Yes and no. Yes it may involve trading – but also it aims to avoid the biggest weaknesses of the emission trading scheme.
The emissions trading scheme was put together by many clever people and in theory should allow governments to restrict carbon emissions to a level the atmosphere can handle. As we can all see it has not worked so far.
We can see many weaknesses in the ETS – but the biggest is that governments (who control the supply of credits) have not actually been able to restrict the supply to a level where the price rises high enough to make carbon capture and other carbon mitigation schemes viable.
Why not? Probably because the political pressure is too high – it puts governments directly in the position of raising fuel prices for end users.
With our scheme, governments would have a much less obvious role – making sure that the supply of fossil fuels, which are planned to be burned with emissions of CO2 to the atmosphere, are kept to a level the IPCC is comfortable with. This will clearly ultimately raise the price of fossil fuels to the buyer, but not as a direct result of government involvement.
The Emission Trading Scheme is also a trade of ‘permission to emit’ – something explicitly allowed by government. Our scheme would be a trade of ‘ability to produce hydrocarbons allowed to be burned free into the atmosphere’ which is slightly different.
Also with the Emissions Trading Scheme too much attention went to the actual trading itself (and this is where many people managed to make money). The actual cause behind it is easily forgotten. With our scheme, the fundamental message is not about trading, it is about restricting the flow of ‘free burn’ hydrocarbon, something everybody can agree on.
A further problem with ETS is that the price needs to rise to a high level before any CO2 emissions is mitigated – until the price reaches this level, there is just a lot of expenditure, no-one knows where the money goes – so it imposes a lot of cost on industry without achieving any benefit. With our scheme, the amount of carbon capture required starts very gradually and can be shared between everyone, but it definitely happens.