Big Carbon

posted at 6:52 pm on August 6, 2012 by J.E. Dyer

So, how’s that carbon-trading thing going?  Big Carbon set up shop in the European Union in 2005, and is scheduled to make its North American-franchise debut in California in January.  How goes the trade?

Eurozombie

The answer in Europe is: not well.  Carbon trading is a zombie in Europe.  It’s going to start eating flesh pretty soon.  It’s on a rampage stirring up the airline industry overseas right now (on which more later), but its “life” inside the Union is creepy and inverted.

Since the inauguration of the EU’s Emissions Trading Scheme (ETS), 97 percent of emissions certificates – “permits” to emit carbon dioxide – have been given away to commercial users.  The certificates actually being sold were going for over 14 euros each in 2010, but their price has fallen by 60% in the last year.  The stock exchange in Bavaria closed its ETS trading operation on 30 June, due in part to its pointlessness.

What this means, just to be clear, is that there isn’t enough demand for any of the things you have to buy carbon permits for to justify buying them.  If you can get them for free, great.  But if you have to pay for them, you can’t earn enough to make that worthwhile.

Starting in 2013, however, European power generating companies will have to buy all their permits.  Consumer rates and prices in general will therefore go up.  Germany, with the continent’s biggest economy, is also reportedly planning to cut the number of permit freebies by 56 percent next year, which will force more businesses to pay for their permits.

To be clear, one more time:  From 2005 to 2012, the EU economies have not had to absorb the full cost of carbon trading.  Three percent out of 100 is not representative of the actual scope of the cost.  The EU hasn’t truly implemented ETS, so the record to date is not an indicator of what will happen when ETS is being paid for by everyone.  (That said, the estimated cost to the European consumer so far was about 210 billion euros as of mid-2011 – for zero reduction in carbon emissions.)

We have learned what a boon ETS can be for fraudsters.  Ingenious criminals have been buying up permits and charging a VAT when they sell them in another country, but pocketing the VAT revenue instead of handing it over the authorities.  The fraud has amounted to billions of euros.

There have been other forms of criminal activity.  ICE Futures, Europe’s biggest trading exchange for carbon permits, suspended prompt trading in permits in early 2011 due to the high incidence of fraud.  Prompt trading remains suspended, and apparently no one but the crooks has missed it.

At least one industry slated to be hit with new carbon costs is the airline industry – and non-European airlines aren’t taking it lying downChina and India have already made policies that prohibit their airlines from paying the EU-imposed carbon-permit fees.  Russia opposes the carbon fee as well, and the US is leading a consortium of nations pressuring the EU not to go ahead with the plan.  The House has approved a law prohibiting US airlines from complying with the EU requirement, and the Senate is to vote on the matter soon.  (Don’t take too much heart from this: the US-led group wants to proceed with a global, UN-sponsored plan, rather than the regional EU plan.  It’s a dodge in terms of the current EU issue, but it keeps the door open to a globalized carbon-tax scheme that would gouge Americans the hardest.)

Airlines are warning the EU that the airline carbon tax will drive away business and stifle economic growth, but of course, the airlines are just hateful, racist, capitalist fat-cats who only care about killing old ladies and puppies with evil profits.  (Interestingly, the ETS giveaways have set up a number of European companies with big stockpiles of carbon credits, which they can theoretically sell someday for a profit, if anyone wants to buy them.  As described at the JoNova link in the third paragraph, enterprising Irish power producers have already passed on their future carbon-credit costs to their consumers.  They’ve been getting the giveaways that will end in 2013.  The Irish parliament, appalled at this, added a profits tax to keep the power producers in their place.  Naturally, the option of simply not doing any of this doesn’t occur to anyone.)

The UN’s Clean Development Mechanism (CDM) is tied closely to the EU ETS, getting much of its cash from ETS sales to the disadvantaged carbon emitters: the three percenters who haven’t been getting freebies up to now.  The problem with the nascent “global market” in carbon offsets is that it, like the EU market, is vastly oversupplied.  The CDM works as follows:

[G]overnments and companies in developed countries can earn emissions offsets (CERs) by investing in low-carbon projects in developing countries. They can use the credits to achieve their Kyoto targets.

We may note that the way CDM works doesn’t reduce the carbon emitted into the atmosphere, it just induces investment money into low-carbon projects in developing countries.  Investing in this manner is counted as a reduction in carbon emissions, even though that’s not what it is.  This is basically a whole bunch of snake oil.

But interest in it has flagged dramatically anyway.  Emissions offsets, called CERs under the CDM scheme, have lost 70% of their value in the last year.

US carbon trading

Carbon trading has plummeted into an abyss of disinterest, even the Chicago Carbon Exchange having gone belly-up in 2010.  (It’s now being sued for fraud, since its investors were attracted with promises of futures, and now there aren’t any.)

The Northeast’s Regional Greenhouse Gas Initiative (RGGI) has also seen plunging demand for carbon permitsNew Jersey pulled out of RGGI in 2011, and New Hampshire is considering it as well.  The New Hampshire legislature passed a new law last week requiring the state executive to get approval from the legislature for participation in any more carbon schemes.  The big complaints?  RGGI has driven up utility rates for consumers and isn’t making much money for the state treasuries.  (This site has a good history of the sluggish sales at RGGI’s auctions.)

You have to be really, really stinking-drunk rich to play pretend with carbon trading, and fewer and fewer nations (or states) can afford it with each passing month.

California’s big adventure

So what’s the overextended, under-revenued state of California planning to do?  That’s right:  open its carbon-credit market for business in 2013.  Oh, and Quebec is joining in California’s suicidal plunge.  Eight US Western states that were originally signed up for the Western Climate Initiative (the state-chartered operator of the carbon-credit exchange) have dropped out, but Quebec – on the other side of the continent – is hanging tough.

Governor Jerry Brown and his carbon bean-counters have already baked $1 billion in projected carbon-credit revenue into his 2012-13 budget proposal.  That’s an optimistic projection, to be sure, but a characteristic one.   In the Unhatched Chickens Sweepstakes, the state also assumed $1.9 billion in revenue from the Facebook IPO (I’m not kidding) for the same budget proposal.  And those two highly risky assumptions still leave California with a $16 billion current deficit on paper.

Now it’s time to guess which state-chartered agency has been exempted, with a legislative sneak-by in 2012, from California’s “open-meetings” law, which stretches back to 1967 and explicitly includes state-chartered semi-private organizations.  Yes, it’s the Western Climate Initiative.  This agency that’s going to implement policy on taxing carbon emissions gets to meet in secret, without public scrutiny, to make its decisions.

Keep in mind, carbon-trading is an entirely artificial activity, created out of no concrete need, but from an abstract and unproven theory about catastrophic warming.  Each one of the points made publicly in furtherance of the theory has been proved to not be based on observable fact:  there are four to five times as many polar bears now as there were 40 years ago; the globe has not warmed at all in the last 20 years, but has cooled slightly; the Antarctic ice pack is bigger than it was 30 years ago, even though the Arctic ice pack has receded (but is regaining thickness again in the last 3 years, a prelude to horizontal expansion); the globe was demonstrably – based on actual temperature observations – warmer from the 1920s to the 1940s than it has been for the last 20 years, yet human carbon emissions were dramatically lower in the earlier period; the famous “hockey-stick” graph was based on falsification of data, and the globe was in fact warmer in the Medieval Warm Period than it has been at any time since; and in any case, the UN’s own scientists have said that we don’t even have a method of observing or analyzing the “feedback” mechanism that is believed to create a warming danger for the earth, much less for predicting its effects in the future.

The case for catastrophic anthropogenic global warming and/or climate change has fallen apart on examination so far.  Therefore, the whole carbon-trading scheme is based on a false premise.  It is an excellent moral lesson that nothing can go right with a policy that is based on falsifying and misrepresenting data.  From criminal fraud to tremendous loss of putative value in the exchange unit, this is what you get when you impose artificial requirements that meet no valid real-world need on the people.  Nothing good can ever come of it – and this has been, so far, only a very small dose.  Any bigger ones will be much worse.

 

The carbon offset certificate reflects a donation of 27,000 tons of emission credits to the Democratic National Convention in 2004 by Boston Carbon.  The credits donated by Boston Carbon to the DNC were created through the capture of fugitive methane gas from Jim Walter Resources, Inc., a coal mining company in Alabama.  Boston Carbon kindly donated to the Republicans as well.

 

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look here.


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Comments

The biggest fraud brought upon the world’s population!

This will be the destroyer of the world economy and launch us “Forward” into the 18th century.

freedomfirst on August 6, 2012 at 6:56 PM

Arguably CO2 has -nothing- to do with the climate. There is zero empirical evidence that it effects climate scale temperatures; all there is is an arguable ambiguous theoretical model, no evidence. See (and share) this 3 minute video excerpt from The Great Global Warming Swindle that exposes the IPCC deception on CO2: http://www.youtube.com/watch?v=WK_WyvfcJyg&info=GGWarmingSwindle_CO2Lag

anotherJoe on August 6, 2012 at 6:57 PM

Maybe they should put the credit certificates in a pack of cigarettes. They’d get more tax revenue at least.

BacaDog on August 6, 2012 at 7:01 PM

What is that coming out of the smokestacks?

MNHawk on August 6, 2012 at 7:02 PM

What is that coming out of the smokestacks?

MNHawk on August 6, 2012 at 7:02 PM

Plant food.

We now have more vegetation than ever because of the rise of co2 according to scientist.

plutorocks on August 6, 2012 at 7:08 PM

Carbon trading has plummeted into an abyss of disinterest, even the Chicago Carbon Exchange having gone belly-up in 2010. (It’s now being sued for fraud, since its investors were attracted with promises of futures, and now there aren’t any.)
.
excerpt: J.E. Dyer

.
Hilarious. : )
.
Excellent post, JED.

listens2glenn on August 6, 2012 at 7:09 PM

I have the perfect solution. It will kill two birds with one stone, so to speak. Issue plastic bags, large enough to cover ones head with, to all those who believe in man made global warming. Instruct them to place the bags over their heads, tying them off tightly around the neck. Voila! Local CO2 emissions are curtailed and the loud irritating noise that ususally accompanies those emissions are quited. Overall, man mad co2 emissions are reduced nearly immediately. Test scores in schools will improve and so will the general life of everyone.

Zelsdorf Ragshaft on August 6, 2012 at 7:11 PM

Chicago, Chicago…..

The CCX was set up in 2000 in anticipation of the United States joining Europe and other countries around the world to create a market that would reduce the emission of greenhouse gases. Under the system, factories, utilities and other businesses would be given an emissions target. Those that emitted less fewer regulated gases than their target could sell the “excess” to someone who was above target. Each year, the target figures would be reset lower.

The Exchange was the brainchild of Richard Sandor, an economist and professor at Northwestern University, and it was modeled after a successful program that was launched in 1990 and helped control acid rain in the Midwest. It was initially funded by a $1.1 million grant from the Joyce Foundation of Chicago, and President Obama was a board member at the time.

Read more: http://www.foxnews.com/politics/2010/11/09/collapse-chicago-climate-exchange-means-strategy-shift-global-warming-curbs/#ixzz22oK98wMX

Cody1991 on August 6, 2012 at 7:14 PM

On a related note, I saw this today at WUWT:

Wind Energy Is Extraordinarily Expensive And Inefficient

Press Release
London, 6 August: The Global Warming Policy Foundations has warned policy makers that wind energy is an extraordinarily expensive and inefficient way of reducing CO2 emissions. In fact, there is a significant likelihood that annual CO2 emissions could be greater under the Government’s current wind strategy than under an alternative Gas scenario.

Professor Gordon Hughes (University of Edinburgh), on behalf of the GWPF, has also assessed the likely impact of wind power on household energy bills.

In his economic analysis, submitted by the GWPF to the House of Commons Energy and Climate Change Committee, Prof Hughes concludes that meeting the Government’s target for renewable generation would increase households electricity bills by 40-60% by 2020.

So, are they going to make wind farms buy carbon permits?

:)

INC on August 6, 2012 at 7:16 PM

What is that coming out of the smokestacks?

MNHawk on August 6, 2012 at 7:02 PM

Steam. Which, by the way, is a far more significant GHG than CO2.

Anthony Watts and others have posted a new paper showing that half of the warming “recorded” by thermometers in the US is fabricated or false, a combination of poorly sited thermometer stations (over blacktop or concrete, near buildings, near air conditioning vents blowing hot air, etc, as well as stations that have had uban areas grow up around them, with all their associated Urban Heat Island effect), and of “adjustments” to records that push temps down in the early-mid 1900′s, and push them up in the late 1900′s.

http://wattsupwiththat.com/2012/07/29/press-release-2/

iurockhead on August 6, 2012 at 7:17 PM

On a related note, I saw this today at WUWT:

Wind Energy Is Extraordinarily Expensive And Inefficient

So, are they going to make wind farms buy carbon permits?

INC on August 6, 2012 at 7:16 PM

On a related note to your related note, the truth about wind really blows:

http://www.energytribune.com/articles.cfm/5623/Wind-Energy-The-Truth-Blows

To replace the Palo Verde Nuclear Power Plant with wind, you would have to pave the entire state of Rhode Island (or an equivelant area) 1.5 times over.

Alberta_Patriot on August 6, 2012 at 7:22 PM

cabon offsets=Taking money from productive members of society and giving it to those who are less productive.

newportmike on August 6, 2012 at 7:29 PM

Taking money from productive members of society and giving it to those who are less productive. really deserve it like Gore, Obama and the rest of the Carbon Cabal.

newportmike on August 6, 2012 at 7:29 PM

Cody1991 on August 6, 2012 at 7:34 PM

So, are they going to make wind farms buy carbon permits?

:)

INC on August 6, 2012 at 7:16 PM

No, they will just make the manufactures of the said wind mills buy the credits, which of course will make the price of making said wind mills even MORE expensive, therefor making power even more expensive for the end user… its a big circle and there will be winners and looser… sadly, people like me and you will be on the loss side of things while we eat by candle light.

watertown on August 6, 2012 at 7:36 PM

From J.E’s post

Since the inauguration of the EU’s Emissions Trading Scheme (ETS),

At least they had the balls to call it a Scheme!

massrighty on August 6, 2012 at 7:49 PM

Since the inauguration of the EU’s Emissions Trading Scheme (ETS), 97 percent of emissions certificates – “permits” to emit carbon dioxide – have been given away to commercial users.

Well, they did call it a scheme. What were you expecting?

29Victor on August 6, 2012 at 7:50 PM

At least they had the balls to call it a Scheme!

massrighty on August 6, 2012 at 7:49 PM

GET OUT OF MY HEAD!!!!!

29Victor on August 6, 2012 at 7:50 PM

Solyndra is the most perfect crime ever followed by this crime.If a company exceeds their emissions and buys credits to offset the limit how does this reduce emissions?The only thing reduced is bank accounts.

docflash on August 6, 2012 at 7:58 PM

Argue the pros and cons of Geo. Bush all you want. We dodged a gigantic bullet by defeating aLgORe.

98ZJUSMC on August 6, 2012 at 8:10 PM

GET OUT OF MY HEAD!!!!!

29Victor on August 6, 2012 at 7:50 PM

Sorry!

/leaving now…

massrighty on August 6, 2012 at 8:11 PM

come to MC’s House O Carbon Credits. We have only the very best CC’s in stock. Only the Highest Quality Carbon Credits can be called MC. Act NOW, and we’ll include FREE SHIPPING. Only $100,000.00 to own your very own High Quality Carbon Credit. Don’t be fooled by scammers or imitators ;) Call or Click Today!

maineconservative on August 6, 2012 at 8:20 PM

but wait! there’s more! if you act now we’ll include a handmade display case for your credits so you can show them off to all your friends and prove how smart you are….. a $99.99 value, yours FREE! but you have to ACT NOW, MC’s House O Carbon Credits… when only the very best Carbon Credits will do!

maineconservative on August 6, 2012 at 8:24 PM

What’s coming out of the stacks? Water vapor, just like the cooling towers at the nuke plants. There are electrostatic precipitators, bag houses and scrubbers that clean the exhaust from power plants. Precipitators and bag houses take the particulates out of the exhaust and the exhaust is further drawn through water to take out the acid, which is sulfuric and sold as a by product. The particulate matter is also sold and used in other products.

mixplix on August 6, 2012 at 8:39 PM

maineconservative on August 6, 2012 at 8:24 PM

But where’s my Ginsu knives? Don’t I get Ginsu knives with this offer?

lfwest on August 6, 2012 at 8:46 PM

We now have more vegetation than ever because of the rise of co2 and enviro-Nazis according to scientist.

plutorocks on August 6, 2012 at 7:08 PM

Don’t forget or diminish the effect these people have on the advancement of civilization.

Rio Linda Refugee on August 6, 2012 at 8:48 PM

Article I Section 10

Did I miss the compliance therein?

John Kettlewell on August 6, 2012 at 9:26 PM

Would it be a good idea if I converted my carbon credits into Facebook stock?

BL@KBIRD on August 6, 2012 at 9:31 PM

As I said in the Green Room: it’s a religion masquerading behind junk science. Call for the separation of church and state.

John the Libertarian on August 6, 2012 at 9:52 PM

the globe has not warmed at all in the last 20 years, but has cooled slightly

Sure. If you take Jones’ quotes in the 2-1/2 year old article at their face value (completely out of context) and listen to the Heatland spokesperson (who isn’t a scientist, and therefore has no clue).

Check the data, compiled and analyzed by experts.

BTW, the arctic is in full melt-down, massively suppressing the albedo effect, fueling the positive-feedback of warming.

And you might want to read what Richard Muller, the one that climate change denialists quoted endlessly, now says after careful analysis of data.

J.E., you’re way behind the times.

oakland on August 6, 2012 at 10:03 PM

rofl, I took a guess and was correct.

The True Believer™ is here!

tom daschle concerned on August 6, 2012 at 10:23 PM

What about the Antarctic ice buildup Oakland?

Can you spread some lies and fear about that?

tom daschle concerned on August 6, 2012 at 10:27 PM

oakland on August 6, 2012 at 10:03 PM

Junk and fabricated “science” and “”facts””.

Your moniker gives away your agenda.

Wolfmoon on August 7, 2012 at 12:33 AM

What say you prophet of doom?

tom daschle concerned on August 6, 2012 at 10:31 PM

No no no, THIS Prophet of Doom

Wolfmoon on August 7, 2012 at 12:35 AM

It’s astonishing that there are those on both sides of the ideological fence intent on pushing us back into the Middle Ages.

Dr. ZhivBlago on August 7, 2012 at 12:42 AM

Personally, I like warm weather. I feel better. The earth generally seems to like it warm also. It gets much greener.

Bmore on August 7, 2012 at 1:47 AM

Argue the pros and cons of Geo. Bush all you want. We dodged a gigantic bullet by defeating aLgORe.

98ZJUSMC on August 6, 2012 at 8:10 PM

But manbearpig is real !! I’m cereal.
nobody will listen to me but I’m super cereal !!!
Excelsior !!!

dmacleo on August 7, 2012 at 4:45 AM

oakland on August 6, 2012 at 10:03 PM

Please explain why high atmosphere C02 levels has never prevented the end of a heat age and that low atmosphere C02 levels has never prevented the end of an Ice age.

Slowburn on August 7, 2012 at 7:20 AM

If carbon trading doesn’t work, will we have to bail it out?

BTW, I still think its all that water from combustion that’s making the seas rise /

tomg51 on August 7, 2012 at 7:45 AM

climate change denialists

oakland on August 6, 2012 at 10:03 PM

No real scientist would equate climate change and its possible causes to Holocaust denial. Which pretty much paints you as a Political Science retard, and not any sort of real scientist.

You chumps just can’t help it when it comes to exposing yourselves as the personal and professional frauds you are, can you?

MNHawk on August 7, 2012 at 8:51 AM

Steam. Which, by the way, is a far more significant GHG than CO2.

iurockhead on August 6, 2012 at 7:17 PM

Ding ding! We have a winner. You obviously know more basic chemistry than anybody at Hot Gas, who keeps displaying pictures of steam, when writing about “carbon.” Come to think of it, “carbon” would have a hard time rising out of smokestacks, also.

MNHawk on August 7, 2012 at 8:53 AM

Governor Jerry Brown and his carbon bean-counters have already baked $1 billion in projected carbon-credit revenue into his 2012-13 budget proposal.

This agency that’s going to implement policy on taxing carbon emissions gets to meet in secret, without public scrutiny, to make its decisions.

the whole carbon-trading scheme is based on a false premise. It is an excellent moral lesson that nothing can go right with a policy that is based on falsifying and misrepresenting data. From criminal fraud to tremendous loss of putative value in the exchange unit, this is what you get when you impose artificial requirements that meet no valid real-world need on the people.

To paraphrase Obama’s campaign slogan, “Bend over!”

woodNfish on August 7, 2012 at 11:38 AM

It’s carbon dioxide, not ‘carbon’. Don’t fall into that euphemistic trap.

And CAGW (Catastrophic Anthropogenic Global Warming) is at best a speculation, not even a falsifiable hypothesis, and certainly not a ‘theory’.

Actually, CAGW is best described as a dogma.

This will be the destroyer of the world economy and launch us “Forward” into the 18th century.

freedomfirst on August 6, 2012 at 6:56 PM

The best way to put the kibosh on this is to elect conservative Republicans to the House and Senate. Now if only we could find a solid candidate to get my Representative, the execrable Ed Malarkey, out of the House, this would be a happy November.

MrLynn on August 8, 2012 at 9:05 AM