Sunday, April 01, 2007

Carbon Trading Schemes Fail to Live Up to Hype

If we have to rely to “carbon cap and trade” schemes to save us from global warming our goose will be cooked as the saying goes if Michael Dorsey from Dartmouth College is right. Writing in today’s Los Angeles Times, Dorsey cities an economic think tank in Europe called Researchers at Open Europe in stating the following about the much-heralded European Union carbon trading scheme:

They concluded that the EU Greenhouse Gas Emissions Trading Scheme represents "botched central planning rather than a real market." As a result, the report said, carbon trading has not resulted in an overall decline of the EU's carbon dioxide emissions.

Worse, the early evidence suggested that the trading scheme financially rewarded companies — mainly petroleum, natural gas and electricity generators — that disproportionately emit carbon dioxide. The pollution credits given to the companies by their respective governments were booked as assets to be valued at market prices. After the EU carbon market collapsed, accusations of profiteering were widespread. In fall 2006, a Citigroup report concluded that the continent's biggest polluters had been the winners, with consumers the losers.

If citizens and politicians keep believing the carbon cap and trade hype it is obvious that we could easily come to believe that we are confronting the global warming problem when in fact we are spinning our wheels and dishing out even more profits to the polluters. A straightforward reduction of greenhouse gas emissions seems like the our only real hope of averting climate change catastrophe.

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