WSJ Finds Kyoto-Inspired Carbon Trading Hikes Electric Bills for German Consumers

Business & Media Institute ^ | 9/11/2006 | Ken Shepherd

[Thebaddog]

Whadda freekin sooprize.

[calcowgirl]

From the Wall Street Journal (subscription required) :

For German Firms, New Emission Caps Roil Landscape
To Prepare for Kyoto Protocol, EU Embarks on Road Test; Industry Responds, Slowly The Price of Electricity Jumps
By JEFFREY BALL
September 11, 2006; Page A1

NIEDERAUSSEM, Germany -- Last year, to help combat global warming, Europe started charging industry for the right to spew hot air. For the first time on such a scale, governments slapped limits on the carbon-dioxide emissions of power plants, steelworks and other factories. Companies exceeding the caps have to buy CO2 "allowances" that trade on a European market.

Because CO2 emissions now carry a cost, Germany's largest utility, RWE AG, is spending to improve the efficiency of its aging coal-fired power plants, including its biggest power station here in the country's industrial heartland.

Carbon dioxide also is padding the profits of RWE and other utilities, because they have been able to raise electricity rates to more than cover the new costs. Manufacturers that use a lot of juice are fuming. "The utilities get a huge amount of windfall profits, and the energy users get windfall costs," complains Markus Weber, a manager responsible for CO2-allowance trading at steelmaker ThyssenKrupp AG.

Germany's experience with Europe's new emissions constraints holds important lessons for countries that want to curb emissions of CO2, a product of fossil-fuel combustion that contributes to global warming. In Germany, the caps are starting to have their intended environmental effect: They are prodding industry to burn fossil fuels more efficiently.

At the same time, the new rules have upset the business status quo. Industries battled hard to bend the rules in their favor, creating new winners and losers. The winners include utilities that can charge higher rates and profit from trading allowances -- permits that give companies the right to emit carbon dioxide -- at opportune moments. Losers include energy-intensive manufacturers.

Although the U.S., the world's biggest emitter of CO2, has rejected the Kyoto Protocol, many U.S. business leaders say it is only a matter of time before the country imposes some sort of carbon constraint. Earlier this year, Congress discussed how such a nationwide cap might be structured. Last month, California passed a law that will impose the U.S.'s first cap on global-warming emissions. Now the state has to figure out how to put that mandate into practice.

(snip)

[Dan Evans]

The Kyoto Treaty is a mutual economic suicide pact.

[samm1148]

It never ceases to amaze me how the average democrat voter swallows this nonsense; like it will never affect them. Thirty years of green nonsense have come home to roost in higher fuel prices, the loss of a substantial chunk of domestic manufacturing and reduced national security ala dependence on arab oil.

[lewislynn]

WSJ Finds Kyoto-Inspired Carbon Trading....

AKA "market forces"

When you hear the likes of GW Bush talk about "market forces" reducing pollution, "carbon trading" is what they're talking about.

[calcowgirl]

Why call out only the democrats? Now you can have the same nonsense sold under the (R) Label!

Republicans for Environmental Protection

[calcowgirl]

Yep! Been hearing a lot about those "market based solutions."

There is nothing market-based about it.

[ncountylee]

During the So Cal heat wave, I ran my generator during peak hours and learned that I could get by with no power, grid or generator, overnight. Now with a travel alarm and an oil lamp, I kill all power when we go to bed. Savings is only about 15% but I'm having fun.

[norwaypinesavage]

Let me see if I understand this: A company generating electricity pays money to someone not generating electricity and the price of electricity goes up? Who'd a thunk it?

[goldstategop]

Expect higher electricity bills. Another good reason I'm leaving this state. The idiots here keep making an already expensive state ultra-expensive - and it won't affect global warming. Liberal California will find it has the government it deserves.

(No more Olmert! No more Kadima! No more Oslo!)

[EricT.]

Where are you going?

[EricT.]

The only time my power goes out is when we have a severe thunderstorm and a pole gets blown over. Lets see...that's happened....once in three years. Oh yeah, I can afford to run the air conditioner all summer long, day and night.

[upchuck]

Well, DUH!

[upchuck]

Silly Germans must think Global Warming is free.

[SAJ]

I'm shocked, SHOCKED I tell you!

Whadda buncha maroons.

[greasepaint]

does anybody have any numbers?

how much is this company paying?
how much did electric rates go up, need a number, don't
want a percentage

how much 'grandfather rights', were given
to the compny?

[Malesherbes]

We should all save electricity by not watching CBS news.