124 countries that signed it. The convention sets pollution quotas for companies and countries. Companies that pollute less than the quotas set for them, can sell the "balance" they have accumulated to other companies that exceed the pollution quotas set in the convention.
Last month, Agrospor sold credits for $2.2 million per year to the largest electric company in Japan, Tokyo Electric Power, and to the largest public electric company in Canada, Trans Alta.
A worldwide trading method
The Kyoto Convention was signed in 97, in order to combat global warming. As part of the agreement, an equitable system is used, which allows profits to be reaped for contributing to the quality of the environment.
Each company in a certain sector is required, for example, to reduce the emission of harmful gases by 20%. The company can meet the demand on its own, by becoming more efficient or switching to alternative fuels. Also, it can simply buy "excess reductions" on the open market from companies that have already managed to reduce emissions below the set level.
This sophisticated global trading system will allow companies and governments to receive credit for planting carbon-absorbing trees or for investing in energy efficiency technologies. As a result, an incentive will be created to switch to less polluting technologies. This mechanism is controlled by the UN, with the help of independent auditors who provide assessments and review each project.
The European Union, for example, requires 12 different plants and power plants to comply with the convention's regulations, and predicts that the credit market in Europe, estimated at approximately $300 million, may reach approximately $10 billion in 2007. "There will be more and more demand to reduce emissions and we plan to benefit from this," said Agrosuper CEO Arau de la Serda. Agrosuper is the largest producer of fresh food and meat products in Chile, with sales of 700 million dollars a year.
China is also joining the market
The contract signed by Agrosuper with the two electricity companies, the 3rd largest in the world in the credit market, will not remain alone. More developing countries, including China, are joining the market.
Developing countries are responsible for more than a third of the world's greenhouse gas emissions, but their per capita emissions are less than a fifth of industrialized nations. The per capita emission rate will increase, as citizens of developing countries buy more cars and consume more energy. Experts predict that up to 2100 of these countries will emit dangerous gases in a quantity 3-2 times greater than the developed world.
China, with its 1.3 billion inhabitants, is the largest producer of greenhouse gases in the world after the United States. Next year, China is expected to join the credit market as part of its efforts to clean its cities, including Beijing, from air pollution by 2008, in preparation for hosting the Olympic Games.
To capture the gas emitted by the pigs, Agrosuper built special devices, called bio-digesters. These are ponds with a depth of 10 meters and an area of 100x100 meters containing pig waste covered in plastic. The methane is burned in the ponds and thereby reduces gas emissions. By next year, the company hopes to reduce the pigs' methane emissions by a third. The damage potential of methane is 20 times greater than that of carbon dioxide. Agrosuper invested $30 million in eight such devices, and $3 million in facilities that turn the waste into compost and water.
Japan's Tokyo Electric was responsible for 8.1% of all carbon dioxide emissions in Japan in 2002. Until 2010 it is required to reduce the emission levels per kilowatt-hour of electricity it produces by 20% compared to 99', but in practice the emission levels increased in 2003 by 21% compared to 90'.
