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Collapsing Carbon Market Backfires February 23, 2009

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Collapsing Carbon Market Backfires

Posted on ICECAP

By Julian Glover, UK Guardian

‘Roll up for the great pollution fire sale, the ultimate chance to wreck the climate on the cheap. You sir, over there, from the power company – look at this lovely tonne of freshly made, sulphur-rich carbon dioxide. Last summer it cost an eyewatering 31 vpounds to throw up your smokestack, but in our give-away global recession sale, that’s been slashed to a crazy 8.20 pounds. Dump plans for the wind turbine! Compare our offer with costly solar energy! At this low, low price you can’t afford not to burn coal!”

Set up to price pollution out of existence, carbon trading is pricing it back in. Europe’s carbon markets are in collapse. Yet the hiss of escaping gas is almost inaudible. There’s no big news headline, nothing sensational for TV viewers to watch; no queues outside banks or missing Texan showmen. You can’t see or hear a market for a pollutant tumble. But at stake is what was supposed to be a central lever in the world’s effort to turn back climate change. Intended to price fossil fuels out of the market, the system is instead turning them into the rational economic choice.

That there exists something called carbon trading is about all that most people know. A few know, too, that Europe has created carbon exchanges, and traders who buy and sell. Few but the professionals, however, know that this market is now failing in its purpose: to edge up the cost of emitting CO2. The theory sounded fine in the boom years, back when Nicholas Stern described climate change as “the biggest market failure in history” – a market failure to which carbon trading was meant to be a market solution. Instead, it’s bolstering the business case for fossil fuels.

Understanding why is easy. A year ago European governments allocated a limited number of carbon emission permits to their big polluters. Businesses that reduce pollution are allowed to sell spare permits to ones that need more. As demand outstrips this capped supply, and the price of permits rises, an incentive grows to invest in green energy. Why buy costly permits to keep a coal plant running when you can put the cash into clean power instead?

All this only works as the carbon price lifts. A lot of the blame lies with governments that signed up to carbon trading as a neat idea, but then indulged polluters with luxurious quantities of permits. The excuse was that growth would soon see them bumping against the ceiling.

Instead, exchanges are in meltdown: a tonne of carbon has dropped to about 8 pounds, down from last year’s summer peak of 31 pounds and far below the 30-45 pounds range at which renewables can compete with fossil fuels.

The lesson of the carbon slump, like the credit crunch, is that markets can be a conduit, but not a substitute, for political will. They only work when properly primed and regulated. Europe hoped that the mere creation of a carbon market would drive everyone away from fossil fuels. It forgot that demand had to outstrip supply, and that if growth stops, demand drops too.

There is not much time to rescue the system. Carbon trading remains at the heart of the international response to climate change. Obama backs what Americans call cap and trade. Australia wants to try the same thing. It should be at the heart of a deal at the Copenhagen summit this winter. But both are hesitating, given Europe’s mess.

The market must be unashamedly rigged to force supply below demand. The obvious way would be to cut the number of permits in circulation, but in a recession no government will be brave enough to do that. And private initiatives such as Sandbag, which encourages individuals to buy and lock away permits, can exert little pressure on price in a market awash with them.

Europe can choke off tomorrow’s supply, however, without hitting business today. First the EU must stop importing permits from countries such as Russia – a bonus for a paper transaction. No one really believes that 15m tonnes of imported permits will not still be emitted by a steelworks somewhere east of Novosibirsk. Second, it must publish plans to crack down on the surplus of permits when the recession is over. Warnings of famine ahead, when the scheme enters its third stage in 2012, would raise prices now, if believed. Like medieval pardoners handing out unlimited indulgences, governments have created a glut. Reformation must follow. Wanted – a modern Martin Luther to nail a shaming truth to industry’s door: Europe’s whizz-bang carbon market is turning sub-prime. Read story here.

Mining chief warns on ETS, IR and jobs January 25, 2009

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Mining chief warns on ETS, IR and jobs

AC | January 25 2009

Mitch Hooke

Minerals Council of Australia chief executive Mitchell “Mitch” Hooke said there were no prizes for “hairy-chested leadership” on emissions trading and the Government’s policies need to be better aligned to the rest of the world and to the capabilities of technology.

If the Government ignores this, the ETS cost will flow through as a tax on the bottom line and will mean a loss of jobs, he told ABC Melbourne radio on Friday.

“You cannot be in the green if you’re not in the black,” he said. “And if the black is starting to look red then there will be a loss and it will go to jobs. It’s as simple as that.”

Read the rest here

The Rich and Famous and Carbon Offsets January 24, 2009

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The Rich and Famous and Carbon Offsets

From Hawaii Reporter, January 22, 2009

It’s OK to have a carbon footprint if you pay enough. You do this by buying carbon offsets. These are used by politicians, environmentalists, movie stars, athletes, and others to claim the impact of their high-consumption lifestyles on the environment can be canceled out by paying someone else to invest in carbon-reducing initiatives, reports Lorrie Goldstein.Many famous people who are for sustainability and against global warming live in many very big houses, drive many very big cars, and fly in private jets. If you travel frequently by air, even on commercial flights, you can’t escape having a huge carbon footprint. Yet many of the most vocal advocates of cutting emissions—politicians, entertainers, environmentalists, journalists, scientists—are continually jetting off to campaign events and conferences and workshops. Are they going to change the way they operate? If not, how are they going to persuade anyone else to cut back emissions, asks John Tierney.

The World Economic Forum in Davos, Switzerland, was ‘carbon neutral,’ despite all the folks flying to attend, because in large part, people donated money to third world countries to plant trees or build hydroelectric dams for electricity.

The Live Earth concerts held in 2007 created a huge carbon footprint on the globe in the name of climate preservation; an estimated 7,000 tons of carbon dioxide emissions. This does not include the private jets of all the celebrities who attended or the thousands of people who drove their cars to each concert. An official volume, The Live Earth Global Warming Survival Handbook, presents 77 ‘essential skills for stopping climate change.’ Here are some guidelines from the book: “Let’s say that despite your best efforts, you still have to fly to your best friend’s wedding.

You’re dumping 3,000 pounds of carbon dioxide into the atmosphere, and you’re wracked with guilt about your contribution to global warming. Relax, you can throw money at the problem. Go online, find a company that sells clean energy credits, and buy enough to make up for the greenhouse gases your trip created.” The book goes on to state that you must choose your offsets carefully and points out that trains are the most ecologically low-impact way to cover long distances. How many celebrities take Amtrak? And speaking of celebrities and their eco-friendliness, let’s look at a few.

Celebrities

Al Gore, academy award winner and Nobel Peace Prize recipient, has to be high up on the list. Bruce Nussbaum notes, “Gore deserves a gold statue for hypocrisy. Gore’s mansion, (20-rooms, eight-bathrooms) located in Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service (NES). The average household in American consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh—more than 20 times the national average. Last August alone, Gore burned through 22,619 kWh—guzzling more than twice the electricity in one month than an average American family uses in an entire year. Gore’s extravagant energy use does not stop at his electric bill. Natural gas bills for Gore’s mansion and guest house averaged $1,080 per month last year. In total, Gore paid nearly $30,000 in combined electricity and natural gas bills for his Nashville estate in 2006.”

Like a good citizen, Gore buys carbon offsets to assuage his high energy lifestyle, and this is good. But here’s the rub. He buys his carbon offsets through Generation Investment Management, a company he co-founded and serves as chairman. Through this company, he and others pay for offsets. The firm invests the money in solar, wind and other projects that reduce energy consumption around the globe. As co-founder and chairman of the firm, Gore presumably draws an income or will make money as its investments prosper. In other words, he ‘buys’ his ‘carbon offsets’ from himself, through a transaction designed to boost his own investments and return a profit to himself.

Madonna, who was the main attraction at the London Live Earth concert owns a collection of fuel-guzzling cars, including a Mercedes Maybach, two Range Rovers, Audi A8s and a Mini Cooper S. She flies everywhere in her private jet and her Confessions tour produced 440 tons of carbon dioxide in four months last year. This was just the flights between the countries, not taking into account the truckloads of equipment needed, the power to stage such a show and the transport of all the thousands of fans getting to the gigs.

John Travolta says, “Everyone can do their bit. Global warming is a very valid issue—we have to think about alternative methods of fuel.” Travolta once starred in a movie about bringing industrial polluters to justice. But in real life he has probably the biggest carbon footprint of any Hollywood star. He parks his personal Boeing 707 on his front lawn—next to his three Gulfstream jets and a Lear jet. Rather appropriately, he has called his home Jumboair.’

The Red Hot Chili Peppers produced 220 tons of carbon dioxide with their private jet alone over six months on their last world tour which was 42 dates.

All this prompts Ginny Buckley and Max Flint to ask, “Is the hot air emitted by celebrities when they spout ecological platitudes a greenhouse gas?”

Enron and Lehman Brothers

There’s big money to be made in the carbon business. Enron and Lehman Brothers are two examples. Ken Lay became a celebrated corporate executive praised for his ‘21st century’ business visions. But Enron’s internal memos, leaked to reporters during its bankruptcy scandal, revealed other motivations. Christine MacDonald in her book, Green, Inc., notes that Lay had two meetings with President Bill Clinton and Vice-President Al Gore on a treaty capping carbon emissions. An internal Enron memo predicted this would ‘do more to promote Enron’s business than almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States.’ MacDonald adds, “Enron also had plans for using its support among environmentalists, who cooed over Lay.”

Lehman Brothers was at the forefront of the vast trade created by the new worldwide regulatory system to ‘fight climate change’ by curbing emissions of carbon dioxide. Jane Orient notes, “In 2007 they released a long and highly publicized report about climate change in which they preached about decarbonization, trying to make their investors keep getting high profits from the Kyoto carbon trade scheme and the support of huge public subventions. They recommended to their investors what they considered a central value of the carbon ton 50 years into the future. All of this of course, with the applause of the usual choir of politicians, the entire media, and the Greens.”

Thousands of green militants have been using the Lehman report as a proof of global warming and impending chaos. The report is the basis for policies on climate change in Spain, Argentina, and several other countries, it is used by economy professors playing climatologists, and by newspaper editorialists. Yet in spite of their ability to predict the climate 50-100 years ahead, they couldn’t predict their own bankruptcy.

http://www.hawaiireporter.com/story.aspx?46b4a943-c45b-4e00-8737-e26cd39edae7

Another Tax and More Politics: The ETS Proposed for Australia December 12, 2008

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Another Tax and More Politics: The ETS Proposed for Australia

By Jennifer Marohasy, December 11, 2008

I am the Chair of The Australian Environment Foundation and we are planning an Internet campaign to oppose the Emissions Trading Scheme (ETS) proposed for Australia on the basis:

1.  An ETS will not change the global temperature;

2.  Will force many clean and green Australian industries overseas; and

3.  Will make Australians poorer; while it is generally richer, not poorer nations that are better able to protect their natural environment.

We have a fundraising target of A$30,000 and already we have already raised just over $11,000 from donations.  So we need another A$19,000.

The campaign website will be designed to help build a large online community; providing a place for action as well as information.  Those who log on will be able to source information quickly as well as find their local MP so they can send him/her a message.

The website will be designed so that more than one campaign can be running at a time – and old campaigns can be archived.  The campaign opposing the ETS will be just the first.  The Australian Environment Foundation wants to be able to take a stand, and importantly help its members and supporters be heard, when decisions are being made against the weight of evidence.

So far donations have ranged from $25 to $2,000.   Please make a contribution.

If you can make a financial contribution, please go to our website and donate through the PayPal facility using your credit card. http://www.aefweb.info/ .

If you prefer to use Internet banking: Australian Environment Foundation, BSB No:  013 308 Account No: 4978 00416.

Alternatively, send a cheque to the Australian Environment Foundation, PO Box 274, Deakin West, ACT 2600.

There is nothing honest or clever about the proposed Emissions Trading Scheme.  It is just another tax and more politics.

http://jennifermarohasy.com/blog/2008/12/another-tax-and-more-politics-the-ets-proposed-for-australia

HOW ENRON ORIGINATED THE EMISSIONS TRADING SCAM November 29, 2008

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HOW ENRON ORIGINATED THE EMISSIONS TRADING SCAM

From The New Zealand Climate Science Coalition

HOW ENRON ORIGINATED THE EMISSIONS TRADING SCAM “Horner’s argument is that we are getting a one-sided discussion of climate change because most media outlets, politicians, activists and a substantial section of big business have – in a variety of ways – got an interest in keeping it that way. He tells me: ‘This affirms a worldview of many people: “Man is wretched, an agent of doom”; “There’s just about enough of [the moral people] and way too many of everyone else”; “Markets are horrible and the state needs to be much bigger”; “Development is terrible”. All of those movements find refuge in the global warming industry.’  – Review of Christopher Horner’s book “Red Hot Lies”.  LINK

Climate madness from Rudd & Wong November 29, 2008

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Climate madness from Rudd & Wong

From Australian Climate Madness, November 28, 2008

That’s right, they just carry on regardless, brushing the observations and the science aside in their pointless quest to “tackle climate change” whilst at the same time committing economic suicide. Krudd and Co are preparing to release the white paper on Australia’s ETS, or, if you wish to use the government’s name for it (complete with two errors in four words), the Carbon* Pollution† Reduction Scheme…

The global financial situation has heightened the importance of providing business certainty on the scheme,” Senator Wong said in a statement.

The economy is already weakened, and the ETS will only make it worse. She just stops short of using the dreaded “D” word about the Opposition, however:

Opposition calls to delay carbon trading were undermining business certainty and were out of step with community attitudes.

“The opposition is looking for any excuse to delay action on climate change, but Australians understand that the longer we wait, the more it will cost us,” Senator Wong said.

Once such “excuse” possibly being the fact that it will make not one iota of difference to global climate even if CO2 is a driver of temperature, which, given present cooling trends, is looking less and less likely.

Pure climate madness.

* Carbon Dioxide ain’t Carbon
For the last time, it’s NOT POLLUTION

Read it here.

http://australianclimatemadness.blogspot.com/2008/11/climate-madness-from-rudd-wong.html

$600 million Kyoto slug – thanks, Kevin November 17, 2008

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$600 million Kyoto slug – thanks, Kevin

From the Australian Conservative, November 17, 2008

Australian Conservative has been warning that, based on the New Zealand experience, Australia was being set up for a massive bill because PM Kevin Rudd signed the Kyoto Protocol.

Mark Henderson looked at the potential cost to Australia for signing something that won’t achieve anything.

Today comes this news from Bloomberg:

Twenty nations including Japan, Italy and Australia may be releasing more greenhouse-gas pollution than they agreed to under the Kyoto treaty to curb global warming.

Australia, which only ratified Kyoto in 2007, will need credits to cover 20.6 million tons a year, at an estimated annual cost of 325 million euros, based on the CER price. Japan, which New Carbon Finance predicts will need 587 million credits, says new energy-efficiency policies will help the nation meet its target.

That’s a price of more than $600 million.

Yet another example of the hard-earned government surplus built up by messers Howard and Costello being frittered away by the Australian Labor Party as they spend like drunken sailors.

Look where 13 years of ALP rule in New South Wales has left the once-premier state. The basket case of Australia.

http://australianconservative.com/main-site/2008/11/our-600-million-kyoto-slug-%E2%80%93-thanks-kevin

The tide is finally turning against global warming cultists November 10, 2008

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The tide is finally turning against global warming cultists

From BrookesNews, November 10, 2008

By Viv Forbe

All over the western world, the penny is dropping. People are coming to realise that “global warming” is a phony crisis. More slowly they are learning that the misguided policies being promoted to change future climate will create real crises in energy and food supplies and costs. Already food prices have soared, and energy projects have been stopped or delayed.

Asia, Russia and the Middle East look on in disbelief as we commit economic suicide. If this man-made crisis coincides with natural global cooling (which will cause a sudden drop in food production) the world will become a cold, selfish, hungry and unpleasant place.  Not a nice legacy for our children.

The US, Germany and even UK are waking up to the danger as electoral anger on food and energy prices grows. Only the somnambulists in the South Pacific, Australia and New Zealand, are still insisting on nailing our people onto the Emissions Trading Cross. We have about 2 years to stop this hysteria from consuming our futures. But we must kill it stone dead. The great danger is that Emissions Trading will be introduced, but so slowly that almost no one will notice its introduction.

Compensation, exceptions and low rates of carbon tax will be combined with lots of make-believe green jobs. The costs will be there, prosperity will decline, but a whole cadre of people will be receiving subsidy bribes, or have jobs living on this scam. They will become a mercenary army of vested interests determined to maintain their artificial jobs and their legislated assets.  Once it is in, we will never get it out.

We will get little help from politicians and the media, until they see the turn in the tide of public opinion. They are followers not leaders. We have to reach past the media and the politicians using our own resources. The internet and word of mouth are our media. But we need lots of people relaying the messages everywhere — media, politicians and electors.

I am amazed every time a newsletter or media release like this goes out to our growing mail list. Within 30 minutes I hear it is on web sites in Canada, US, Britain, Australia, New Zealand and Europe. And several people have already reported that they have each sent it to several hundred more. Then we start getting messages or congratulations from people we have never heard of. Please keep this ball rolling.

Preaching to the Converted

People often ask about the futility of “preaching to the converted”. That is not what we are doing — we are “arming the disciples”.  We will get little assistance from traditional media, so we have to create our own circles of correspondents. We now have a worldwide network of active organizations and web sites. And our mail lists are expanding fast.

http://www.brookesnews.com/081011vivgw.html

Penny Wong defends $14m cost of climate change ads October 22, 2008

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Penny Wong defends $14m cost of climate change ads

Penny Wong, Australian minister of climate change

Penny Wong, Australian Minister of Climate Change and Water

From News.com.au, October 21, 2008

TAXPAYERS are footing an advertising bill of more than $146,000 a day so the Rudd Government can peddle its warnings about climate change.

The Government has set aside almost $14 million for a four-month climate change campaign, which started in July and ends next month.

The details, revealed in a Budget estimates committee hearing, sparked deputy leader of the Opposition in the Senate, Eric Abetz, to attack Climate Change Minister Penny Wong for being irresponsible and hypocritical.

The hearing was told almost $10 million had been poured into publicity, which includes television advertisements, leaving almost $4 million to be spent within the next few weeks.

“No wonder Climate Change Minister Wong refused to reveal the cost of this advertising when the campaign was launched in July,” Senator Abetz said.

Read the rest of the article, click below link
http://www.news.com.au/couriermail/story/0,23739,24530847-953,00.html

Selling Hot Air: Are Bogus Carbon Offsets Really That Bad? October 21, 2008

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Selling Hot Air: Are Bogus Carbon Offsets Really That Bad?

From the Wall Street Journal, October 20, 2008

When the idea of selling carbon offsets by otherwise profitable businesses is described twice in the same month as “gravy,” you know offsets have an image problem.

Balloons_art_200v_20081020100753.jpg

Are offsets just hot air, or necessary evil? (AP)

But the bigger question remains. Is the market for carbon offsets, imperfect as it is, a necessary evil if real progress is to be made cutting emissions of greenhouse gases?

Our colleague Jeff Ball reports today in the WSJ on the latest blow to the credibility of the offset market, that is, when companies get paid for cutting greenhouse-gas emissions. Landfills have been capturing methane for years, and making money off it–but thanks to the growing offset market, they are getting paid twice. As the paper says:

The sale of credits by these landfills undermines a premise of the global fight against climate change. The credit system was designed to encourage pollution cuts that wouldn’t have happened without a financial incentive. But the credits aren’t helping the environment if they’re merely providing extra profit for cleanups already made. And dumps already have an incentive to capture methane because selling it can be profitable.

This is what has many environmentalists troubled. Projects that rake in cash, be they landfills or Mongolian wind farms, are supposed to provide real, not bogus, emissions cuts. When rich countries and rich companies turn to the offset market to clean up their act, they aren’t really cleaning up the environment at all, many argue.

Read the rest click below link
http://blogs.wsj.com/environmentalcapital/2008/10/20/selling-hot-air-are-bogus-carbon-offsets-really-that-bad

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