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TechnoratiFriends of the Earth Attacks Carbon Trading
An FoE report says 'cap and trade' carbon markets have done little to reduce emissions but have been plagued by corruption and inefficiency
The world's carbon trading markets growing complexity threatens another "sub-prime" style financial crisis that could again destabilise the global economy, campaigners warn today.
In a new report, Friends of the Earth says that to date "cap and trade" carbon markets have done almost nothing to reduce emissions but have been plagued by inefficiency and corruption that render them unfit for purpose.
As the world heads towards the Copenhagen climate summit, Britain and other developed countries want to see carbon trading expanded worldwide. The carbon market, mainly based in Europe, was worth $126bn in 2008 and is predicted to mushroom to $3.1tn by 2020 if a global carbon market takes off.
However, FoE fears that the area has been hijacked by speculators on the financial markets. Sarah-Jayne Clifton, the report's author, said: "The majority of the trade is carried out not between polluting industries and factories covered by carbon trading schemes, but by banks and investors who profit from speculation on the carbon markets – packaging carbon credits into increasingly complex financial products similar to the 'shadow finance' around sub-prime mortgages which triggered the recent economic crash."
The FoE claims that the first phase of the European emissions trading scheme between 2005 and 2007 failed. And the second phase, from 2008-2012, is likely to fail too, it said. FoE is calling on governments to use more reliable instruments such as carbon taxes, which are harder to avoid and can be effective at changing people's behaviour and reducing emissions.
A spokesman for the Department of Energy and Climate Change said: "We agree that domestic action by developed countries as well as public finance is essential to meet the challenge of climate change and … the UK is going all-out to get an ambitious, fair and effective deal.
"But carbon trading can also play a role, making it far more likely that we tackle dangerous climate change, get cost-effective emissions reductions and get money to the poorest countries of the world."
18 Comments so far
Show AllBe ready for climate change...
To drholmquist---
I could not have said it more succinctly.
See how GM is buying TREES for cap and trade...
If I bottle my fart can I sell it to you? (Come to think of it, I bet you could sell bottled farts!)
***
Meanwhile sanych, please define "prosperity." I've been reading on economics for half a century and I have serious difficulty defining "prosperity." For example, it nearly always seems to come at someone else's expense. And when it doesn't, it isn't permitted.
Would it be naive to suggest that the intent of the System is to destroy "free will"?
-30-
First of all - I am against cap and trade for all the stated reasons - corruption and ineffectiveness - i.e. scam.
Second, I would like to point out to this progressive publication that big scary Republicans - with the exception of four individuals - voted against this measure in Congress. It was completely pushed through by the Democratic party.
Third, who comes up with these names? If you are not with "Friends of the Earth", are you not a friend of the Earth? An enemy? What about "Americans for Prosperity"?
"cap and trade"?
What is being capped?
What is being traded? The right to pollute?
Can anyone sign up or do you have to be a corporation?
Can I trade my farts for yours?
Is this all another big diversion or what?
-30-
The policing of cap and trade is suspect. What's to stop someone from burning down a forest on Monday, selling the land to a foreign subsidiary on Tuesday, throwing some pine seeds in the ground on Wednesday and selling the carbon credits for reclaiming the forest on Thursday?
These markets for offset credits can also be manipulated, with well-funded corporations driving down the value of the offsets to decrease their costs, continue to mis-approriate natural wealth, continue to exploit smallholders and indigenous people, and discredit the movement for environmental and social justice.
The complexity and opacity of capitalist finance provides the global commercial autocracy with the tools to enrich itself at the expense of the vast majority of the world's citizens ... those who have neither the time nor the requisite skepticism to discover the myriad ways in which their employers and rulers are screwing them, literally to death.
Support a straightforward, transparent, across-the-board carbon tax, instead of cap-and trade scams designed to deflect difficult political decisions and enable the never-ending rape of people and planet by corporations and the investor class.
Hi All-
I've written about the sham that is "crap and trade" on both my site:
http://watertreading.blogspot.com/2009/11/carbon-discredits.html
and Technorati:
http://technorati.com/lifestyle/green/article/carbon-discredits/
It's below for those who don't want to click-through.
Salud,
jp
CARBON DISCREDITS
by
JP Kaneshida
October 30, 2009
The whole idea of cap and trade is a dumb and moreover indirect way of tackling environmentalism. Futures speculating is fun for sports betting where - save for degenerates - quality of life or critical things like the environment aren't on the line, but it's a weird and indirect way of dealing with problems. Imagine monetizing something like speed limits into futures - absurd, right?
The answer is to deal with driving and speeding directly - pay to register and drive, pay for your license, pay to pollute (smog check), pay for your insurance, pay for your citations... etc. Direct seems to work. If you're a business that pollutes, why should it be any different?
I'll tell ya why - with cap and trade/carbon credits, HUGE pools of money will be gambled that some think will dwarf the energy futures market. And therein lies the rub of this model - it's gambling. By creating a futures market out of pollution, the game makers have created a casino, and everyone knows that casinos make their billions off of the fish.
And the ones who will reap from Uncle Scam and Wall Street's newest casino are, once again, huge institutional pools of money. Matt Taibbi knows who they are
(http://watertreading.blogspot.com/2009/07/speculation-terrorism-how-big-banks-and.html), and guess what? They have an enormous edge.
Yeah, Yeah. Big surprise, I know.
"But carbon trading can also play a role, (LIE)
...making it far more likely that we tackle dangerous climate change, (LIE)
...get cost-effective emissions reductions (LIE)
...and get money to the poorest countries of the world." (LIE)
Wow What a great group... friends of the Earth.
This young lady seems to prove that her generation is a lot smarter than the present bunch of conservative old farts running the world.
Except that she still seems to believe that "carbon trading" will actually reduce greenhouse gas emission. How can it? It's just the latest capitalist mindset approach to any problem: Let's see, how do I make money out of this catastrophe?
To establish this as a "commodity" means it will fall into the same shadow economy that foisted the dot.com, housing and energy speculation bubbles on the western world. Sadly, Matt Taibbi pointed out in a Rolling Stone article that Al Gore has already formed a company with the help of Goldman Sachs executives to handle investments on this. While glaciers melt, sea levels rise, species die and other not so great stuff happens to the environment inside traders will get reach as supported by new government policies and dictates. It's ridiculous. This money should be flowing directly into the world's economies to develop green and sustainable technologies, update worker skills and develop a new economy. We're in sad shape, for sure.
The real crisis is the U.S. Congress which obstructs authentic transformative outcomes.
Working to change a dysfunctional system ripe with corruption is a fools quest.
Wisdom teachers in my culture are now telling us to "prepare."
The superstructure is going to come crashing down, and with it the illusions so many cling to.
What are you going to do then?
Speculation is only part of the problem. What must be addressed is the question of reserve rates---how much cash on hand versus how much credit extended. Expect much outraged howling from Wall Street if anybody attempts to tinker with the current (laughably lax) regulations.
Given the user-friendly signals the White House is sending to the FIRE sector, I don't expect substantive changes. The next bubble is being inflated as we speak.
Cap and Trade is a scam from the beginning to the end. We (both parties) offer Free Polluter Cards to the biggest polluters, just because they've been doing it before. And then we allow those polluters to sell their Free Polluter Cards to other companies. Where is the reduction in pollution? Where is the money coming from? Who gets the money?
Why are so many liberals fooled by this scam?
Who is 'fooled' by this scam? It's obvious that our elected gangsters are at it again.
I read that half our greenhouse gas is caused by eating meat. I'll do my part by becoming a vegan.
Good for you--it's the single most effective thing an individual can do to reduce your carbon footprint.
Please change the "May" in the title of this article to WILL.
The financial industry that owns Federal lawmakers is always looking for ways to create more opportunities to rake in billions for the 1% at the expense of the 99%. The Federal lawmakers are only too happy to oblige them whenever.