Markets in methane


After witnessing the hoards of climate change activists protesting at the G20 meeting recently, it became clear there is a public consensus that a large powerful state (and vast government spending and taxation) is the only tool for combating environmental damage.

This scheme being started in Sweden, albeit on a meso-scale, is evidence that market solutions to climate change exist where profit incentives benefit all concerned. These farmers are tapping the methane produced by their fertilizer before it is spread onto the fields. Reports suggest that from the eighteen farmers (who’s farms produce 130,000 tonnes of fertilizer) participating, the equivalent of 2.1million litres of petrol could be produced. Enough to power 30 trucks, 30 busses and 250 cars per year.

The essence of these market based solutions to climate change is that the farmers are driven by profit incentives rather than a government induced social conscience. As one farmer said:

Well I hope that I will be able to make loads of money. I hope that I will become a proper oil sheikh.

One of the greatest assets of this scheme is that it benefits both society and the farmers with relatively little costs to either – The fertilizer is a natural by-product of pastoral agriculture, and if the methane was not utilised in this way, would only escape into the atmosphere anyway. These types of schemes are highly sustainable as they do not rely upon government funding and are not plagued by top-down government interference, while the profit incentive will make them much more efficient than government projects designed to be high-profile vote-chasers.

Put simply, environmental goals cannot be achieved by simply throwing large sums of public money around.