Doug Henwood wrote:
> The are two parts to cap-and-trade systems, as the name
> suggests - the capping part and the trading part. The caps are
> supposed to decline over time. So oil companies and other polluters
> are not going to be free to pollute at the level they always have.
> And once again, in this passage you elide the differences between c&t
> and carbon offsets. They're not in contradiction, but they're not the
> same either.
> There are a lot of problems with c&t - extreme volatility of permit
> prices and intense administrative difficulties. But it's not fair to
> deny that proponents aim to see the level of emissions decline over
> time.
I asked Michael Dorsey (Dartmouth environmentalist and contributor to the new book) about whether I (and Rehana and Graham) unfairly characterised the conflict. His reply:
The idea that the " proponents aim to see the level of emissions decline over time." is very misleading.
Yes the Stern-ites of the world want this. But investment capital does not care. They are not moving their money into this for solving climate
change. They are doing soon because this is a risk-laden speculator's bonanza.
Let's take just the simple problem of grandfathering the pollution... not even the real or most nasty loophole...
Basically here the state gives away the Carbon Emission Reductions, as is happening in Europe, but look at the US example:
If the target of 1990 emissions by 2010 is implemented, 1,340 million metric tons of permits would be issued each year (according to the Energy Information Administration's 1997--Kyoto opening year-- Annual Energy Outlook). Current estimates of the cost of carbon regulation suggest the marginal cost of this target will be in the range $25 to $150/t. If the marginal cost, and hence the permit price, is $100 per metric ton, an efficient auction could raise $134 billion annually -- approximately ten percent of federal receipts and around two percent of U.S. gross national product (GNP) in 1995. If permits are grandfathered to companies in the energy sector, two percent of GNP is given away.
In terms of the cap business this is the easiest loophole, just sue your way through it:
From our buds at Point Carbon:
'28.02.07 US Steel Kosice takes EC to court over Slovak NAP
'US Steel Kosice, which operates Slovakia's largest steel plant, has filed a legal complaint against the European Commission over its decision to reject the country's allocation plan for the second phase of the EU emissions trading scheme.
'Slovakia's government has already filed a lawsuit of its own against Brussels over the latter's 29 November decision to reject Slovakia's proposal to hand out 41.3 million allowances annually over 2008-2012 for companies participating in the EU ETS. The Commission said Slovakia would only be allowed to allocate 30.9 million allowances per year. US Steel Kosice has now filed a legal complaint against the Commission decision.
"We strongly believe that it is not fair to restrict Slovakia's CO2 emissions when it is obvious that the country is in compliance with the Kyoto agreement. USSK did so with the aim to protect the interest and rights of our employees and shareholders," company spokesman Jan Baca told Point Carbon.'
Offsets they add even more distortion. And while he is right to know and note that C&t is not offsetting the fact is is that the C&T marketplace allows for offsetting.
So while DH may not want this, or see it as a problem, until this factor is taken out fully and the damage already done is fixed, we have to look at offsets. To do otherwise is illegitimate.
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