Posted on 11/07/2008 6:59:47 PM PST by Robert A Cook PE
Nov 07, 2008
Global concern about the ailing economy has led the European Environment Committee to revise its energy package. The committee announced that it agreed the European Union should revise key clauses in its climate and energy package to adjust for the current financial crisis. The economic slowdown has hurt carbon credit demand and pricing.
Over the past few weeks EU member states have requested permission to make some revisions to protect their economies. Bulgaria, Estonia, the Czech Republic, Hungary, Latvia, Lithuania, Romania, Slovakia and Poland have criticized the proposed shift to a pan-European carbon credit auctioning mechanism and have gotten the support of France, Germany and Spain in their efforts to change the planned trading mechanism. See more here.
As Carl Mortished noted in the Australian, The price of carbon has collapsed. In only three months, life has become a lot cheaper for polluters. The financial cost of warming the planet has plummeted in Europe’s emissions trading system (ETS) and the effectiveness of such a volatile market mechanism in curbing carbon is being questioned. You may recall that the ETS is a mechanism to encourage businesses to reduce their carbon output. Europe’s larger companies are allocated permits to emit CO2, and these allowances, called EUAs, can be traded on exchanges. Companies that emit less CO2 than their allocation can sell EUAs for cash, but inefficient polluters must buy EUAs or face financial penalties. Carbon’s falling price spells companies going bust, the loss of jobs and the shredding of political reputations. Over the next year, no politician with re-election hopes will back a policy that would triple the price of carbon for industry and raise consumers’ energy costs. There is a wider question about the ETS that must be addressed, and that is whether it is a sensible mechanism to regulate carbon.
Finally, as David Fogarty, Climate Change Correspondent, Asia for Reuters reports here, U.S. President-elect Barack Obama’s credentials may be green, but gathering financial gloom means fixing the economy will take priority on his agenda before dealing with national carbon trading and clean-energy investment. Analysts and carbon brokers believe Obama’s support for an emissions cap-and-trade scheme and plans to create millions of “green” industry jobs send exactly the right signal for carbon trading and the burgeoning renewable energy industry. But don’t expect miracles overnight, they said. Depleted government coffers, rising unemployment and plunging profits across most industries could prevent him from making sweeping changes in his crucial first year. “We’re guessing until he goes and checks his bank account and finds out how much in debt he is,” said Michael Hopkins, energy derivatives manager at TFS Energy Asia-Pacific, referring to the hundreds of billions of dollars pledged by the Bush administration to stabilize the financial markets.
Pushing through a national emissions trading scheme won’t be the top item on Obama’s hit-list, Hopkins said in Singapore. “I think he has other issues to deal with before tackling the environmental side of it,” he added.
I wanna see all the con artists in the USA in full retreat.
Their time is past due.
Remember, folks . . . the Kyoto Treaty was voted down by a 95-0 margin in the U.S. Senate during the Clinton administration.
Huge surprise dep’t.
All right everybody, this calls for a chili cook off!
Lets give those feedlots a run for their money!
Yeah, Europe goes back on the deal because it will cost jobs and raise energy costs, but Obama is going full speed ahead with a cap and trade system in the middle of a recession cum depression.
We’ve been following that line of thought for a while - but that particular essay expressed many of the salient point very clearly.
Thank you.
I will begin following ICR’s web site more closely - perhaps contributing. (See my FR profile for one train of thought. )
If the bottom falls out of the carbon market what happens to AlGore’s $100 million?
If the bottom falls out of the carbon market what happens to AlGore’s $100 million? Oh please let the market collapse!
Well, if Gore can’t pay his own mortgage, Fannie will have to have us pay for him ... Right?
Does anyone have a link to the latest carbon market prices in Europe?
Oh, no! You mean we’re going to KILL the earth just to save our economies and our lives??
Just as an aside, the northeast states have a carbon auction system set up. Here in Syracuse, a cogeneration plant that generates 90MW for the grid and steam for a nearby paper mill has decided to shut down the turbine and just produce steam because of the financial costs of paying for the carbon credits.
So the net is less overall energy efficiency, isn't it?
He*l of a way to "save energy" .....
“””””””””the Kyoto Treaty was voted down by a 95-0 margin in the U.S. Senate during the Clinton administration.”””””””
That is because the dems haven’t set up their carbon credit scam companies yet! When they are in place they will reap trillions of dollars.
Renegotiate the carbon trade system? Hell, get rid of it! After all, we may need Europe, of all places, to hold up the flagging world economy after the Obamao’s minions get through eating out our substance.
Thanks for the link!
there is a community...
Perhaps as the anointed one sits at his desk in the oval office and watches people falling over from freezing he will become the community organizer to halt the global warming freaks hold on the world’s industrial complexes. Then again, he may not. After all he has a lot of furniture he can go through as they light a bon fire in the WH to keep the kids warm.
Do they cater to Cosmo Cramer on Seinfeld???
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