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  • The Carbon Trading Boondoggle: Evidence from Europe

    Apparently people forgot to mention to the central planners in Europe that prices fall during a recession. That includes carbon prices:

    Set up to price pollution out of existence, carbon trading is pricing it back in. Europe’s carbon markets are in collapse.

    A year ago European governments allocated a limited number of carbon emission permits to their big [emitters]. Businesses that reduce pollution are allowed to sell spare permits to ones that need more. As demand outstrips this capped supply, and the price of permits rises, an incentive grows to invest in green energy. Why buy costly permits to keep a coal plant running when you can put the cash into clean power instead?

    As recession slashes output, companies pile up permits they don’t need and sell them on. The price falls, and anyone who wants to pollute can afford to do so. The result is a system that does nothing at all for climate change but a lot for the bottom lines of mega-[emitters]such as the steelmaker Corus: industrial assistance in camouflage.

    A lot of the blame lies with governments that signed up to carbon trading as a neat idea, but then indulged [emitters]with luxurious quantities of permits. The excuse was that growth would soon see them bumping against the ceiling.

    Instead, exchanges are in meltdown: a tonne of carbon has dropped to about €8 ($10.16), down from last year’s summer peak of €31 ($39.35) and far below the €30-€45 ($38.08-$57.13) range at which renewables can compete with fossil fuels.”

    The ebbs and flows of the market are causing a number of hiccups in the EU’s carbon trading plan. As a result of permit prices falling, electricity prices are up and carbon reduction is negligible.

    A similar trading scheme would like occur in the United States if we adopt a cap-and-trade plan to reduce carbon dioxide, as suggested by California Rep. Henry Waxman, chair of the Energy and Commerce Committee. The inefficiencies and unpredictability of a cap-and-trade bill would pour salt in an already wounded economy. And it would have minimal effects on global temperature. The U.S. should learn from the EU’s long, unsuccessful history when it comes to emissions trading schemes and not follow down the same path of failure.

    Posted in Energy [slideshow_deploy]

    7 Responses to The Carbon Trading Boondoggle: Evidence from Europe

    1. Ozzy6900, CT says:

      Carbon Credits are as moronic as the whole Global Warming concept along with it’s standard bearer, Al Gore! Trading credits to offset pollution is the equivalent of leaving an IOU in the bank vault after emptying it out.

    2. ra,ohio says:

      I hope ALGORE has to sell his jet.

      This is the biggest hoax ever perpetrated in the history of the world, except for the current US CONGRESS.

    3. Ken, California says:

      Recently I spoke with a former employee and technical advisor to the metals industry. His current business activity includes brokering in carbon credits among the many in industry he knows. The metals industry is a huge consumer of energy.

      He foolishly and to my mind ignorantly described his scheme as "capitalistic" and at that point the tone of the conversation soured. Just like so many in this country, the man missed that Econ 101 course as he raced toward his Phd in another science.

      In Los Angeles, the air quality bureaucrats are the enablers of many distortions that find plant expansion at the mercy of subsidized carpools or free train tickets on that recently completed rail spur that went a zillion dollars over budget.

      Thinking and reasoning have left the field.

    4. rich Weirton, wv says:

      Al Gore should be put in jail for child abuse. Think about it. How many thousands of children were forced to see Gores propoganda laden movie?

      The same movie that "showed" little baby seals drowning because they had no more ice to hold on to.

      I feel so sorry for our children. They are lied to daily by our pc propoganda spreading "schools".

      Right is wrong and wrong is right. We are monkeys uncles, not someone made in God's image.

      It's good to be homosexual…global warming is going to kill off half our world. Is it any wonder so many children are committing suicide? Even the children know right from wrong-it's called consience. No matter how many times they are told that right is wrong and wrong is right, they still know the truth in their hearts.

    5. Sliver Wisconsin says:

      Revolution revolution revolution revolution, the house needs to be cleaned out and fumigated and the inhabitants sent to Siberia where it never gets warm.

    6. Bob, Cincinnati, OH says:

      The whole issue has been blown out of proportion and has been based on opinion and no exact science. You can find the same amount of people that agree with this as that will disagree with this. The US has made great srides in cleaning up our environment and continues to do so. What I would like to see is Al Gore and his buddies go to China, Europe and other parts of the world and have them stop polluting. I would like to see him get those countires on board with this whole notion of "Climate Change", a.k.a. Global Warming. Get them to change their ways and maybe I might take him more seriously.

      But he won't and can't, those countires will/would run him out on a rail. So, he stays here as it's the easy thing to do and he has some people that will listen to him.

      What we really need to focus in on is money independance and not so much energy. The American public really needs to take notice of how much money we're borrowing as I feel that is a much more dangerious issue today than Oil. One day we're all going to wake up and realize that we're no longer in control of our country because of the debt owed to foregin governments.

    7. Richard Bulgarelli, says:

      I guess the next big industry will be "Carbon Credit Broker" When will they start teaching this inour colleges?

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