What else are they planning to do with this site? Are they thinking about aggregation and emissions markets?

Well, we're thinking about a lot of things. everything from what we can do in your neighborhood to something as large in scope as world domination... But then we've said too much. Of course, what we're hoping for in the near future is a little more simple. Imagine that when you make your purchases at the local hardware store there is now a little line printed at the bottom of your receipt that reads: "80 lbs. of air pollution." Imagine then, that you can log online and see your personal pollution account. This account is a summary of the pollution results of your day to day decisions. You bought gas today? Your profile goes up. Bought compact fluorescent lights to replace your incandescent bulbs? It goes down.

Imagine then, that you are even given incentives to reduce your emissions. Maybe you get a new playground in your neighborhood if you and 50 of your neighbors can cut your pollution by a third. A scholarship fund for your community that is added to every time you choose a transportation alternative besides driving to work. These are our hopes for the future. The air will be cleaner, and you will be investing in something you care about, like your neighborhood. Plus you will be a smarter shopper, because you will have real time access to the environmental impacts of your decisions.

Technology Needed

AirHead views this site as one of a number of first steps toward that future. Of course, there are a lot of technological issues to work through before this imagined future is a reality. We do not yet have an efficient means to record such things as whether you took the bus or drove to work today or to give you credit for that choice while preserving your privacy. Right now, we'd pretty much just have to follow you 24 hours a day and root through your garbage and so forth, but nobody really wants that (plus, the independent trials we ran resulted in an alarming number of nuisance law suits and restraining orders). But means for tracking these day to day decisions are on their way. Electronic financial networks, technologies such as smartcards--credit or debit type cards that contain a computer chip and can store information--and advances in encryption technology will make an automated emissions tracking network possible. AirHead hopes that by creating an ever-expanding database of products and their related emissions, we are laying the groundwork for such a system. We hope this information will give consumers the power to demand a marketplace in which we are all informed of the true impacts of our choices. Whether this information comes in the form of real prices, product labels, or emissions tracking, it is necessary material in a sustainable society. Until then, we'll try to stay out of your trash.

Public Policy Needed

More about Developing Markets

Even without the ratification of the Kyoto Protocol, efforts to tackle global climate change are entering a new era. Global warming naysayers are dwindling in numbers as the problem becomes harder and harder to ignore. Many multinational corporations are now realizing that actions taken to reduce greenhouse gas emissions today are smart investments in the long run.

The proven effectiveness of emissions markets in tackling acid rain in the United States has served as a model for least cost solutions to global warming. Without the help of legislation, a global greenhouse gas trading market is forming. Over 100 million tons of greenhouse gases have already been traded to date, and this number is expected to grow to 50 billion tons per year within 10 years.1 For example, Cantor Fitzgerald Environmental Brokerage Services brokered a trade in October of 1999 between IGF Insurance Company, the fourth largest crop insurance company in the United States, and the Greenhouse Emissions Management Consortium (GEMCo), based in Vancouver, British Columbia, and representing ten Canadian energy firms. In this trade, 2,800,000 metric tons of greenhouse gas reductions ("credits") were generated through alternative soil and farm waste management practices in the Midwest.2

In another example, the nonprofit Climate Neutral Network has begun certifying corporations and products as climate neutral when they take steps to reduce their greenhouse gas footprint and offset the remainder. One certified company, the Shaklee Corporation, recently purchased 50,000 tons of greenhouse gases to offset their operations for two years. The offset purchases, brokered through Trexler and Associates, included solar rural electrification, energy efficiency in public schools, coal bed methane capture and utilization, and energy generation from landfill methane.3

The development of a greenhouse gas market has been hailed by many, but the direction the market design is headed today leaves out key sources of cost effective emissions reductions. citizens and communities. Historically, participation in air emissions markets has been limited to large emitters such as power plants and refineries, and the little guys have been ignored. It was believed that economies of scale dictated that only large sources could track their associated air emissions relatively easily and trade them in large quantities, therefore lowering the transaction costs of emissions trading. Because of the transaction cost issue, the ability of communities to inexpensively reduce demand for energy and therefore lower emissions has been ignored. The exclusion of small emitters from such markets has left individuals and communities with few incentives to reduce their emissions. This is an important omission, because it is estimated that up to 65% of quantifiable air pollutants in Chicago come from small sources either directly or indirectly.4 That's right. The little guy has been getting a free lunch for too long.

CNT believes that creating a fair, equitable, and inclusive trading market is essential to the long-term success of greenhouse gas reduction initiatives. Small source polluters must be actively engaged in emerging markets in order to create real environmental improvement within a reasonable time scale. CNT has spent the last year and a half examining the possibilities for including small emitters in a market based climate change solution. We've found that making use of technology and existing social organization will greatly reduce transaction costs, and we've developed an online emissions aggregation tool that we believe can empower communities and small consumers to participate in emissions markets. CNT is now proposing to test this tool as a method of place based aggregation in four "guinea pig" Chicago communities in the summer of 2001. We intend to present the outcome of this aggregation trial through a number of policy briefings to local, state, and national policy makers in the fall and winter 2001-02. We believe that a demonstration of real emissions aggregation with low transaction costs will convince policy makers of the potential for inclusion of small source emitters in developing emissions markets. And if appealing to their intellectual side doesn't work, we're more than willing to beg and grovel.

1. Dan Dudek, Senior Economist with Environmental Defense, as cited in: Carl Frankel. "They Sky's the Limit, Greenhouse-Gas Trading is Coming on Strong-and Entrepreneurs are Eyeing Big Profits." Tomorrow Magazine. May 2000. http://www.tomorrow-web.com/pom/may00pom.html (December 6, 2000).
2. Cantor Fitzgerald. "Cantor Fitzgerald Announces Unique Trade Of Greenhouse Gas Reductions." October 19, 1999. http://www.cantor.com/ebs/ (December 6, 2000).
3. Trexler and Associates. "Shaklee Corporation's Application for Climate Neutral Enterprise Certification (Public Distribution Copy)" Approved by the Environmental Review Panel March 17, 2000.
4. Center for Neighborhood Technology. "Energy and Equity: How Reducing Greenhouse Gas Emissions and Energy Consumption Can Fuel the Redevelopment of Urban Communities." April 30, 1996.