Profit through regulation of markets
Which caring environmentalists are trying to save the world through carbon credits? That would be the Banksters. Watch how the banks are working to “fix” the free market, via intervention and regulation, and milk the system to maximize profit. The so called capitalist pigs are really working in the style of the Soviets.
How sick is the EU carbon market? “It’s a dead man walking” according to Johaness Teyssen, chairman of EON.
The price of carbon hit record lows recently:
Carbon permits plunged to a record after European Union data showed emissions from factories and power stations in the region fell more than expected last year amid milder-than-normal weather.
EU carbon for December dropped 11 percent to close at 6.34 euros ($8.45) a ton, the biggest loss since April 28, 2006 on the ICE Futures Europe exchange in London. The previous low was 6.38 euros on Jan. 4. Power-industry emissions dropped to 2009 levels, said Matteo Mazzoni, an analyst for NE Nomisma Energia Srl in Bologna, Italy.
“That is the elephant in the room,” he said today by e- mail. “And then, of course, you have stagnating industrial production.”
But wait. Isn’t “lower industrial output” what the system was supposed to create? Isn’t that the aim — to reduce those evil carbon emissions?
The Verified Emissions Data (CED) released by European authorities showed a 2.4 per cent drop in emissions in 2011, nearly twice the fall expected by analysts. A variety of explanations was given, including unusually warm weather and the economic downturn, but what surprised some analysts was the 3.1 per cent fall in emissions from the power sector when a 1.6 per cent increase had been anticipated, particularly after the closure of nuclear power stations in Germany.
In fact, German emissions fell 1 per cent overall, and emissions from its power sector were down 1.9 per cent. Fossil fuel generation in France slumped 11 per cent. Analysts said because France had completed only 25 per cent of its data, the fall could be greater.
But it was never about the environment, and instead of being pleased, for carbon market players, the price has become too low to make a difference to the environment to make a decent cut, and to help their $200 billion renewable investments thrive.
So what do “environmental agencies” like, say, Goldman Sachs, Deutsche Bank, and HSBC, do? When the price in the market is wrong, they ask the government to sweep out a slab of the products on sale so that they get the price they want.
Deutsche Bank analyst Mark Lewis said “the data underlined the need for urgent action to be taken by the EU to “re-establish scarcity.”
“Now more than ever, the only value in EUAs lies in their political optionality,” Lewis said. He cut the bank’s forecast price range to €5-7/tonne from €6-9/t previously. Gray agreed: “Any hope that the EU ETS could organically shake-off oversupply was officially crushed today, putting the spotlight back on supply reduction proposals.”
Deutsche Bank went on to say that even removing 1.2 billion credits would not be enough.
“While a set-aside would undoubtedly be the most pragmatic way of re-establishing meaningful price tension in the near term, we do not think it would be enough, on its own, to re-establish the longterm credibility of the scheme.”
Oh and then there is the long term paradox of this market, the more it succeeds, the less it is worth:
EU plans to reduce energy use, including measures such as household insulation, may further increase the oversupply in the market as less energy is used and so fewer permits are required
The EU carbon trading scheme is not a “free market” solution to an environmental problem, it’s an unholy coalition of bankster-big-government interests. Those who clamor for a free market solution are either the people who don’t know what a free market is, or the people who profit from a fake free market.
Related posts:
Deutsche Bank *really* wants us to trade carbon
Bankers, lawyers, investors disappointed: shucks
Deutsche Bank — A Wunch of Bankers
When Communists are advocating the free market solution – that’s when.
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That would be those weirdos led by Milne, what are they called again?
…The F#$%+@G Watermelons! Thats who!
Who would`ve thought the Bankers and Greens would hop into bed together!
Watch “Two-tooth” Milne try and screw the PM in the coming months only to have it come around and bite her on her arse!
Personally, I wouldn`t want to be anywhere near that arse!
The Greens err Watermelons are screwed!
Election Now before we turn into Stalingrad!
Please Windsor and Oakeshott, you have no idea…
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“Who would`ve thought the Bankers and Greens would hop into bed together!”
None of us suspected that capitalists and communists, scientists and politicians, liberals and conservatives, Republicans and Democrats, leaders of the “Free West” and the “Communist Block” would “hop into bed together!”
But that is exactly what happened. When? Why?
1. World leaders reacted in fear when they saw Hiroshima being consumed by the first man-made “nuclear fire” on 6 Aug 1945
2. Driven by the survival instinct, they secretly agreed to
_a.) Unite Nations to avoid the threat of nuclear war, and to
_b.) Hide the source of energy that produces “nuclear fire”
3. Within a few months the United Nations was formed and the Royal Astronomical Society published an abrupt U-turn in Fred Hoyle’s scientific opinion about the internal composition of the Sun [Fred Hoyle, “The synthesis of the elements from hydrogen,” Monthly Notices of the Royal Astronomical Society 106 (1946) 255-259].
4. World leaders became rulers rather than servants of the public in those few months and tried to hide the nuclear energy (E) stored as mass (m) at the centers of
_a.) Heavy atoms, like Uranium
_b.) Some planets, like Jupiter
_c.) Ordinary stars, like the Sun
_d.) Ordinary galaxies like the Milky Way
5. Nuclear energy (E) is being released as m becomes E at the fountain of energy that determines the unidirectional flow of the universe
_a.) Sustaining life,
_b.) Heating planet Earth,
_c.) Causing plants to grow,
_d.) Earth’s climate to change,
_e.) Creating and destroying elements.
For more details on this ~67 year tale of “strange bedfellows”, see
http://omanuel.wordpress.com/about/
http://omanuel.wordpress.com/about/#comment-31
http://www.nytimes.com/2012/04/17/science/rise-in-scientific-journal-retractions-prompts-calls-for-reform.html?comments#permid=152
http://www.nytimes.com/2012/04/17/science/rise-in-scientific-journal-retractions-prompts-calls-for-reform.html?comments#permid=164
With kind regards,
Oliver K. Manuel
Former NASA Principal
Investigator for Apollo
http://www.omatumr.com/
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including our Labor/Green coalition hard left govt.
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The Fabian Society of socialists international Labor Green Australia branch. New world order with new world government, no borders, no sovereign nations, one vote on value as Bob Brown has indicated. Problem is what do we do when the human locusts invade with 22 million voters only asking for help?
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When there are insufficient payers in the market who are unconnected.
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Went to the Delingpole talk in Perth last night! Fantastic as expected! Best part? When James was making comparisons with Lord do the Rings. The first thing that popped into my mind was that I didn’t realize that Sauron was a redhead!!
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Is there a recording or something?
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They’re going down, but there’s still a way before carbon credits hit their true market equilibrium price – which is zero. Amazing that supposed financial wiz kids haven’t worked that out yet.
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As usual, following the money leads to interesting places. The problem faced by those parties wanting to make juicy commissions trading carbon credits, is that EU governments want the price to stay low and have absolutely no interest in adjusting the supply side. The priority for governments, is to get people back to work, so a high price just forces industry to relocate outside the EU and thereby exacerbates the unemployment problem.
Pointman
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For the Green brand of socialism wasn’t that always the objective? To de-industrialise. To de-capitalise? These people are ideological to the point of utter irrationality: the lunatics really are now running the asylum it seems. We are seeing that here in Australia too. Perhaps the UK is at last finally realising the inevitable trajectory of green socialism. Time will tell for them and for us but the political landscapes in Germany and France are not so accommodating of a swift U-turn. I think this decent into the abyss could easily build momentum and the banksters and other corporatists who were happy to bet with taxpayer money are now losing their own shirts on sovereign debt… Will Europe follow Argentina’s lead and shall we next see whole-sale seizure of private energy assets by the superstate? I would like to share Matt Ridley’s optimism but I do wonder whether or not it has all gone just too far now…?
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Becomes a little tricky then doesn’t it? As with all regulated “free” markets vested interests require divergent outcomes. A carbon price of zero would create more jobs; just ask the workers at Redcar. Their jobs and a healthy cheque went to India. I’m sure George Soros and Al Manbearpig hope the credits increase in value. Soon the politicians are going to admit they were misled by dodgy scientists and draw back as they realise the world is going to hell in a handbasket not because of CO2 but of their own stupidity.
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This is a problem that needs a solution…
Rinse/Repeat is shorthand for the above superceding Clause applied in all situations, for which the Proletariat is In Absentia. Typically in effect, ad infinitum.
Necessity; the Tyrant’s plea
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That’s pretty much the money shot right there… literally!
Okay, so the banks want to make money from carbon trading. They need a perception that carbon emissions should be controlled, but “solutions” that are effective in reducing carbon emissions will reduce the demand for credits and reduce the brokerage fees they can make. Now for some wild conjecture.
Are we still wondering why so many solar and wind power businesses were launched and went broke when their business plan could not have worked even on paper? Somebody still lent them the capital to start up, regardless of their viability. Join the dots, people. Banks had the money, wanted to fuel a perceived need for carbon emissions credits, but didn’t want any real solution to actually succeed and solve the “problem”. Bam! Jo, follow those Benjamins! I’ll split the Walkley with you 50/50?? 🙂
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Jo,
I learned this lesson 10 years ago to try and get a inverted turbine marketed. The largest power generation supplier said that he was totally satisfied with his current customer base . This turbine would have taken out 18 turbines for one because of the torque it produces which is what increases the output of electricity.
Anyway, who would not want to buy their breathable air like buying water?
The bankers love making more money from selling no product.
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Yet Australia introduces a Carbon tax at $23 per tonne and then an ETS. Facepalm!!!
btw Jo, will you be writing a report on the ABC show “I Can Change your Mind on Climate” special? Looks interesting and was intrigued by your brief comment on one of your of blogs.
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Carbon Tax $23/tonne plus profit margin at each link in the supply chain plus 10% GST to consumer.
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Dennis,
Correct – the multiplier is going to hit by December with the power factor alone! CO2 Tax plus margin, plus 10% Gst at every link in the supply chain from producers, packaging, logistics, retailers etc etc etc! By Xmas this year – prices will have gone through the roof! Medical, services, recycling and just about every facet of our daily economic interactions!
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The term “Free Trade” really means surrender of our domestic production and prosperity for the sake of maximum international return on equity. If the ALP succeeds in morphing from the Carbon Tax to a Carbon Credits Scheme (as tradeable securities); this directly profits them and their ALP-linked businesses.
Why? Well, they will make a nice profit for themselves thank you very much, because the laws say no one in Australia will trade credits immediately- except for government-backed projects. Wow.They will sell credits from their very own projects to the internationalists as soon as the carbon trading law is instituted.
Is this tax all about saving the planet – or enriching the ALP?
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Carbon credits are nothing more than the white collar crime of trading thin air. North Korean politics at play where forced participation is the driving force.
We would be much more comfortable as a society if carbon credits were renamed flying unicorns, at least we would all be equity holders in exotic animals.
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Completely O/T
But people may get a laugh.
From a time when CO2 was not causing climate change.:-)
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That’s awesome. We should get a few sharps from our BoM to take this history lesson in humility.
The famous professors were not too far wrong. Electricity is a small part of the Urban Heat Island effect. All those kilowatt hours disappear as heat when you use them. Counts for zero in the regional or global scene of course.
More pertinently, Piers Corbyn makes plenty of good weather predictions using a theory that involves solar flares sending charged particles down to our atmosphere, causing electric currents along the way, and affecting our weekly weather. Giant antennas in Antarctica and Kergulean island study the effect of Coronal Mass Ejections on our ionosphere in a project called CEDAR, it’s all quite fascinating.
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Jo, your closing paragraph is spectacular:
Wise words!
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When the Mafia did this it was called a protection racket and people went to jail.
Now the Government and the banks do it and it is called an Emissions Trading Scheme.
And to add insult to injury the world seems to have a missing sink problem.There does not seem to be enough CO2 in the atmosphere as there should be from the amount of fossil fuel we are burning.So maybe a lot of people have been buying permits for CO2 they have not emitted.
Hard to keep track of something you can’t see.:-)
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It’s got Ponzi scheme written all over it. Just a method of transferring our wealth into the hands of the financial elite, with governments getting their thirty pieces of silver as collection agents.
But the money’s only a part of the swindle, I think; it’s a power grab. They want to demonstrate that they have the means to control governments and the like, and make us think we have no way to refuse. It’s even better if we grow to love it, Room 101 style. Great turnouts at events like Delingpole’s and Monkton’s indicate, however, that not everyone swallows the medicine.
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[snip, maybe be a bit more diplomatic…? – Jo]
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Of course, my comment was meant as a joke. I’ll change it for this : “Save the environment : [sack an ecologist ]
*[Jean-Paul, I recognise you meant it as a joke, but when some of them really do want to put us into looney farms, they will take it literally. We don’t wish harm on anyone. -Jo]
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I was just looking up some info on Emissions Trading on Wikipedia and happened upon this little nugget…
Anyone know how deep into this NGOs such as Greenpeace, Friends of the Earth, Oxfam and WWG might be..?
Also, with Rio+20 happening in June, I wondered if we might have to brace ourselves for some murky financial shenanigans re: emissions trading behind closed doors at that ‘green’ event..?
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Interesting.
I don’t have an answer to that, but a related question:
When the British government fails to meet the “legally binding” targets they have set for CO2 emissions, is someone going to sue them in court? And if so, might the BBC pension fund be included amongst the litigants?
Hopefully they have included sufficient wiggle-room in the definitions of these targets.
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Given the benefits CO2 yields to the environment, price of a carbon dioxide emission permit should be less than zero, i.e. carbon dioxide emissions should be subsidized – directly out of WWF and Greenpeace budgets.
That will be the day of peace and love taking over the World – environmentalists paying for the coal burning industries to stay in business. And why the hell shouldn’t they – electricity generated by coal improves our lives, in fact makes them what they are, at the same time generating an invaluable plant food component of the food chain, which benefits rich and poor without discrimination. It also does not require destruction of forests and construction of windfarms in areas of natural beauty. What is there not to like??
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Bad idea. In the EU, the green NGOs get up to 70% of their total budget from the EU commission so it’s mostly tax payer money, meaning the tax payer pays for the destruction of his own job.
First you would have to separate the NGOs which are in reality BONGOs/GONGOs/QUANGOs from the bureaucracy, but then, who would the bureaucrats use as shocktroops?
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It always has been, currently is and always will be about money and power.
Once upon a time, the environmentalist actually played a positive role and were of benefit to our society. Eventually, they evolved into that which they despised. “Big oil” has given much more money to the greens and they have to the skeptics. Yet, the hypocritical greens never miss an opportunity to tell us all just how evil” “big oil is!
It is not just global warming were talking about. An almost endless litany of scares and an ongoing propaganda campaign have been manufactured by the greens to control all aspects of our lives.
Politics makes strange bedfellows as the old saying goes. Bankers will sleep with anybody and so will the greens. When you go to bed with a whore you wake up with a whore. The only difference between the two is the possibility of making a little interest on your money with the banks. It has been estimated that the greens drain the American economy of 5% GDP on an annual basis.
As I’ve stated elsewhere on this website, when you reach into a taxpayers wallet they begin to pay attention. Next, politicians, who value their political self preservation above all else, will be forced to “take appropriate action”. They will throw anybody under the bus, including the greens.
What happens after that will depend on what course of action will increase the politicians chances for reelection. They will either quietly sweep this scandal under the rug or prosecute the offenders. This will be determined by the mood of the voters. Unfortunately, voters tend to have a very short memory.
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Forgive the typos. I am new to using Dragon Dictate.
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Not going to happen anytime soon Eddy.
The perps will get reassigned away from the public eye with a nice pension, we will be poorer and waiting for the next scam.
For the sceptic, the problem has changed. It is now the problem of how to change our political systems so that it does not happen again.
AGW must be the #1 scam for wasted taxpayer dollars. The question is whether the next upcoming scam wastes even more.
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They’ll never get my vote unless they prosecute. That and change the system so such a scam cannot happen again.
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The idea behind the carbon price was not a bad one for the Europeans in particular. They are densely populated, relatively rich and most have enough spare time to care about their environment. Up to 4 years ago many of them liked to see heavy industry reduce their output, or for that matter shut up shop, who needed them?
They could just have put a tax on carbon, but of course that would be political suicide for those needing to implement that, nobody wants to pay more tax. It would also do nothing to the output of the power generators, they would just pass it on to the consumer. By leaving it to the “market” they can wash their hands of it and keep on blaming the CO2 producers for not doing enough to lower their emissions, once it becomes a proper tax they can never wean themselves off the revenue and they can’t blame anyone for the cost but themselves.
By charging for carbon, and giving credits, in theory they give incentives to large fossil fuel users to find ways to use less fuel while achieving the same output. Of course at the price where it currently sits nobody is concerned and finding alternatives is more expensive then the charge. That is where the concern is. There is now talk in Europe of artificially raising the cost of carbon to 20 euro’s minimum for no other reason then to give companies the incentives to innovate. The problem right now is that with the economic situation there, and elsewhere, all that would do is innovate (read relocate) to other countries where there is no such thing. Europe can not afford those industries to move at the moment, back in the days of plenty the politicians never thought that ten thousand jobs here and there, even dirty jobs, would ever become so precious.
Yes, Europe has reduced fuel use quite a bit, no surprise, many of the heavy users are now producing in India and China, many go to Africa these days, either through their own plants or by contracting existing plants to produce the goods. What seems to surprise the EU is the level at which this happened but no politician, or banker, will ever say at the moment that the reduction in fuel use is due to relocation of the heavy users. That would be another form of political suicide. Because they all know that they need those jobs right now and their policies chased those jobs away.
Prime example at the moment is Poland being able to challenge the Union on the CO2 targets as it would cost too many jobs. Before 2008 that would have been unheard of.
The banking sector does gain with the carbon trade, of course, and that profit will be taxed so they still get something out of it. The politicians know this but for them it is the lesser of two evils and they can blame someone else for the costs and for not doing enough.
After all, that is what all politicians have got a MBaB degree in: Master in Blaming another Bugger.
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The IPCC fraud was designed to demonise carbon so these big banking interests could earn megabucks.
Hard luck, it’s failed.
All we need to do now is to ‘lynch’** the politicians who backed it.
** By lynch I dont mean hang by the neck until they’re dead. Instead I mean publicly to humiliate, a virtual lynching so the likes of Camoron [UK], O’Barmy [USA] and GeeLard [Oz] never rise again above running a whelk stall……
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Quoting Turnedoutnice:
” …Instead I mean publicly to humiliate, a virtual lynching … ”
Public declaration of stupidity?
Allegedly traditional Chines solution. You stand on a platform in a public place telling everyone how stupid you’ve been, usually wearing an appropriately designed hat. I concur.
Did I read somewhere that NAB have started closing their carbon trading offices?
They may all be amoral, but not all of them are daft.
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It is easy to predict the value of a “commodity” with absolutely no intrinsic value, such as, Carbon Credits. These manmade documents aren’t worth the paper they are printed on. Yet, there will always be suckers who buy them. The smart ones like the Maurice Strong’s and Al Gore’s who hype these pieces of crap into the stratosphere will be the first to dump them at their peak prices. And the unsuspecting public with green in their eyes will hold onto these bags of manure and ride them into the gutter.
Electric cars. Solar Energy. Wind Power. These are not alternative energies. These are energies invested which can never be returned. If the EROEI is < 1, it is unsustainable.
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The market is an utter and complete sham. The good being ‘traded’ has no intrinsic value in of itself to support the price it has been given. There is no ‘real’ demand from a free market, its all created out of forcing people to have to buy it by indirection. Further, governments seem very happy to create it out of thin air when needed, see our own carbon credit ‘multipliers’ for installing solar and wind…
The multipliers are particularly crazy and also indicates exactly what value the government places on them.. they know they are worthless over the long term.
I’m hopeful that what has happened in the US and now happening in Europe will occur here; the fundamentals of the market pretty much make it certain. Just keep pointing out the flaws to those who will listen and its doomed.
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Nothing short of a Royal Commission (after the next federal election) will sort out this mess. The guilty politicians, ‘climate scientists’, biased media etc. need to be exposed and prosecuted.
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Fully agree Patrick.
A Royal Commission is the only thing that could get to the bottom of this ongoing running sore of Global Warming.
The average voter is totally unaware of the financial, scientific and political damage that is being done to our society by the CAGW Industry.
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Appears to me that the restrictions placed on the response side of the ‘free market solution’ noise from politicians and their economic activists makes it crysal clear that they see us only as fodder toward their nightmare of a world government. [Taken us the best part of 11,000 years from just surviving as a species to achieving the living standard and choices we have now – at least in the non-totalitarian world – and they want to give it all back in the name of “the challenge of our time”]
In this country (Australia) we are not allowed to consider responding in any of several proven technology routes;
1 – Nuclear Power generation
2 – Fully develop our Hydro Power generation potential
3 – Smooth development of Combined Cycle Gas Turbine Power generation options (although less restriction than on the above)
4 – Need to continue our solid foundation of low cost coal powered generation (unburdened by rapacious governement costs) to allow development of such competitively priced alternatives.
I am struggling with how best to encourage the true liberals in the political system to communicate any such free market reponses to the electorate?
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[…] When is a free market solution *not* the answer? When it isn’t free. […]
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dogstar060763 –
some examples of so-called non-polluting players. by the looks of their website, Carbon Retirement has pretty much retired:
Carbon Retirement
http://www.carbonretirement.com/news-and-resources
2008: INTERVIEW: Carbon Retirement – Co-Founder Dan Lewer
How is the price calculated?
One of our key principles is to be transparent about where our customers’ money goes. The price we charge is based on the market price of EUAs. For customers using our website, we add an admin fee of 10% (which pays the company’s overheads) and a ‘spread fee’ of 5%. The spread fee covers the risk of the price moving upward between the order being made and Carbon Retirement purchasing EUAs. If the price goes down, we reserve the surplus for retirement of further EUAs. This breakdown is published on our website. For organisations that are thinking about retiring more than a couple of tonnes, the price would work differently…
Where do you buy EUAs from?
From an exchange, a market broker or a regulated participant in the market. EUAs are freely tradable between market participants, so the source of an EUA does not affect the environmental benefits of retiring it…
Where can I go to find out more about climate change and the EU Emission Trading Scheme?
For the trading scheme, I’d recommend the European Commission’s website. There’s also a straightforward overview on Carbon Retirement‘s site. There is a wealth of information about climate change out there. The BBC’s website is a pretty good place to start.
http://www.carbonoffsetsdaily.com/resources/carbonindustryinterviews/interview-carbon-retirement-co-founder-dan-lewer-445.htm
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Carbon Retirement’s co-founder was Jane Burston – check out her connections and how she’s moved on (second link):
Jane Burston
http://uk.linkedin.com/in/janeburston
6 March 2012: Eurekalert: NPL’s Jane Burston named Young Global Leader by World Economic Forum
Accolade will extend reach of Centre for Carbon Measurement and support Jane’s fight against climate change
The National Physical Laboratory’s (NPL) Jane Burston has been selected as a Young Global Leader by the World Economic Forum, an honour she will use to fight climate change by bringing international attention to the capabilities of the UK’s planned Centre for Carbon Measurement…
Jane was selected as a Young Global Leader because of her passion and commitment to making change happen. Jane joined NPL in January 2012 from Carbon Retirement, a social enterprise she co-founded that takes an innovative approach to carbon offsetting. Prior to this, Jane worked as an environmental consultant, including on climate change policy for Transport for London and the Mayor of London’s office, and to FTSE 100 businesses. She is a guest lecturer on carbon trading at Ashridge Business School, and in 2009 was a British Council Climate Change Ambassador.
http://www.eurekalert.org/pub_releases/2012-03/npl-njb030512.php
reminder:
Liberal Party: Greg Hunt
In 2002 he was appointed as President of the Australian Fulbright Association and was selected as one of 100 Global Leaders for Tomorrow for 2003 by the World Economic Forum.
In 2004, Greg was appointed the Parliamentary Secretary to the Minister for Environment and Heritage…
http://www.liberal.org.au/Abbott-Team/People/Greg-Hunt.aspx
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Greg Hunt better toughen up or i`ll set Angry Anderson onto him!!!
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a US equivalent to Carbon Retirement, with a hideous name, whose website also suggests they’re out of business:
Carbon Purging
Carbon Purging is a better way to offset your carbon footprint. Your purchase allows us to permanently retire CO2 pollution credits under your name into the Carbon Purging Trust and they will be added to our Emissions Bank. We purchase CO2 permits from RGGI and the EU ETS…
http://carbonpurging.com/
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Off Topic:
Just up at Bolts site, a rant worth watching.
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That is absolute gold. Not only because he is right on the money, but also because it clearly shows why Labor will be obliterated at the next Fed election.
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I wish there were more like him – I enjoyed that!
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And they’re off!!!
The first of the carbon cowboys is out of the gate and ready to rort the new tax that wasn’t to be under any government led by the ginja ninja:
http://au.news.yahoo.com/thewest/business/a/-/wa/13466362/co2-ready-for-carbon-trading/
I guess people working for these parasite companies are the new “green jobs” we were promised…
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Warning – understanding this comment requires a basic understanding of economics.
I am personally not against using market-based mechanisms to create a socially desirable outcome. However, I would maintain that issuing an ever-decreasing supply of carbon credits is not the way to decrease CO2 emissions as
1. Energy consumption is inelastic with respect to demand. Large changes in price lead to small changes in demand. This is due to there being no close substitutes to fossil fuels. Look at the huge fluctuations in the oil price to see the impact.
2. The carbon “market” is set up with political aims. It is far from economically efficient. It is susceptible to political lobbying from the energy consumers as well as those who run the markets.
3. There are 3 major groups of CO2 emitters – at least in Britain. First, the public sector (schools hospitals, government offices). They “pay” for their carbon credits from tax revenue. They are often over zealous (and thus not cost efficient) in applying reductions. Second, the retail sector (and other service sectors). The biggest of these is the supermarkets. They can pass the cost of carbon credits on to the consumers, as you cannot nip overseas for fresh supplies of meat, bread or frozen food. Third is manufacturing. In the UK a major part is oil refining – which although a major energy user can pass it onto the consumer. The traditional manufacturing which compete with non-EU businesses. Such business cannot pass the costs on. Energy intensive manufacturing this shuts down and moves abroad. Most importantly, (in the absence of easily available energy-saving investments) it is the energy consumers that cannot pass on the additional costs that are the “flex” in the system.
4. There is no evidence that carbon credits provide any additional incentive for increasing energy efficiency, over and above the high and volatile price of oil – except maybe in a few marginal cases.
We should remember different moral nature of structured markets from free markets. Bernard Mandeville in the 17th century (and Adam Smith in the 18th century) stated that in a free market people acting in their own self interest, end up serving the common good. Markets are a win-win situation. Using structured markets to achieve changes in behaviour gives economic actors a choice. Either endure a large economic loss, or a lesser loss and serve the common good. Problem is those imposing the schemes must have a clear idea that the common good is greater than the pain inflicted. They must also have the ability to prevent some profiting on the misery of the masses.
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Excellent post Manicbeancounter.
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I should have added, except for:
“I am personally not against using market-based mechanisms to create a socially desirable outcome.”
Which I suppose defines you as a social engineer. It also stimulates the question: socially desirable to whome?
Why not let the free market, which afterall is all of society (everyone), decide the optimal outcome, since, that outcome, by definition, will be the most socially desirable outcome because the free market is the free society. They are one and the same.
A free society arises from the free market – people entering into voluntary buying and selling decisions. It is not the otherway round!
But the rest of it was good – because it observes the simple economic truth that money taken from Peter and given to Paul does not increase net wealth.
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Manic, I am a free market girl to the end. But I think there are times when the free market (at least in the form of traded permits) is not the best solution.
COs is ubiquitous – therefore, this can never be a truly free market. There will always be exemptions. Who can bill the forests and seas? Because CO2 is everywhere, and mostly a natural molecule, it is most unsuited — can’t be audited or accounted for. We don’t even know where half the worlds carbon sinks are.
As I’ve said before, it’s not that there are loopholes in the market, it’s that the market IS a loophole.
It’s unenforceable, and prone to corruption at every single step. No point in this entire market is subject to any natural limit. The supply and demand are set entirely via government fiat.
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Joanne, I agree with your thoughts on CO2. I will use the layered approach of Wes George at 32., to show how are separate thoughts are in fact part of a bigger picture.
o The Human race cannot control CO2 on a global scale, because of the natural factors. But assuming this were possible we have two options. Stop the global economy (and forget the human suffering) or utilise economic theory to look at obtaining the maximum impact for the least cost. This is something the Stern Review claimed to have achieved. I tried to model this approach some time ago. Assuming this is the case
o Some neoclassical economic theorists came up with the idea of carbon markets. In the world of perfect competition and Walrasian equlibria, it is beguiling. By trading, the least cost / maximum impact solution is attained. But one needs to examine the stringent assumptions.
o This is where my analysis above comes in. In the EU (and possible Australia), different groups, facing widely different abilities to pass on costs, could make carbon markets inefficient. Rather than get the maximum gain for least cost, you could transfer emissions abroad, along with jobs. This particularly applies if a small minority CO2 emissions are covered by the carbon trading, whilst much bigger countries are rapidly increasing their emissions.
o Even if you get every nation in a room, and all sign up to this (many layers of issues here) and all are decent chaps, like we are Britain, adhering to agreements (have a look at the economic incentives given to members of cartels to see why this is not the case for most people) – then you still need some experts to run the market. As you state in above, Joanne, they have their own incentives, and will rig the structure for their profit, and for political appearances. Look up the Economics of Politics of Buchannan, Tullock and Niskanen to see theoretical underpinnings.
o Even then, have we the knowledge to gain an optimal outcome, allowing for non-perfect structures, and limited information? Read three papers by FA Hayek on knowledge (1937, 1945 & 1974) and you will realise that even with the most benign dictators running the carbon markets, they have insurmountable problems.
There a huge number of issues to overcome. Most of them are economic and political. So if the overwhelming evidence is forthcoming, the policy problems have just begun. It is when that you have overcome these issues that you can start to have confidence that CO2 mitigation policies will have a socially desirable outcome.
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“…Even then, have we the knowledge to gain an optimal outcome, allowing for non-perfect structures, and limited information? Read three papers by FA Hayek on knowledge (1937, 1945 & 1974) and you will realise that even with the most benign dictators running the carbon markets, they have insurmountable problems.”
Agreed. But why do you then insist on once again peddling this “socially desirable outcome” nonsense? Again, desireable to whom?
How is the mass transfer of wealth from consumers facing higher energy costs to wealthy landowners via the organised theft of renewables policies in the UK and elsewhere, any more or less “socially desireable” than the theft and redistribution from consumers to banksters via a rigged market in carbon permits?
Under what assumptions would any form of carbon emissions regulation be considered “socially acceptable”? Presumably, you’re going to invoke the discredited theory of CAGW? Well, if you do then best you cough-up/ show us/ cite some published real world data/ evidence to support it. Please, show and tell. We would really like to see some evidential support… but please, no models…
And no, there are no “huge issues” to overcome. Not in the sense that you mean at any rate. All that is really required is that the power of government to regulate (anything but certainly energy) be removed in totality. Ditto for associated bureaucrats and other assorted control freaks – including economists who delude themselves that aggregate models say ANYTHING meaningful about human society and markets.
What needs to happen is for markets and society to be left to operate FREELY without government interference. This is the only way to ensure a prosperous and free society or to use your words a “socially desirable outcome”. And the environment of course will benefit enormously too because private property rights (as a central tenet of free markets) will ensure that is the case – people with vested interests look after those vested interests – to the benfit of everyone (for more on this fundamental truth, search: ‘tragedy of the commons’).
And I think it also worth you expanding your reading list to include Hayek’s ‘The Road to Serfdom’ and von Mises ‘Socialism’. At a minimum.
So please, no more glib use of “socially desireable outcome” without telling us how you define this sinister phrase. Its use makes you sound like you might have aspirations to tell people how to live and generally order them around.
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Many moons ago, could have been last century, I read an appraisal of “pricing carbon” and when such measures would substantially lead to real reductions in the consumption of resources. The necessary price per tonne of CO2 was around that of a barrel of oil.
i.e. 4 to 5 times that what Gillard’s bringing in and 10 times higher than what the present cost in the EU.
The reason why it’s not that high is because there is no shortage of rope and plenty of trees and lamp posts from which to hang the promoters of such lunacy. Frog-boiling is more subtle. And achieves the same result: distribution of wealth from the many to the select, privileged few.
It’s no longer possible to accept that (e.g. the ALP) could simply be economically incompetent. Their objectives are obviously different to what the majority of voters expect. Prepare to welcome your feudal overlords.
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Great post Manic!
Let’s begin at the beginning. Something the carbon tax debate never did.
1. First it has to be demonstrated that it’s socially desirable to reduce CO2 emissions….
2. If we assume reducing CO2 emission is desirable we must consider whether the rate of technological evolution supplied by doing nothing.. by allowing natural competition in the free markets drive innovation is sufficient.
3. if we assume that the natural rate of technological evolution supplied by free market competition in is insufficient, then we must consider if regulatory intervention of some kind can accelerate the pace of technological evolution.
4. If we assume regulatory intervention can accelerate technological innovation, then we have to consider the unintended consequences of anti-CO2 policies – some examples of which Manic points out – might actually cause increased CO2 emissions by, say, pushing CO2 intensive industries to parts of the global that boost their economies by becoming CO2 tax-free havens.
That’s a hell of a lot of If’s and assumptions we’ve jumped over to get to where we are today!
I’m staying at #2, because higher CO2 levels are an uncontrolled global experiment that might have consequences we haven’t even thought of, AND that our current rate of constantly accelerating socio-technological evolution is powered entirely by the capitalist free market global system, which is obviously the worse economic system except for all the others, to misquote Churchill… Doing nothing more than insuring we remain a free and open society and economy is our best hope for all our problems, not just evolving towards a post-hydrocarbon-based economy.
The worse effect of a carbon tax is not the counterproductive market distortions, but the unquantifiable effect on human creativity and entrepreneurial innovation. It’s the things that won’t be invented, that won’t be researched that will die on the drawing board and never see the light of day that worry me.
Instead of spurring the creative and animal spirits on to bold, risk-fraught new paradigms in energy production and use, government over-regulation and intrusion has exactly the opposite effect, slowing socio-technological evolution.
This is a particularly obvious with subsidising alternative energy technologies that could not otherwise compete in the open market. Instead of innovating in the research lab, corporations and banks quickly learn to innovate in lobbying and various rent-seeking techniques. If you’re being compensated for your inefficiency, there is no incentive to evolve your technology to the next level. Solar and wind businesses reckon they don’t need more lab coats but more suits in Canberra. Our whole society is being corrupted by the rush for entitlements rather than the struggle to compete based on merit.
As Manicbeancounter points out, the moral nature of the free market is that every individual works for his or her own interests, is free to decide what that interest is, and is rewarded based upon merit.
In a command economy, the same forces occur, everyone works for their own interest, but instead of being free to chose what that interest is they’re given a restricted menu of pre-determined interests. Merit is replaced by entitlements.
The end result is it’s often not in the interest of an innovator to innovate or a producer to raise productivity because the rewards are tailored to fit the limited agenda of the governing technocratic elite. The logical fallacy of command economic is as old as Plato’s philosopher king theory of government. 3000 ‘smart’ people in a Soviet-era concrete block in Canberra are smarter than 23,000,000 Australian citizens. Those 3,000 smart people can design a better future on the back of a napkin… bloody hell, they can command the Gods of Climate! If only the 23,000,000 Aussies would just STFU and obediently pay higher taxes.
But here’s how government planned economics really works:
The famous example is the ambitious Soviet bicycle factory manager whose hard-working team gloriously exceeded the factory’s annual production quota one year. When the technocrats in Moscow reviewed his excellent performance they raised his factory’s quota. The next year the factory manager was careful not to exceed the new quota… That’s the story of Soviet decline in a nutshell.
Having learned nothing from history, Minister for Climate Change, Penny Wong, explained on the ABC in 2009 that’s exactly how the carbon credit scheme would work in Australia. Businesses will buy carbon credits to meet their carbon emission reduction targets and as they reach their targets they will be given new higher targets to reach. You can imagine the level of creativity that will spark, only not on the shop floor, but in the unctuous corridors of power and influence.
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Brilliantly put.
Your country needs you – and like-minded people – in parliament. Really.
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I agree. There is also something that always seems to get ‘missed’ with this massive central planning and spending – the law of unintended consequences…
Essentially the more you try to ‘manage’ (and I use that word loosely) an ill defined or worthless product in an ill defined and poorly regulated market – the more likely it will not work in the way you expected it to. People will find loop holes or mechanisms to better their own situation at the expense of others. Hence the carbon multiplier silliness where those who could afford to install solar and wind got not only a guaranteed rate of return on their systems (well not really guaranteed, that particular carpet got quickly rolled up once the costs came in), they also got a reduction in the capital cost base to boot trading away none existent credits.. Remember its your tax money (after overheads & admin costs) paying for this silliness..
The other rather silly thing with all of this, and for those who have bought into the whole solar power situation, is this – read the small print on when each distinct component goes out of warranty. The biggest single cost is usually the inverter, its usually warranted for a fraction of the time of the solar panels… Now combine that replacement cost with the fact solar tech is improving over time and getting cheaper in real terms – this means all those systems on roofs become effectively worthless within 10 years tops.. yes you will get power from them, but compare that to the real costs of operation and technology driven depreciation and you always end up loosing over the long term. You need to consider the whole sum…
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No. Requires you to have no idea. You genuinely think that:
I would have thought that businesses would look at all their costs and try and minimise them. Now either a price on carbon is a monstrous imposition that will send businesses broke, or it is a minor cost that they don’t worry about. Which is it guys?
Luckily the Australian scheme recognises emissions intensive trade exposed industries.
Let me make it perfectly clear what I think.
A carbon tax or trading scheme will not make a substantial difference to emissions at prices of ~$30 per tonne. It will have to get a lot higher than that to change the way energy is produced and consumed.
Any country acting alone is futile. Australia’s scheme is symbolic. We will not ramp up the price until the world joins in.
There will be some pain, and living standards will not improve as rapidly as they would without a cost on carbon. But it won’t be some descent into the dark ages either.
A price on carbon is much more efficient than Tony Abbott’s direct regulation approach.
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Johnnie, only an economic illiterate would imagine that mere symbolic sacrifices alter global energy technologies.
But if you’re into futile symbols, dude, why don’t you turn all your power off and live by the light of your bong. Oh, I see, you’re into forcing other people to pay for your symbolism!
Whatever happened to religious freedom???
We don’t worship at your church and shouldn’t be forced to tithe your God.
Got that?
Peace, mon!
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John demands:
Well JB, it must be both because as you say:
So today, your sneaky government implemented a tax it knew wouldn’t work. As you say it will have to be much higher, which is what we all said would happen once the carbon tax was made law.
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It is a monstrous imposition that will cause businesses unable to relocate elsewhere to fold and to fail one of two things happen:
1. government uses redirects taxpayers funds to prevent their failure and/or
2. their competitors in the rest of the world are forced to bear similar burdens
The second condition will NOT happen so whether businesses fail will depend entirely on condition 1.
Those businesses close to government (mostly large corporates) will succeed at the cost of smaller outfits – unless very large sums of other people’s money is directed at all businesses.
But of course, if that happens, consumers will be left with less money in their pockets to buy the products and services these businesses produce undermining the hare-brained scheme of larceny and redistribution from teh public at large to favoured interests.
And of course, as businesses fail, people lose their jobs necessitating the redistribution of even more taxpayers money in the form of welfare. Both the remaining taxpayers and the welfare recipients are now much more constrained in their purchasing power and will need to increasingly limit expenditure to the essentials. This will further pressure businesses already under stress, and on and on it goes… Eventually, a major preturbation (financial crisis, war, pandemic etc. etc.) will lead to systemic collapse as the resilience of the economy has been eroded…
I am of the opinion that for some of the crooks now in power, that is, in fact, a primary objective. To bring about the collapse of what remains of the free market capitalist economy – as a prelude to totalitarian control.
But what is certainly very clear John is that it is obvious you have no idea how businesses operate, not even a theoretical or cursory understanding of the basics. And for someone of your obvious advanced years, that’s shame, and, frankly, rather disturbing.
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The title of the piece is spot on Jo.
A few years ago, when KRudd and the ETS show were high on the agenda I worked as a risk analyst in a large corporate insurer. I was asked to provide input to a working group then developing business ideas around Labor’s proposed ETS. This insurer had very close ties to a state govt (it started its life as a state-owned insurer) and continued to employ a lot of people with close links to the state govt in non-technical executive positions. Without going into the gory details these people always insisted that the ETS always be referred to as a ‘market-based’ mechanism.
In keeping with my technical role in risk I drew the distinction bewteen free and unfree markets in respect of the types of sectoral and economy-wide risks the ETS could generate for the group. But these analsyes were not particularly welcomed and I was not asked to contribute material to the final written document – other than to edit the document (it contained no risk-related content). I lasted a little less thabn 6 months after this committeee concluded. I was then paid-off and I wasn’t unhappy to go.
The point I want to make though is that the corporatist mindset, in my experience, will go to some lengths to camouflage thier (anti-capitalist) intents even at the possible cost to the firms they supposedly represent…! No doubt, these companies feel assured that their govt backers will awlays keep them from the fate of the dinosaurs. I suspect the same attitudes are alive and well in the unfree banking sector too. And you can see the same tactics used by the global warming alarmists on science blogs, many of whom are, of course, cut from the very same cloth (ie. lovers of big coercive government). Climategate has though exposed their modus operandi for all to see.
I know that pointman above goes into this on his excellent blog.
And for the record, I didn’t seek employment with that insurance firm, I became, if you like, an involuntrary employee when the well managed and very professional firm that I did originally join was taken over in an M&A buy-out – just prior to the GFC. Andthis is a little-mentioned consequence of our unfree banking system: the tsunami of cheap credit that it spawned allowed badly managed corporations to take-over well managed firms. This will (it is) all come out in the wash of course – just as Von Mises told us…eventually.
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don’t know what his chances are, but i like the attitude:
19 April: Daily Telegraph: Alison McMeekin: Gold Coast City Council won’t pay the carbon tax if I am mayor, says Tom Tate
In a statement Mr Tate said the Queensland Treasury Corporation Credit Review of council reveals that ratepayers will “be slugged under the carbon tax introduced by the Gillard Government for our rubbish tip operations”.
“They want us to buy carbon credits and I just won’t let council do it,” Mr Tate said.
“The feds can go jump.” …
“Council’s own budget documents specifically identify an increase in electricity costs and the tax on additional carbon emissions from waste landfill activities in the financial forecast will hurt ratepayers’ hip pockets,” he said…
“Someone has got to stand up and say, ‘enough is enough’.”
Mr Tate called on other councils across Queensland and Australia to boycott the carbon tax.
http://www.heraldsun.com.au/money/money-matters/gold-coast-city-council-wont-pay-the-carbon-tax-if-i-am-mayor-says-tom-tate/story-fn312ws8-1226332838659
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19 April: Herald Sun: Terry McCrann: Carbon dollars to cut carbon
YOU really can’t make this stuff up. There’s Broadbent and Co gushing over what the $10 billion can do to save the planet from wicked carbon dioxide … And where is that $10 billion ultimately going to come from?
The tax revenue that flows indirectly and even directly from selling more and more coal and iron ore to China, to pump more and more CO2 into the atmosphere, utterly swamping any miserable cuts in Australia.
It was even more exquisite that all the Broadbent guff was bookended by the latest production figures from BHP Billiton and Rio Tinto, as if to emphasise this thumping reality.
In the latest three months alone, they produced 30 million tonnes of coal and an impressive 83 million tonnes of iron ore between them…
http://www.heraldsun.com.au/business/terry-mccranns-column/carbon-dollars-to-cut-carbon/story-e6frfig6-1226332141063
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don’t u love the “Some experienced market observers” bit:
18 April: Financial Times: Poles to fight carbon market price support
By Pilita Clark in London and Joshua Chaffin in Brussels
Poland is insisting there should not be any “administrative meddling” that would prop up prices in the European Union’s carbon market – the world’s largest – on the eve of a special meeting on the troubled Emissions Trading Scheme.
According to a paper prepared for the meeting, the Poles intend to fight off moves by other countries to tackle the collapse in the price of permits traded in the system. Instead, Warsaw is proposing steps that would in some cases depress the cost further…
In its paper for the meeting, Warsaw argues that the market’s woes simply reflect turmoil in the EU economy.
“We cannot judge effectiveness of the ETS by the price, just like we cannot judge the efficiency of windmills by their looks,” the paper says.
“Growth will return and the price will find its equilibrium again. No administrative meddling is needed or else we might create the impression that such measures are standard practice.”…
An adviser to Marcin Korolec, the Polish environment minister, told the Financial Times that other countries appeared to support Warsaw’s position, but he declined to say which ones…
Some experienced market observers believe that Poland’s objections can be addressed.
“You have to solve the Poland problem, and there are lots of ideas being kicked around about how you could do that,” said Alfred Evans, chief executive of Climate Change Capital, the London-based carbon project adviser and investment group just acquired by the US agriculture and food company Bunge.
One idea was a “coalition of the willing” – governments ready to take action that would help address the market’s problems without requiring action from Poland, he said.
Mr Evans added that he personally favoured deeper targets and thought the set-aside option too difficult and complex to implement…
Given the difficulty of finding a solution, EU officials acknowledged that they did not expect any concrete results to emerge from Thursday’s meeting. A formal proposal from the European Commission appears to be months away.
However, some observers saw a measure of progress in that the bloc was at least now acknowledging the market’s problems.
http://www.ft.com/intl/cms/s/0/a4f02d5e-8981-11e1-85af-00144feab49a.html#axzz1sRicMGah
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What does mild weather have to do with factory emissions? Not a damn thing. And “milder-than-normal weather”? My butt. I was looking at sheets of ice covering just about everything in Europe not more than a few weeks ago. The Danube froze over for supposedly the first time in decades. It has been f’ing freezing over there.
No, carbon credits are approaching the lower limit of their value – zero – because they have no marginal utility (an endless bid giving a constant marginal utility, thus a stable value), as the only real bid was that of the government. Hence why Deutsche Bank says “the only value in EUAs lies in their political optionality”. The ‘players’ are no longer convinced of a government bid.
Put it this way, would you bid endlessly, or at all, an ounce of charcoal or graphite that crumbles into dust; a mole of CO2 that you can’t even see & vanishes into thin air in an instant?
Or would you bid endlessly for something that lasts forever, even under the most trying of circumstances?
I am of course alluding to the quality theory of money. Of course government money has no quality either….
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IT’S A (fracking) GAS!
JMD
Perhaps there’s a God (with an ironic sense of humour) – and he/she ain’t “green” – afterall. How else to explain “fortuitous” emergence of vast quantities of coal-seam/shale-sourced gas globally at this precise point in anthropogenic-energy-usage history?
Carbon credits are – and will continue – to decline in “value”, as more market players factor in consequences of EU governments (however reluctantly) permitting exploration and development of this new resource.
From GWPF: The Independent newspaper wants all shale gas exploration halted, to save the planet. “A new age of shale gas holds the risk that the decarbonisation of the UK energy system, essential if we are to meet our demanding climate change targets, will be pushed back and back,” the paper declares in an editorial. “Mass use of shale gas would make these targets unattainable.” But two recent economic studies prove the opposite. The UK and Europe could meet their own carbon dioxide reduction targets by replacing dirty coal with cleaner gas and nuclear energy capacity. –Andrew Orlowski, The Register, 19 April 2012
Happy days!
Alice
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Your tags don’t work
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JMD – Can you send me more info? The tags work for me, so I can’t recreate the problem. I’m on Mozilla latest v. Is it just one tag, or all of them? Thanks, appreciate the help. Jo
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Can you look at the text in HTML & compare it to browser displayed text? It’s the paragraph tag that doesn’t seem to work. Maybe it just does it automatically.
paragraph
strong
italics
h3
h4
You know I am beginning to think that no one gives a s**t about quality & marginal utility & money. Shame, unless people make the effort understand it thenAll the riches that we boast consists in scraps of paper…
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And that was not how it was supposed to come out. Maybe I put the blockquote in the wrong spot. I can’t go back to look at it.
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Dear Joanne,
It is such a pleasure to read your blogs.
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Speaking of “free markets” here is a stary-eyed AYCC rep at the ABC spruiking the joys of the “market solution” to Australia’s heinous crime of GHG emisisons:
http://www.abc.net.au/environment/articles/2012/04/19/3480456.htm
My response, which is in line with today’s blog (I know, shock, horror, Bulldust is ON TOPIC!):
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To compensate for being startlingly on topic last post I shall stray again … this Android app came to my attention because of it’s claims to be able to power phones through the light sensor!!1!1!1*:
https://play.google.com/store/apps/details?id=com.szlab.solarcharger
* Yes, of course it doesn’t work, but some of the user comments are priceless. I was p1ssing myself laughing.
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Posted this at Bolt’s Blog today re- Lateline/Joe Hockey:
The most disturbing thing Joe said was that Australian workers are expected to work to 67 to fund the Europeans to continue to retire at 62 and earlier.
Lateline 18/4/2012:
Blah blah blah, yada yada yada. rhubarb, rhubarb rhubarb…
I fear it is too late.
The carbon tax & trade for EU is just another funding scam.
Thanks JuLiar..
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Yeah, Jones kept trying to ambush Joe.
No surprises there of course; Jones’s ‘entitlement’, his generous ABC salary, is paid by the taxpayer.
No conflict of interest / sarc.
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Jones is one of the most annoying TheirABC people, let’s hope that PM Abbott arranges for an audit and assessment of the need for ABC/SBS to be taxpayer owned and funded and if we would be better served if they were rationalised by merger or sold to the private sector.
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Not sure if this has been posted before, but I just wanted to share this news.
Secret negotiations are currently in progress between the Gillard gov and power station companies to close down Hazelwood, Energy Brix, Yallourn, Playford and Collinsville power stations by June 30 this year.
Source – The Climate Spectator.
No wonder Bob Brown was in a hurry to get out!
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Sorry….the negotiations are to be completed by June 30 this year….not the power stations closing down!
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I don’t know whether to laugh or cry … trees are apparently not a renewable resource:
http://aycc.org.au/2012/03/19/oakeshott-motion-we-won/
AYCC is a shameless advocacy group devoid of any semblance of logical thought.
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Don’t look too closely at these organisations or you fall down the rabbit hole of astroturfing … who sponsors AYCC … here’s just a few examples:
Purves Environmental Fund: http://www.purvesenvirofund.org.au/
Shaper Group: http://www.shapergroup.com/about/
The Climate institute: http://www.climateinstitute.org.au/climate-partners
ASU Queensland: http://www.together.org.au/
.. not to mention Government depsrtments in NSW, VIC, QLD, SA and universities such as UNSW, ANU, University of Adelaide, Flinders, Murdoch … and wait, what’s that? The USA Embassy? Maybe Clive Palmer wasn’t all that crazy about saying the CIA was involved…
You can find all their main sponsors on the last two pages of their annual report:
http://aycc.org.au/wp-content/uploads/2008/09/2011-Annual-Report-.pdf
Damn we skeptics are rank amateurs compared to these guys…
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For anyone who might be interested – from the ‘Acting Man’ (Austrian) blog (and because I know that Gee Aye insists on at least one Nazi/ Hitler reference per thread):
http://www.acting-man.com/?p=16412#more-16412
“France: Socialist Radicals Overtake Hollande on the Left
German media inform us that ‘the euro crisis has proved to be an unexpected boon for France’s communists’. The radical left, believed to be dead for good after the collapse and bankruptcy of the unworkable Soviet system, is resurgent in France. Never mind that its economic views, long ago thoroughly debunked by great economists like Ludwig von Mises and Friedrich Hayek, remain the same confused ‘garbled Ricardianism’ (Mises) they have been since the times of Marx.
This goes to show that the economic crisis – which is a result of interventionist policy, the overstretching of credit expansion by the fractionally reserved banking system aided and abetted by the central banks and overspending by irresponsible governments – gives rise to political radicalism, thus opening the door for our statism-loving globalist masters to institute an ever growing web of regulations, intervention and centralization, so to speak on ‘public demand’.
As we have pointed out before, a policy’s populist appeal is unfortunately not proof of its correctness. If that were the case, we would have to state that Hitler’s rise to power must have been a ‘good thing’ on account of the fact that he got the majority of the vote in 1933.
….
Just to give you an idea of what types of policies Melenchon (who is referred to as ‘France’s Chavez’ in the press) supports in comparison to the somewhat less radical Hollande:
Hollande wants to tax ‘excessive income’ at a rate of 75% for incomes exceeding € 1 million. No such half-measures for Melenchon. He would set the tax rate at 100% for all incomes exceeding € 350,000! Now that would do wonders for entrepreneurial incentive.
Hollande wants to ‘slightly raise the minimum wage’ – Melenchon talks about raising it from € 1,400 to €1,800 in one fell swoop. This would further entrench the already extremely high institutional unemployment in France, which in turn would ironically drive even more people to support the political radicals on both left and right.
Although France was once a bastion of enlightened liberal economic thought – we only have to think about Turgot, Bastiat and de Molinari for example – it is today well-known for its disdain of free markets and admiration of the failed system of socialism. Even allegedly ‘conservative’ politicians like Sarkozy are often conspicuous for their condemnation of the institutions of the market economy.
One despairs thinking about it. There is today not a single person in the intellectual leadership of France that we can think of that supports free market capitalism. It is no wonder that the masses erroneously hold that everything that is bad in France today must be blamed on the market – their intellectual and political leaders tell them nothing else! Since France together with Germany forms the ‘core’ of the European Union, it seems that the inexorable decline of Western civilization is almost preordained. The socialists will leave nothing but scorched earth and will turn the countries in which they take power into ‘golden cages’ where all innovation ceases and people live dreary, egalitarian lives that offer no chance of advancement or betterment. Eventually the capitalist production structure will crumble to dust, as more and more entrepreneurs simply ‘go Galt’. “
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wow… I only write to suggest that no one set an agenda based on my rantings. My poor children have to deal with this, but not the rest of you.
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Gee Aye – it’s a pleasure to have you drop by (I mean that genuinely). I would like to read more of youru thoughts. We may not agree but I respect your obvious intellect.
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Interesting developments on the continent, Andrew.
I guess if you think about it, it’s not as counterintuitive that Eurozone financial chaos would give the communists a leg up. The French have long shown they don’t have a clue as a nation how economics work, so why should they suddenly wise-up in the midst of a very confusing situation? What the communists really represent is force and totalitarianism. Command economics can’t be separated from authoritarianism… how else can they appropriate property from people?
As for the other extreme of totalitarianism, that of the fascists, I really have a hard time discerning a substantive difference between Nazis and Communists other than points of philosophical and cultural fashion sense. Both believe in economics managed from the central party committee. Both hate the bourgeoise equally, if for slightly different reasons. And both systems result in a state machine that crushes individual human aspiration completely.
The enemies of political moderation and rationalism are far more powerful in most parts of the world then we in the Anglosphere have ever experienced at home. Of course, that’s a truism, but one we seem to easily forget when the ABC or SBS swoons admiringly over foreign cultural traditions.
In the Weimar Republic, the Nazi and Communists were archenemies, fighting fierce street battles. At the same time they each considered the other as the most fertile recruiting grounds for new converts. The bourgeoise and their various moderate christian and democratic socialist parties were rhetorically stuck in the dead-zone between the two extremes, unable to make their arguments heard. This could easily happen again in the failing states of Europe, just as it has in Egypt after the libertarian optimism of the Arab Spring boiled away leaving only varieties of Islamofascism to fight it out for ultimate control. I’m sure the Salifists and the Muslim Brotherhood imagine their political difference are terribly important too.
*
Btw, I like Gee Aye’s riddles too. 😉 It reeks of groupthink that Gee gets thumbs down for just showing up…
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Yes – the French are mysterious lot aren’t they… Like you, I have tended to view the variants of authoritarianism into the catch-all basket ‘socialism’. I felt somewhat secure in doing so because von Mises himslef considered that there were essentially only two economic systems based on whether the means of production were in private or state hands: free market capitalism and socialism. But of course, as you imply, this isn’t really good enough as there are indeed important difference between fascism (corporatism) and communism – not to mention religious forms of authoritarianism perhaps not even concerned with economic production at all… Thankfully, Doug casey has provided quite a convincing argument (at least to me) of some the key differences – at least for the main forms as part of a broader view of what it is that sets the political elite apart from the rest of us:
http://lewrockwell.com/casey/casey118.html
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Wes, some might think that your last paragraph indicates that I have groomed you well. If they look into the past they’ll see I’ve been mightally annoyed by some of your statements and you mine – and this is unresolved. In short we have differences with how science works. But that is not now.
no riddles as the above post really just demonstrates a lack of clarity. I was glibly replying that Andrew need not include a reference to Nazi’s as I’d made no logical reason for him to do so (i.e. an “agenda based on my rantings”). Thinking about this though I like the idea that every thread, no matter what it is about, has to have a response where someone includes a detail (e.g. Nazis) but tries to keep the reference on topic.
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(NOTE: Where I mention CC here, this stands for Carbon Credits, done like this for ease of writing)
This is iniquitous on so many fronts that the correct thing to say with respect to this is just where do you start?
Note how wherever any ETS has been introduced to place a cost on those CO2 emissions, it is already being manipulated, and often I have said that this is only about the money, but this detailed here by Joanne, and what WILL happen here in Oz only proves this statement conclusively.
Note first up how the current Labor Govt has poisoned the well so to speak, by introducing a fixed price of $23 per tonne, rising in the second year, and then also the third before moving to an ETS, where CC auctioning will be carried out. Labor is going to an election in late 2013, so for year one, and year two, they get the massive income based on that $23, and even harbouring vain hope that they might be re-elected, they will get one more year out of it. However, if they get thrown out, then rolling back this 18/19 pieces of complex and interwoven legislation, then after two years of
bribescompensation, people will lose that compensation if it is rolled back, either that or an incoming Government will have to find huge amounts to keep that package in place, hence a disgruntled electorate. And anyway, we are told this is not a bribe because after all, the money is to go towards increased electricity costs isn’t it? It will be eaten away by circumstance anyway, so after three years you will end up at square one anyway.Then, let’s move to the ETS then, and the cost immediately comes back to what is being paid elsewhere in the World, and CC will be traded at auction.
Day One Year One. An emitting entity will be issued CC in the amount of their emissions based upon their emissions at the time it starts, eg, their total of the year just passed, this current year. That total cost will be their emissions in tonnes X the $23. Immediately, the bottom falls out of the cost, because there are so many of them . Here, if anybody is stupid enough to sell, the entrepreneurs will step in to buy low, and that probably goes for some of the Union (and others funds also, probably) Retirement funds as will be recommended by their Labor backers and the Party as well. The first few yearly auctions will see not many CC changing hands as emitters feel out the market so to speak.
Some emitters can offset their emissions by investing in non Oz CC and this is legislated as well, being the CDM. (Clean Development Mechanism) However, these CDM CC are based on the cost in the originating Country, and the cost will then be converted to AUD, but minus a percentage so that there is incentive to trade Oz only credits. Here, with those non Oz CC, it is cost based, and not CC based as those non Oz CC are considerably less in cost that the Oz CC. The investing entity has to keep detailed records of the non Oz CC date of purchase, cost in AUD, minus percentage. These CC only count on a cost basis, so again detailed records must be kept as to the total CC, where they came from and when they were bought, Oz an also non Oz. In effect an emitting entity can invest in approved non Oz developments and get the CC but they will be considerably less in value than Oz CC, and because of that, they will be virtually worthless at auction, and if they are traded, then again all record keeping with respect to everything about those non Oz CC will need to be detailed.
Enter the last auction of the year. The price will skyrocket as sellers realise that some emitting entities will be screaming for CC. This of itself works in the Govt’s favour. If the emitting entity exceeds its year start total, then they have to purchase make up CC at that last auction, and then on top of that pay a fine for exceeding their CC total, that amount being 1.5 times the excess emissions at that final auction price, and then have that excess deducted from their net year’s emissions total.
Now Day One year two, it all starts again, only this time the emitting entities emissions total is lowered. The auctions will again be as per year one, and again that last auction will see prices skyrocket, benefitting, well, some people anyway.
Now an emitting entity that is a power plant is locked into a Supply of power contract, so they have to supply the power they always have. Also, the Govt has enshrined in that legislation what they call ‘Security of Supply’, again ensuring those plants keep producing what they always have. So now the lowered cap means that emissions will not lower at all. All that happens is the make up CC is greater, the excess in fines is greater and the following years cap is lowered even further than it would have been anyway.
Note how all this has nothing whatsoever to do with lowering emissions. It’s just to ensure larger Govt income and better manipulation of the market, especially at that last auction of the year.
This CC market will be manipulated by everyone and foremost among them will be the Government. The loser will be the emitting entity, because they are bound by the legislation that all they can pass on is the normal yearly emissions cost, and not the excess or the fines, and each year their cap is lowered.
As you can see in Joanne’s Post, even if emissions do fall, which, after all is the intent of the ETs, then it seems the bottom falls even further out of the market. The whole thing is specifically designed for the scheme to actually stay at the maximum emissions.
This is not a Market Based Mechanism. It’s a money generating device based on gas, not even something tangible, just bits of paper.
It’s not about the environment. It IS just about the money.
Tony.
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Sure Tony, money is the one thing you simply cannot have to much of. It IS just about the money, always.
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As my twin* said in iRobot ‘I told you so, just doesn’t cut it’ or something close to that.
Oh and the 2 greatest money ideas in the fast few decades the Euro and Carbon credits, the world really is run by a bunch of morons.
*I look like Will Smith, without the looks.
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Today in Perth, our Prime Minister, The Red Dalek, has shown her cards…
and she has a barren hand….
God (or Gary Ablett JR) help us!
The Pm is a disgrace and does not see the winds of change that are about to reap over her house of ill-repute cards…
Bring it on Jo Nova!!
You and our ilk are a part of a new phenomenon, Common sense!
We need common sense, just like Ben Cousins or Penny Wong…./.sarc
Maybe in a new Govt, you can apply for a Govt. Grant on The Scam Jo??
Keep up the good work cobbers…:)
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> our Prime Minister, The Red Dalek
FOR THE GLORY OF THE RED DALEK RACE,
I! WILL! LEAD! THE WORLD! ON! CARBON! REDUCTION!
BACK-STAB-TEAM-MATE! BACK-STAB-TEAM-MATE!
PROB-LEM-IN-FLATE! PROB-LEM-IN-FLATE!
IN-DOC-TRIN-ATE! IN-DOC-TRIN-ATE!
BIG-TAX-CRE-ATE! BIG-TAX-CRE-ATE!
LA-BOR-DEAD-WEIGHT! LA-BOR-DEAD-WEIGHT!
Good heavens! You’re right!
W’ll have to MacGuyver the Internet into a giant sonic screwdriver, or we’re finished.
It’s a stickier situation than the time Sir Sticky the Stick Insect got stuck on a sticky bun!
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Bulldust apologises above for being off topic, it seems I’m also off topic most of the time and this is no different.
In a speech to the Rural Press Club of Victoria Barnaby Joyce goes to town on Green Tape and the bloody stupidity going on in this once great country..
Some selected outtakes.
and
Examples include
I also like how he concluded
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A link to Barnaby’s speech can be found here.
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Long live Barnaby…
I will always remember his famous quote….
` They did`nt invent the internal combustion engine by putting a Carbon Tax on Horses…!! `
Bwahahahahahaaa…
Long live Barnaby!
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Great illustration of who loaned Greece their bailout cash, and yes, the Deutsche Bank is involved.
http://demonocracy.info/infographics/eu/debt_greek/debt_greek.html
Also, a Great illustration of the amount of dodgy derivatives money washing about the major USA banks:
http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html
When I say “Great” there I mean “Great” in the same sense as “The Great War of 1914”. 🙁
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