Rescan has grabbed the bull by the horns. They offer a Carbon Inventory and Auditing service. Talk about fast response to a business opportunity arising from global warming.

Carbon credits, according to the Rescan announcement are “tradable permits exchanged between companies and nations as part of a program to reduce greenhouse gas emissions. On markets like the European Climate Exchange, groups that have emitted greenhouse gases in excess of guidelines set by international treaties can purchase carbon credits from groups whose emissions are below the guidelines.”

Rescan will send in a team to:

  • Validate your operations—basically confirm the methods used to calculate your inventory; and
  • Verify—basically confirm the amount of carbon that you have emitted or sequestered.

The following is repeated from a presentation to the Rocky Mountain Mineral Law Institute in Vancouver in July 2007 by David G. Victor a professor of law at Stanford University:

Compliance with Emissions Trading Systems: There are many trading systems emerging from the “bottom up.” Europe’s ETS is the leader, but many systems are emerging in the U.S., (both voluntary and mandatory) and are likely in Canada an Australia. Economists like trading emissions because it offers the possibility of complete flexibility “when” and “where” emissions are controlled. That dream is sound, but the institutions are not in place to allow fully global trading any time soon.

Under the system, each EU member government allocates emission credits to the industrial plants on its territory. The plants then decide whether it is cheaper to control emissions, which would free up extra permits to sell, or buy permits from others on the open market. If emission reductions prove costly then demand for permits will rise, and so will prices. Alternatively, prices fall if low-cost technologies for cutting carbon appear, or if weak economic growth saps the fortunes of emitting industries. By controlling the total number of permits—which is managed by a central administration in Brussels—EU regulators can influence prices, much as central bankers influence the value of currencies by altering the cost and supply of money.

Several serious teething problems have emerged in the short history of the EU market. First, countries have struggled to manage the critical starting point for any market: handing out the property to be traded. The National Allocations Plans that govern this process have been late and incomplete and, in many cases, laden with manipulations so that favored firms and sectors get special awards of the valuable permits. Equally troubling is that the EU has not had a clear policy on the number of permits it will allow in circulation, nor has accurate information on the state of the credit supply and demand been available to market traders. During the ETS trial period, which has run since 2005 and will end at the close of 2007, these uncertainties have caused prices to gyrate from almost $40 per ton of CO2 to about one dollar today now that it has become clear that the market is massively oversupplied.

Most controversial has been the allocation of permits to industry. The German government, for example, has been keen to protect the coal lobby and awarded especially large numbers of credits to coal-fired electric power plants. During the preliminary phase of the ETS, excess credits were awarded to the German utility RWE, which in turn charge customers for carbon “cost” is never had to pay. In principle, the European Union reviews how each government allocates these credits so that carbon does not become a new scheme for subsidizing favored firms. In practice, though, the member states hold most of the cards and are not hesitant to deal them for local favor. The construction of a carbon market, like any creation and award of novel property rights, hinges on highly political choices. Many economists rightly think that a better approach would simply tax emitters—thus avoiding the politically charged ( and corruption-prone) process of allocating valuable property rights while also giving a clear signal to industry about the cost of compliance. Most environmentalists complain that tax systems (by design) make it hard to predict the actual reduction in emissions, although in practice tax levels can be adjusted as needed.

Other companies that provide services related to carbon credit trading include: Carbonfund; APX; CarbonPlanet; and many more through Google. No real information or opinion about them other than great caution before forking out your hard earned cash.