2011-06-24 09:02:36Carbon Markets Are Not Cooling the Planet -- Stephen Leahy -- Inter Press Service
John Hartz
John Hartz
john.hartz@hotmail...
98.122.98.161
by Stephen Leahy

BONN, Germany - Carbon markets have been widely promoted as the only way to generate enough money to enable industries and countries to reduce their carbon dioxide emissions, which are largely responsible for global warming. The only problem is that nearly 20 years after their conception, they have failed to work, and have also been subject to fraud and other financial crimes.

 

Carbon markets have been widely promoted as the only way to generate enough money to enable industries and countries to reduce their carbon dioxide emissions, which are largely responsible for global warming. The only problem is that nearly 20 years after their conception, they have failed to work, and have also been subject to fraud and other financial crimes. (File) Interpol, the world's leading policing agency, has warned that carbon market schemes are easily taken advantage of by organised crime.

2011-06-24 17:00:55
Paul D

chillcast@googlemail...
82.18.130.183

20 years??
What planet was this on.
Conception is different to implementation.

2011-06-25 22:19:34markets still seen as only way to get reductions
Stephen Leahy

writersteve@gmail...
86.33.57.8

Despite the evidence...and the fact that CC is the world's biggest 'market failure'

2011-06-25 22:30:05
nealjking

nealjking@gmail...
84.151.46.95

I believe that most economists who have opined on this topic have concluded that a straightforward carbon tax would be more workable and flexible.

2011-06-26 00:11:14Nealjking
John Hartz
John Hartz
john.hartz@hotmail...
98.122.98.161

Many environmentalists and environmental organizations also find the carbon tax to be superior to "cap and trade." 

PS -- A carbon tax is definitely consistent with the KISS principle. 

2011-06-26 00:39:41
Tom Curtis

t.r.curtis@gmail...
112.213.172.142

Stephen Leahy, I don't know what the world's biggest market failure is, but certainly the negative externalities from fossil fuels far exceed any negative externalities from the EU Carbon Market.  Consequently that market is not even close.

I found your article disappointing in that the primary purpose of Carbon Markets is not to generate income for renewable investment, but to put a price on GHG emissions.  That issue was not even mentioned, let alone adressed in your article.  Without such a pricing mechanism it is highly unlikely GHG emissions will be reduced rapidly enough.  Even in the event that renewables become cheaper sources of power than fossil fuels, it is likely that the cost of building and operating a new renewable power plant will be greater than simply continuing to operate existing fossil fuel power plants, in which event fossil fuel power plants will only be replaced as they become too expensive to maintain due to age, ie, too slow.

2011-06-27 02:35:44 Tom - misunderstood
Stephen Leahy

writersteve@gmail...
86.33.57.8

Tom, you misunderstand my comment -- we agree. As for the article carbon markets are all about generating income for renewables and carbon sequestration by putting a price on GHG emissions. I thought that was pretty clear but perhaps it could have been clearer. The point of putting a price in carbon is to make fossil fuel pay its real costs -- right now they pollute the air and the atmosphere for free despite the enormous costs we all have to pay. With a high enough carbon price it will be far cheaper to go renewable - which is the point.

2011-06-27 03:43:32
nealjking

nealjking@gmail...
91.33.103.153

A problem with the cap & trade approach is that if you start out with a price that is too small, it provides no significant incentive to decrease emissions until the world has "soaked up" the excess low-cost CO2 credit - by emitting the CO2. And you have to maintain the political pressure to maintain the CO2 regime while nothing good is happening.

2011-06-27 04:50:32
Stephen Leahy

writersteve@gmail...
86.33.57.8

Agree on the cap & trade. Carbon tax is a simple and better approach but price has to go up relatively quickly.

2011-06-29 02:43:44
Tom Curtis

t.r.curtis@gmail...
112.213.167.230

nealjking, I actually consider that an advantage to the cap and trade system.  Large changes to an economic system always cause disruption to the market, which is going to be somebodies pain in bankruptcy or lost jobs.  To avoid that, I woud like to bed a carbon price in slowly.  With Cap and Trade I would ideally start with a cap equal to 1 or 2% above the previous years emissions, and gradually scale it up by lopping of 1 or 2 per cent per annum.  With a Carbon Tax, the initial tax rate would be set very low ($1 per ton of carbon) and scaled up in $2.50 to $5.00 increments.

 

Unfortunately, I fear, we have run out of time for such sensible implimentations.

2011-06-29 02:49:36
Tom Curtis

t.r.curtis@gmail...
112.213.167.230

Stephen Leahy, there is a difference to increasing the price of fossil fuels and subsidising renewables.  Australia's forthcoming Carbon Tax will be used to fund compensation to consumers, with a small amount set aside to fund renewables.  It is expected that the increased price of carbon will make renewables more economic, but that is different from a direct subsidy.  The way the article is phrased, it appears that benchmark of a carbon market is only how well it funds subsidies rather than how well it prices carbon.

 

The difference is important.  A subsidy for renewables may help them compete with fossil fuel power sources, but will not help drive down consumption by improved efficiency. 

2011-06-29 05:39:56
nealjking

nealjking@gmail...
84.151.39.223

Conventional wisdom on cap & trade is that if you get the early years wrong (too cheap), you've poisoned the system for several years.

This is why Jim Hansen, among others, was not unhappy at the failure of cap & trade in the US Congress.

Also why Europeans are still scratching their heads about what to do with cap & trade now.