Carbon Trading

[brit2006]

This news story really makes me angry.

Its seems exactly like Ayn Rand described in Atlas Shrugged. The politicians know that the carbon trading system won't work and in fact they are counting on it not working (because if it did work they know that the economy would be damaged). All the system seems to do is make the politician a middle man who says in effect "Yes I allow you to produce."

I'm trying to decide whether I can actually believe what I just wrote in the above paragraph. You see, I'm not sure I really believe that politicians are evil. I think they may genuinely believe that what they are doing is good and may be genuinely pissed off that Britain polluted too much, yet they recognise that the economy is important to voters, and therefore allow Britain to pollute more so as not to damage the economy.

Either way the situation sucks but the second way of looking at it sucks less in my opinion.

[Sherry]

It does make one's head hurt doesn't it?

It seems to be that situation #1 is what it truly is, really, but of course, the politicians are rationalizing things as #2. They THINK they they are doing good, but really, no, they are not, because the bottom line is that they shouldn't be interfering in the economy in the first place.

The problems when they set controls on the economy, it brings forth more controls because the first set of controls do harm.

(That would be my understanding under Objectivism.)

[softwareNerd]

If one starts with the assumption that carbon dioxide is harmful and people have the right to stop others from spewing it into the atmosphere, then a carbon-dioxide permit system is better than many other types of regulation. Also, once issued, the system is more honest, as there is no repeated, corrupt permit-process.

The scheme in Europe works as follows: 5 industries (including power generation) came under the scheme. The factories emitting carbon-dioxide in these industries were told that they had the historical right to do so at the current levels. They were given permits that represented the amount that they emitted to the atmosphere. If they subsequently emitted less, they could give/sell their permits to others who wanted that right.

Obviously, companies would try to overstate their base (i.e. historical) figures, and get as many permits as they could. Even without overt corruption, companies would want to be cautious in calculating their historical emissions, preferring to overstate rather than understate the amount. The BBC story points to very minimal corruption: the calculated emissions were just 2.5% more than the actual.

For the first 6 months [Jan 2005 through July 2006] there was an expectation that factories might need more permits than had been issued. The permits were being traded at EUR10/tonne at the start and went all the way up to EUR30 per tonne recently. Then, countries issued reports on how much carbon had actually been spewed. [strikes me that this could be another place where companies or entire countries can cheat.] The report showed that the overall emissions were less than expected. Therefore, the permits weren't so valuable after all. The price has dropped back to about EUR12 per tonne.

If this was a long-term scheme, it might have finally resulted in the capping of emissions, as pointless as that may be. However, the scheme is only a three-year experiment. Given that this scheme has had no effect on emissions, the real test will come in 2007, when politicans and pundits are spinning the results of this scheme to support some new replacement-scheme.

I would bet that the majority is going to say this scheme didn't go far enough. So, two main changes might be advocated. First, a reduction in the total number of permits, perhaps introduced gradually over a number of years. The second proposal might be to issue a certain number of permits (say 75%) in the form of real rights, but make companies buy the rest from the government, up to a total of 100% of the previous scheme. You can be sure that some politicians are thinking: 2 billion tonnes, @ EUR10/tonne ... shouldn't "the people" get their cut.

In principle, politicians will realize that industry is not being pressed to the point of being hurt enough. They will act accordingly. [i'm beginning to form a hypothesis that tax-levels in a nation are closely related to the propensity of the citizens to bear the pain, not to the real "needs" of government.]

[Inspector]

I think they may genuinely believe that what they are doing is good and may be genuinely pissed off that Britain polluted too much,

But that's just it. CO2 is not a pollutant. It's harmless. It's all the propaganda of the ecologists.

[punk]

This news story really makes me angry.

Its seems exactly like Ayn Rand described in Atlas Shrugged. The politicians know that the carbon trading system won't work and in fact they are counting on it not working (because if it did work they know that the economy would be damaged). All the system seems to do is make the politician a middle man who says in effect "Yes I allow you to produce."

I'm trying to decide whether I can actually believe what I just wrote in the above paragraph. You see, I'm not sure I really believe that politicians are evil. I think they may genuinely believe that what they are doing is good and may be genuinely pissed off that Britain polluted too much, yet they recognise that the economy is important to voters, and therefore allow Britain to pollute more so as not to damage the economy.

Either way the situation sucks but the second way of looking at it sucks less in my opinion.

This whole thing is pointless

The same laws and court rulings that have prevented the EPA from making measurements so it can act per its official capacity will prevent anyone from monitoring to make sure a company is only emitting within its emission rights.

[softwareNerd]

The EPA? Does Europe have an EPA too? Are you saying that the EPA or the European equivalent do not have the power to cause trouble for companies they believe are violating their rules?

Ask the following: why would anyone pay even EUR12/tonne for the permit? If enforcement is so completely ineffective to be as good as not present, then the permits should have a price of zero.

[Inspector]

The same laws and court rulings that have prevented the EPA from making measurements so it can act per its official capacity

You say that like it's a bad thing, Punk.