Carbons Market Background
Industry pushes out CO2 – the chief cause of global warming. Forests absorb or sequester C02. The new carbons market, allows C02 sequesters to sell credits equivalent to the amount absorbed by their forest or vegetative area. Thus industry can pollute beyond their individually allowed levels, but equal to the amount of credits they have purchased.
Ultimately who will pay for these credits? You and I of course. For example an over-polluting power plant will buy credits and pass this cost onto consumers with higher fuel prices.
Carbon credits are another type of so called commoditized entities. Not unlike in the housing market, with collateralized debt obligations (CDO’s), where mortgages were bundled together into new sellable entities. Two groups of investors are active in these markets; hedgers or those with a vested interest in the individual markets, such as forest sequesters and polluters. And speculators, middlemen only interested in buying and selling these credits for profit. Speculators are often the price influencers in other commodity and commoditized markets; derivative, coffee and petroleum are prime examples.
Carbon Credits and GIS
GIS can be an important tool in the calculation and display of sequester rates from vegetative areas such as forests. It can be used to help with certification of an area, and thus sale of carbon credits. Regular data samples are stored in a database. Reports can be generated from this data. GIS can give greater insight into the data. Geospatial application can pass selected parameters to run and display results from “customized and standardized growth models on stands, tracts and management units” (Shields, 2008). GIS also offers intuitive ways to view the data via interactive maps. These geospatial applications allow users to interrogate and display growth and carbon sequestration conversion rates respectively, across the forest. Temporal, or time based, data can also be displayed. The data is then “converted to carbon units and sent to market for sale through market aggregators” (Shields, 2008).