The carbon-trading racket

posted at 3:00 pm on December 8, 2009 by Ed Morrissey

If one wants to see why carbon-trading schemes retain so much popularity among the political class, this Times of London exposé explains it well.  Britain’s richest man, Lakshmi Mittal, stands to get even richer over the next few years, thanks to the efforts of politicians in handing Mittal’s companies a raft of carbon credits.  Mittal’s companies can’t possibly use them all for several years, and so Mittal’s production firms can continue their emissions levels while making a fortune on the futures markets:

LAKSHMI MITTAL, Britain’s richest man, stands to benefit from a £1 billion windfall from a European scheme to curb global warming. His company ArcelorMittal, the steel business where he is chairman and chief executive, will make the gain on “carbon credits” given to it under the European emissions trading scheme (ETS).

The scheme grants companies permits to emit CO2 up to a specified “cap”. Beyond this they must buy extra permits. An investigation has revealed that ArcelorMittal has been given far more carbon permits than it needs. It has the largest allocation of any organisation in Europe.

The investigation has also shown that ArcelorMittal and Eurofer, which represents European steel makers at European level, have lobbied intensively in Brussels. This has included threatening to move plants out of Europe at a cost of 90,000 jobs, and asking European commissioners to meet Mittal.

ArcelorMittal is now free to sell its surplus permits on the market or to hoard them for future use. The latter would allow it to avoid cutting greenhouse gas emissions for years, effectively undermining the point of the scheme.

Either way, the company will have gained assets worth around £1 billion by 2012. The eventual value could be much greater. Each carbon permit is currently worth about £12.70 but the European Union has said it wants to drive this price above £30.

And we come to the crux of the carbon-trading scheme: the ability of politicians to pick winners and losers.  In any version of this system, the government issues credits to producers based primarily on the whims of the politicians and bureaucrats in charge.  Cui bono?  The politicians themselves, who get the benefit of the intense lobbying that will result when they control the means and costs of energy and production.  Mittal obviously did made a fortune from his investment in lobbying efforts, and so did the politicians who benefited from them.

Lest anyone think that the American system will be purer, all one needs to see is the allocation of carbon credits by state under Waxman-Markey.  Politically well-connected states do much better than Midwestern and Rust Belt states, which will pay through the nose for carbon emissions.  It’s simply redistributionism through a particularly corrupt form of taxation and payoffs.

None of this comes as a surprise, of course.  Politicians love any scheme that allows them to accrue power, and this one in particular, as the Tax Foundation explained this summer:

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Lest anyone think that the American system will be purer, all one needs to see is the allocation of carbon credits by state under Waxman-Markey. Politically well-connected states do much better than Midwestern and Rust Belt states, which will pay through the nose for carbon emissions.

This argument does not hold up well considering Obama is President and IL gets slammed.

WashJeff on December 8, 2009 at 3:05 PM

If I was a mobster, I’d sooo be looking into how to get in on this scam. Talk about something for nothing.

thirteen28 on December 8, 2009 at 3:07 PM

Going GR$$N indeed.

portlandon on December 8, 2009 at 3:09 PM

This argument does not hold up well considering Obama is President and IL gets slammed.

WashJeff on December 8, 2009 at 3:05 PM

Outside of Chicago, do you really think Obama cares about our state? I sure don’t. And I am likewise sure that, if this mad scheme ever comes to pass, Chicago will get its piece of the action.

jwolf on December 8, 2009 at 3:10 PM

If I was a mobster, I’d sooo be looking into how to get in on this scam. Talk about something for nothing.

thirteen28 on December 8, 2009 at 3:07 PM

Breathe-easies?

WashJeff on December 8, 2009 at 3:11 PM

Heavens! You mean to tell me that politicians might try to help rich people get richer, instead of being pure of heart in their duty to the voters?

Buford Gooch on December 8, 2009 at 3:11 PM

thirteen28 on December 8, 2009 at 3:07 PM

The government has become organized crime.

maverick muse on December 8, 2009 at 3:11 PM

I posted that video five months ago (with transcript). Everything old is new again. Cap and Trade is like Dracula; no matter how many times you kill it, it comes back with vengeance.

BermanPost on December 8, 2009 at 3:12 PM

jwolf on December 8, 2009 at 3:10 PM

No. I am sure he does not. Don’t we (IL) have more energy in the form of coal that Saudi Arabia has in oil?

I would fully support declaring IL as Cook County and NW Indiana, and merge the rest of old IL with IN.

WashJeff on December 8, 2009 at 3:13 PM

I love that video.

KillerKane on December 8, 2009 at 3:13 PM

thirteen28 on December 8, 2009 at 3:07 PM

Go for it! It worked for Al Bore, didn’t it?

This is one of the most incredible scams in the history of the world, making Somali pirates seem like a benevolent charity.

It is a measure of how out-of-control governments have become that the promoters of this scheme aren’t rotting in jail. Instead, they are getting fat off the few people left on the planet who actually produce anything.

MrScribbler on December 8, 2009 at 3:14 PM

The government has become organized crime.

maverick muse on December 8, 2009 at 3:11 PM

They have been for a long time, they’re just now starting to do it in the open and thumbing their noses at us.

thomasaur on December 8, 2009 at 3:15 PM

Outside of Chicago, do you really think Obama cares about our state? I sure don’t. And I am likewise sure that, if this mad scheme ever comes to pass, Chicago will get its piece of the action.

jwolf on December 8, 2009 at 3:10 PM

And if Obama didn’t care about Chicago, why did he fly off to Copenhagen to pitch the city for the 2016 Olympics?

Doughboy on December 8, 2009 at 3:15 PM

This is why, ideally, all carbon credits would be auctioned off instead of handed out.

Bleeds Blue on December 8, 2009 at 3:15 PM

If I remember correctly, Obama is involved in the Chicago carbon trading board so he stands to make a ton of money too.

txag92 on December 8, 2009 at 3:16 PM

…do you really think Obama cares…
jwolf on December 8, 2009 at 3:10 PM

FIFY

mwdiver on December 8, 2009 at 3:16 PM

This argument does not hold up well considering Obama is President and IL gets slammed.

WashJeff on December 8, 2009 at 3:05 PM

What makes you think Obama has any influence on what Congress does?

MarkTheGreat on December 8, 2009 at 3:16 PM

The Illearth War, the seeds sown in the 70s.

Dr Evil on December 8, 2009 at 3:18 PM

And if Obama didn’t care about Chicago, why did he fly off to Copenhagen to pitch the city for the 2016 Olympics?

Doughboy on December 8, 2009 at 3:15 PM

Free trip on the tax payer dime for him and the Mrs…

mwdiver on December 8, 2009 at 3:18 PM

I hope we get something better than the 13 bucks we got out the stimulus ripoff.

A bag of Skittles would be nice…..

roflmao

donabernathy on December 8, 2009 at 3:20 PM

This argument does not hold up well considering Obama is President and IL gets slammed.

WashJeff on December 8, 2009 at 3:05 PM

I think someone isn’t up on current events….

http://www.chicagoclimatex.com/

dtestard on December 8, 2009 at 3:21 PM

Extra Extra. Read all about it….

US about to lose sovereignty….Climate Dooms US : (

hawkman on December 8, 2009 at 3:21 PM

This is why, ideally, all carbon credits would be auctioned off instead of handed out.

Bleeds Blue on December 8, 2009 at 3:15 PM

Correction: this is why, ideally, the whole Cap and Tax scheme should be rejected by Congress, and those politicians who supported this madness be voted out of office by an outraged electorate.

Now I will agree with you that IF we go to a Cap and Tax system, the scheme proposed in Waxman-Markey is particularly corrupt and unfair. But that’s only the icing on this Devil’s Food Cake of ruinous economic abomination.

jwolf on December 8, 2009 at 3:23 PM

G-dammit, when does the revolution start???

tickleddragon on December 8, 2009 at 3:25 PM

The last vestige of Enron

Almost two decades before President Barack Obama made “cap-and-trade” for carbon dioxide emissions a household term, an obscure company called Enron — a natural-gas pipeline company that had become a big-time trader in energy commodities — had figured out how to make millions in a cap-and-trade program for sulphur dioxide emissions, thanks to changes in the U.S. government’s Clean Air Act. To the delight of shareholders, Enron’s stock price rose rapidly as it became the major trader in the U.S. government’s $20-billion a year emissions commodity market. Enron Chairman Kenneth Lay, keen to engineer an encore, saw his opportunity when Bill Clinton and Al Gore were inaugurated as president and vice-president in 1993.
To capitalize on Al Gore’s interest in global warming, Enron immediately embarked on a massive lobbying effort to develop a trading system for carbon dioxide, working both the Clinton administration and Congress.
Political contributions and Enron-funded analyses flowed freely, all geared to demonstrating a looming global catastrophe if carbon dioxide emissions weren’t curbed. An Enron-funded study that dismissed the notion that calamity could come of global warming, meanwhile, was quietly buried.

J_Crater on December 8, 2009 at 3:25 PM

PONZI Obama, unprecedented 100% corrupt fraud of a potus.

Obama has determined his absolute powers permit him to ignore contract law, and to ignore Congressional law. He will steal Bush’s TARP legislated tax-funds away from the stipulated banks for lending to businesses, into his own filthy hands to abscond with the tax-funds illicitly.

Invisible does not equate to Transparent, though the criminals running our government would insist otherwise.

Carbon Racket
Cap and Tax
Universal Poverty and EugeniCare

maverick muse on December 8, 2009 at 3:25 PM

dtestard on December 8, 2009 at 3:21 PM

That makes sense now. Crabon credits are good for Chicago and bad for the rest of the state, which is as “bad” as MO.

WashJeff on December 8, 2009 at 3:29 PM

What makes you think Obama has any influence on what Congress does?

MarkTheGreat on December 8, 2009 at 3:16 PM

The past 11 months does support you hypothesis to a certian degree.

WashJeff on December 8, 2009 at 3:30 PM

There’s so much more to this story. Know why Goldman Sachs gave millions to Dems last year? And Obama? The smart money guys have already positioned themselves so far ahead of the carbon curve—as Al Gore has—and a number of other corps that we haven’t even seen the tip of this iceberg…it’s not just cap and trade…it’s carbon as the new currency and the next, most devastating global bubble they’re waiting to inflate. The money to be made and lost here is of galactic proportions…

Webutante on December 8, 2009 at 3:34 PM

Any more of this crazy crap – and the time will soon come when the tree of liberty will be watered with the blood of corrupt politicians.

Danny on December 8, 2009 at 3:35 PM

That’s why Gore got into it early. The REAL greenies should be having babies over this scam.

faol on December 8, 2009 at 3:43 PM

These corrupt ticks are so embedded in the system the only way to get them out is to drag them out. Execute or jail after that.

darwin on December 8, 2009 at 3:45 PM

That’s why Gore got into it early. The REAL greenies should be having babies over this scam.

faol on December 8, 2009 at 3:43 PM

What’s a real greenie?

darwin on December 8, 2009 at 3:46 PM

stands to benefit from a £1 billion windfall from a European scheme to curb global warming. His company ArcelorMittal, the steel business

Nice backdoor subsidy to the European steel industry, you EU bastards.

TexasDan on December 8, 2009 at 3:51 PM

thirteen28:

If I was a mobster, I’d sooo be looking into how to get in on this scam.

That train’s already left the station:

A revolutionary UN scheme to cut carbon emissions by paying poorer countries to preserve their forests is a recipe for corruption and will be hijacked by organised crime without safeguards, a Guardian investigation has found.

http://www.guardian.co.uk/environment/2009/oct/05/un-forest-protection

and

HM Revenue & Customs (HMRC) officers investigating a £38 million suspected VAT fraud swooped in early morning raids today. The suspected fraud involved the trading of emissions allowances (often called ‘carbon credits’)….Those arrested are believed to be part of an organised crime group operating a network of companies trading large volumes of high-value carbon credits.

http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=405990&NewsAreaID=2

jeanneb on December 8, 2009 at 3:59 PM

This argument does not hold up well considering Obama is President and IL gets slammed.

WashJeff on December 8, 2009 at 3:05 PM

You forgot one item; Obama passed off the responsibility to write the Cap-and-Tax bill to Henry Waxman (D-CA) and Edward Markey (D-MA). They’re about as far from Illinois as one can get, and not-at-all-coincidentally, California and Massachusetts make out like bandits under Waxman-Markey.

Of course, the alternative that’s being worked up by Obama’s henchpeople at the EPA is going to be universally worse.

steveegg on December 8, 2009 at 4:12 PM

LAKSHMI MITTAL, Britain’s richest man, stands to benefit from a £1 billion windfall from a European scheme to curb global warming.

I just love the way the Brits use the word “scheme” instead of “plan” like we “Yanks”. It seems so much more apropos.

Big John on December 8, 2009 at 4:15 PM

What the Cap and Trade scams are is a scheme for politicians to siphon off huge amounts of people’s money and use it anyway they want.

tarpon on December 8, 2009 at 4:20 PM

I have a Ford Focus and a Ford F-350, for economic, NOT GREEN, reasons I commute to work in the Focus. But this ticks me off so much, I might just have to sell the Focus and drive the F-350 24×7, and make sure I do no maintenance so it spews black smoke out that back whenever there’s a freakin’ Prius piece of crap behind me.

kirkill on December 8, 2009 at 4:25 PM

So forgive my ignorance, but how does any of this solve the purported problem, i.e., lowering the amount of greenhouse gas being spewed into the atmosphere?

NoLeftTurn on December 8, 2009 at 4:28 PM

Cui bono?

What does Sonny & Cher’s daughter have to do with Cap-n-Trade?

KS Rex on December 8, 2009 at 4:33 PM

What could go wrong?? I hear that Gore is set up to become a carbon billionare.

Terrye on December 8, 2009 at 4:35 PM

The Illearth War, the seeds sown in the 70s.

Dr Evil on December 8, 2009 at 3:18 PM

Gag me with a spoon, I hated those books. Wanted to smack the beehoosits out of covenant and then shoot him in the leg. I never did finish the series. Never thought of them in a greenweenie sort of way though.

Oldnuke on December 8, 2009 at 4:42 PM

FWIW:
from NRO/onthenews:

Update: 12/8 12:29 P.M.: The Competitive Enterprise Institute has announced that it will sue the EPA to block the endangerment finding.
“Today’s decision by EPA will trigger costly and time-consuming permitting requirements for tens of thousands of previously unregulated small businesses under the Clean Air Act,” said Marlo Lewis, CEI Senior Fellow. “A more potent Anti-Stimulus Package would be hard to imagine.

“The sensible solution,” said Lewis, “would be for Congress to pass legislation, such as that proposed by Rep. Marsha Blackburn of Tennessee that would pre-empt the EPA from regulating carbon dioxide and other greenhouse gas emissions.”

onlineanalyst on December 8, 2009 at 4:45 PM

This is why, ideally, all carbon credits would be auctioned off instead of handed out.

Bleeds Blue on December 8, 2009 at 3:15 PM

I hate to agree with BB, but this is exactly right if you’re going to do something like this. Don’t give anyone a free lunch and make the emitters pay for what they get.

Our pols are to corrupt too do it this way, though.

johnmackeygreene on December 8, 2009 at 5:22 PM

I dream of this falling apart and these folks taking a hit in the wallet. If it happens I hope Soros is up to his eyeballs in it but somehow I think he is smarter then that.

Cindy Munford on December 8, 2009 at 5:27 PM

I am working on a FOIL (Freedom of Information Law)request in NYC regarding Al Gore’s SEC filings. I will take a huge gamble that the filings were fraudulent for all of his businesses!

xler8bmw on December 8, 2009 at 5:38 PM

I posted that video five months ago (with transcript). Everything old is new again. Cap and Trade is like Dracula; no matter how many times you kill it, it comes back with vengeance.

BermanPost on December 8, 2009 at 3:12 PM

Great video it just keeps on giving!

MCGIRV on December 8, 2009 at 7:12 PM

Never thought of them in a greenweenie sort of way though.

Oldnuke on December 8, 2009 at 4:42 PM

We aren’t just stuck in the 70s fashion fad for clothing we are stuck with all that old junk science that was so big back in the day. Who knew they would ever manage to get this far with this carbon crap. Well maybe science fiction writers might have imagined such a time and place.

They are in trouble, people were skeptical of the science before, and after leaked hacked emails, they are convinced their suspicions were true. I didn’t need those leaked emails, I have never bought into this man made global warming scam.

How have global warming skeptics been treated by the global warming cultist? Like Cynical Social Lepers :) I remember the 70 too.

Dr Evil on December 8, 2009 at 9:14 PM