In response to the Copenhagen Climate Summit’s call for innovative environmental solutions, my law firm launched a groundbreaking program today to allow law firm clients to pay legal fees with carbon credits. The initiative is the first of its kind in the professional services industry. You can read more about my firm’s initiative in the Wall Street Journal article Will Work For Carbon Credits!’ says Florida Lawyer written by Ashby Jones.
Carbon credits are units that can offset a company’s carbon footprint. One carbon credit is equal to one ton of carbon dioxide. The credits, which can be bought and sold in international markets, have gained significant traction as a legitimate currency to transact business.
I’ve been closely tracking the Copenhagen Climate Conference currently underway in the Danish capital. Over 100 heads of State and government including President Barack Obama and Chinese Premier Wen Jiabao, as well as more than 15,000 participants, have gathered at the Conference to come up with innovative ways to address climate change.
One of the most promising solutions are carbon credits, which hold immense promise to radically change the world energy system and the way business is transacted.
My research on carbon credits as a currency to transact business led me to a groundbreaking article published several years ago in the Harvard International Review. The article, A New Currency: Climate Change and Carbon Credits was written by David Victor Joshua House of the Stanford University Institute of International Studies. The Authors presented a fascinating thesis on the power of carbon credits to transform the world energy system:
A new currency is emerging in world markets. Unlike the dollars, euros and yen that trade for tangible goods and human services, money exchanges hands for pollution – particularly emissions of carbon dioxide, which are caused by burning fossil fuels and are the leading cause of global climate change. Carbon credits, as they are called, are poised to transform the world energy system and thus the world economy.
The thesis, written in 2004, was prescient in its prediction of how the market for carbon credits would skyrocket. The global carbon credit market was worth $126 Billion in 2008. The World Bank estimates that the market could grow up to $150 billion by the end of this year.
Of course, the creation of a new global currency implies the need for coordination on a scale unprecedented in history, as Mr. Victor and Mr. House point out in their article. While the task may be daunting, it’s important to keep in mind that historically, the strongest currencies have emerged “bottom-up” from the initial efforts of a committed few.
If carbon credits were to gain global consensus, the benefits to the atmosphere and to the world economy could be enormous.
Trend to Watch: Look for More Industries to Transact Business With Carbon Credits.