Emissions Trading

When will it ever end?

Maori wanting to tax whitey for every perceived grievance they can dream up:

 The peak Maori body advising the government on climate change issues says the weak provisions intended for the Emissions Trading Scheme are robbing Maori of hundreds of millions of dollars by depressing the value of New Zealand carbon credits attached to Maori forestry holdings.

The comments coincide with the value of a New Zealand Unit (NZU) dropping back below $3, a historic low point, for the second time in a month, as a glut of European carbon credits combines with New Zealand’s policy to allow local greenhouse gas emissions to be offset by unlimited foreign-sourced carbon credits.

Of course the solution will be to thrown millions at them in “compensation”.  And they will end up selling them to rich Americans or Chinese anyway.

When the Treaty of Waitangi was signed not even a taniwha could have predicted a trade to develop in thin air.

Carbon markets are rooted. Is anyone surprised at this graph?

WHAT would you say about a market that has helped reduce carbon emissions by a billion tonnes in seven years, attracted $215 billion of green investments to developing countries (more than any private environmental fund) and cut the cost of climate-change mitigation by $3.6 billion? The answer, to judge by a United Nations panel looking into the workings of the Clean Development Mechanism (CDM) is: you’d say it is a shambles.

The CDM was set up under the Kyoto protocol to get developing countries to do their bit to reduce carbon emissions. The mechanism allows projects that reduce greenhouse-gas emissions in poor countries to earn a carbon credit (a “certified emission reduction”, or CER) for each tonne of carbon dioxide avoided. The credits can be sold to firms in rich countries which are obliged under Kyoto to cut their emissions. The idea was to encourage carbon saving where it was cheapest (ie, in developing countries), increasing efficiency.

The trouble is that the supply of credits has far outstripped demand. The one-billionth CER was issued on September 7th. But the largest greenhouse-gas emitters either did not ratify the Kyoto protocol (America) or were not obliged by it to cut emissions (China and India). That has left Europe as the main source of demand for credits, and the CDM has become a sort of annex to Europe’s cap-and-trade scheme, the Emissions Trading System. But the euro crisis has reduced industrial activity (cutting pollution) and European firms were anyway given overly generous carbon quotas under the cap-and-trade scheme. So carbon prices have collapsed, falling from $20 a tonne in August 2008 to below $5 now (see chart).

While the argument over Global Warming still has some life in it, there is no doubt at all about the cures that Green economists have devised.

From ethanol production destroying rainforests, to inefficient windmills blighting the landscape and the solar industry going bankrupt, they are all utter failures.

Now the biggest rort of all, the mad carbon trading scam, is on the brink of collapse.

And the news doesn’t come from sceptic blogs – it is reported by The Guardian, the left-wing UK newspaper that is one of the most passionate advocates of the watermelon cause.

ᔥ The Telegraph

This study is going to put the shits up the Greens…it appears that gas is greener than wind:

Building gas-fired power plants instead of more offshore wind farms could actually lead to greater carbon savings at a lower cost, a leading think-tank has claimed.

In a report today, Policy Exchange argued that the government should scrap 4GW of its planned 13GW target for offshore wind generation by 2020.

By building cheaper gas generation instead it could save £700-£900m a year in costs that would have been passed onto billpayers, it calculated.

These savings could be redeployed by insulating hundreds of thousands more homes and doubling public funding for research and development in key low-carbon technologies, it said.

That would still leave enough money to “buy and retire sufficient carbon permits each year to reduce emissions by six times as much as the 4GW of offshore wind”.

It argued: “To achieve maximum overall emissions reduction and low carbon innovation, the electricity market needs to be allowed to invest in gas as a transition fuel, subject to a long-term EU emissions cap.”

Even if gas-fired power plants had to be retired early because of the EU’s emissions cap, it would still be a “far cheaper” interim solution than building offshore wind while the costs remain so high, it said.

ᔥ The American Interest

This news isn’t going make the Greens very happy:

But perhaps the greens should put down their megaphones and protest signs for a minute to take another look at the data. A new report discussed in the FT claims that American shale gas production has actually reduced carbon emissions by 450 million tons over the past five years, during which fracking came into widespread use. As the report mentions, gas—mostly obtained via fracking—has grown in usage by 38 percent over the past year alone, while much dirtier coal has fallen by nearly 20 percent over the same time period. The correlation between the rise of fracking and a fall in carbon output is not a coincidence. While greens have spent years chasing a global green unicorn, America has been moving towards reducing its carbon footprint on its own, and fracking has been the centerpiece of this change.

In fact, America’s drop in carbon emissions is greater than that of any other country in the survey. Greens have often praised Europe and Australia for their foresight in adopting forward-thinking carbon-trading schemes, while chastising America for its reluctance to do the same. Yet the numbers are out, and America has actually performed better than its carbon-trading peers. From an empirical standpoint, fracking has a much better track record at reducing emissions than the current green dream.

ᔥ The Telegraph

India has joined China in rejecting their stupid carbon charges for airlines and threatening retribution:

The threat of an aerospace trade war between Europe and the rest of the world has escalated after India joined China in threatening retaliation over the European Commission’s carbon emissions charges.

Chinese airlines have cancelled $14bn (£8.8bn) of orders with European aircraft manufacturer Airbus following the introduction of the charges and a senior Indian official has now warned there are “lots of measures” that India could take if the EC does not back down.

“The question is, are you [the European Union] provoking the world into a trade war?’,” the official told Reuters.

The EU Emissions Trading Scheme (ETS) requires airlines flying to or from Europe to buy carbon permits to offset their emissions from January 1 this year. However, non-European governments are furious that the charges cover the entire flight and not just European aerospace.

It is understood that India has told its airlines not to buy carbon credits from Europe or share emissions data, although it has not ordered the cancellation of orders from Airbus, which dominates the Asian aerospace market. India is also prepared to impose steep charges on European airlines to fly into India if Indian airlines are blocked from flying into Europe because of the ETS. “We have the power of the economy. We are not bleeding as they are,” the Indian official added.

ᔥ The Telegraph

Climate Change is such a crock:

Ed Davey, the Liberal Democrat Energy Secretary, said he would not scrap or water down the Climate Change Act, after a year-long review into reducing bureaucracy surrounding environmental laws.

The Act underpins all of the Government’s policies on reducing carbon dioxide emissions, from support for wind farms to higher road taxes for more polluting cars.
It costs up to £18 billion per year, the equivalent of £650 for every household, according to a government analysis.

The Chinese don’t like the gouging by the EU in taxing airline emissions. They warned Europe that they wouldn’t pay them and the Europeans didn’t listen. So the Chinese have given them a real world wake up call:

China is blocking orders for at least US$12 billion ($14.5 billion) worth of Airbus jets to protest against the European Union’s emissions trading fees, in a new challenge to the programme aimed at fighting global warming, the planemaker said yesterday.

With some analysts warning of a brewing trade war, Airbus spokesman Stefan Schaffrath said his company was seeing “retaliation threats” from 26 countries, “in particular from China”.

He said 35 orders by Chinese airlines for A330 planes are on hold because China’s Government was refusing to approve them. Orders for a further 10 A380 superjumbos were also under threat, and the combined list prices of the aircraft was US$12 billion. “The economic impact is real,” he said.

Boeing will be licking their lips in anticipation…I bet they have already sent in their deal maker to further undermine the Frogs.

Anytime soon the EU will realise that taxing air isn’t a viable proposition for long term economic viability.

No surprises. It just doesn’t.

Some specific key findings from the study are:

Generally speaking, carbon taxes are easier to implement successfully than cap and trade plans.

Proponents of carbon pricing plans have often seen their proposals become unpopular, and paid a severe political price. For example, support for ambitious carbon pricing measures contributed to recent electoral defeats for congressional Democrats in the United States and the Liberal Party of Canada.

Opposition to carbon pricing plans often coalesces around the notion that these policies are a “revenue grab” by governments. This source of opposition can be softened somewhat, if policy proposals are clearly revenue neutral and include transparent revenue recycling mechanisms.

Even carbon pricing plans that are revenue neutral overall can cause significant harm to specific industries, groups and regions within a jurisdiction, leading to the development of fierce, concentrated political opposition that can result in policy reversal or block implementation altogether. If policy design ensures identifiable groups (such as low-income individuals) and regions that are likely to be harmed are compensated, the likelihood of fierce political opposition can be somewhat reduced.

So why do we have carbon pricing here?

Unfortunately not our one…it is the European ETS that is in trouble:

Europe’s largest employers’ group has warned against meddling in the carbon market to prop up sagging prices, just a day after one of the continent’s top energy executives declared the market “dead” and demanded urgent intervention to save it.

In a letter to parliament released on Wednesday, Philippe de Buck, president of BusinessEurope, warned that moves to withdraw carbon permits from the market to bolster prices “would, if implemented, create further uncertainty and price volatility, and establish a risky precedent of rapid political interference in the market”.

Mr De Buck, whose constituents have struggled to forge a common position on the issue, said he wanted “an open discussion … about the general climate policy framework and the longer term future” of the carbon market.

In December, the European parliament’s environment committee approved a resolution calling for the removal of more than 1bn surplus carbon permits from the market in an effort to shore up prices. The industry committee will vote on a similar measure at the end of this month.

Other elements of corporate Europe, particularly heavy industry, argue that such meddling would make a mockery of the market.

Johannes Teyssen, chief executive of Germany’s EON, urged policymakers to make fixes. “Let’s talk real: the ETS is bust, it’s dead,” Mr Teyssen said in Brussels this week, adding: “I don’t know a single person in the world that would invest a dime based on ETS signals.”