Some City people have good reason to be shocked that their banks have pulled out of the carbon market.
RBS for example is considering the move quietly but then again they consider a lot of things, not least what to do with bonuses and what flag to fly – now they are a socialist bank entity owned by labour government fiat on behalf of the bleeding taxpayer. And they also own a carbon footprint bit of business too.
Why would anybody want to buy this or that or the other business?
Or the software or the geeky techie solution that doesn’t work even in the most advanced of mobiles – when we have the Carbon Disclosure project?
CDP does all that and more for Free. Not bad for Civil Society. Great value for the Climate too.
The recent economics and business graduates and all the city interns, and eager beaver traders, whose career goals and dissertations on carbon finance now qualify them only for unemployment and a Starbucks barrista job, are a bit put off by this too. But there You have it.
And JP Morgan, which paid a jaw-splitting $204m for carbon trader Ecosecurities last September, must be feeling a little sore. Perhaps it relied on the GHG Emissions Credit Trading report, which predicts a $4.5 trillion carbon market by 2020.
Goldman Sachs bought another one of these. Paid a bit more, but who cares. Anyway they don’t regret it as the cost was far less than their climate department’s bonus pool. See they repurpose things quickly there and now do a lot of dirty energy stuff too.
Can you say Enron?
And then hapless SAP bought the most expensive Carbon footprinting greenwash start up and now they figure it ain’t worth selling but they must integrate. So now they go out to buy another one.
If at first you don’t succeed – try again. Can’t help notice though the board is a bit sour faced with it….
I’ve seen so many foootprinting corporate and private and personal start up plans that I put a moratorium on any investment in them. They aren’t worth anything more than the freemium that anyone pays to use them or not. Maybe they were all smoking something together and came up with the same idea – simultaneously.
100 monkeys or something like it….
No less than the supreme optimistic nihilist , Gordon Brown, who sees the carbon market as key to another form of global domination by the City – feels his plans to Save the World again – are undermined.
By whom or what or Why is irrelevant. Can’t understand why the man doesn’t wear a proud black pirate eye patch. It would boost his popularity loads.
He will gain the Mose Dayian macho edge and nobody will be able to say anymore that He is not really – Captain Hook – out to steal the joy of children.
More importantly, the global response to climate change, and the economic fortunes of the City of London will improve with the PM as a keen Privateer.
Brown told WWF in 2007, the government wanted binding limits on developed country emissions in a post-2012 climate agreement, because London was the world’s carbon trading capital, and “only hard caps can create the framework necessary for a global carbon market to flourish”. Thus he made it clear that the carbon market took a rather higher priority than the health of the climate system.
Putting the buggy before the horse is nothing new for Gordon – friend of the Banker bonus pool – Brown nose garden gnome.
The same outlook was evident among the economists designers of the Kyoto protocol, who cared greatly about makng money rather than the environmental Health.
The economists who created the Kyoto agreement in the eleventh hour, they also created the global carbon market through its various carbon trading mechanisms, such as the clean development mechanism (CDM). Thus the great achievement of the protocol was not to reduce carbon emissions – they actually rose at an increasing rate under its watch, three times faster in the early 2000s than during the 1990s – but to create a market in emissions rights and notional emissions reductions worth tens of billions of dollars a year.
With the failure of the Copenhagen climate conference to agree a successor to the Kyoto protocol for beyond 2012, it is right that confidence in the future of carbon markets has fallen. Hopes have all but evaporated that the industrialised “Annex 1″ countries will reach agreement in time, thanks to the rifts that emerged at Copenhagen between the US and China. Other Annex 1 countries will not sign up to an agreement that does not include the US. The US will not sign up to an agreement that does not constrain the emissions of China and other big developing country emitters. And China is in no mood to sign up to anything much at all, at least until countries take a serious lead.
Are carbon markets dead? Almost.
But the reports of its death may have been slightly exaggerated.
For starters, the world’s major carbon markets are not the ones created directly by the Kyoto protocol, but the European Union’s emissions trading system (EUETS).
The EU-ETS, allows emissions “allowances” from the UN and EU generous allocations to major emitters, to be traded among the EU’s carbon polluters. Set up as part of the EU’s means and methods to achieve its Kyoto target, it turns over around 3 billion tonnes of carbon each year. Three times the Kyoto compliance market limit.
The EU-ETS also allows for a proportion of emissions reductions to be met using Kyoto protocol carbon credits. And even if there is no global 2012 agreement, the EU-ETS is set to continue, as the means to deliver the EU’s promised 20% cut in EU-wide carbon emissions by 2020. There is thus the prospect that a Kyoto protocol market will continue to create CDM-based carbon credits for the EU-ETS market, even after the protocol itself has effectively expired, with no new emissions reduction targets beyond 2012.
But that still leaves the carbon market seriously short of growth prospects. And here the problem is not so much the Copenhagen Accord, but the US.
Specifically, the little known state of Massachusetts. The old Kennedy senate seat that the family failed to restock with one of their own… and instead the Democrats fielded a disconnected princess of bureaucracy. Now they get the blow back for their folly.
Waxman-Markey climate bill that would have created a US carbon market to rival the EU-ETS was already in deep trouble before. Now that Barack Obama lost his controlling majority in the US senate, it looks positively ice-berged .
Of course now, the election of newbie, beef steak, truck-driving, beer guzzling, oil head, coal lump shitting, and proud of it – Republican senator Scott Brown of Mass – means the Climate bill is looking a bit dead in the water at least in the Senate House. And sinking slowly.
For these bills take a long time to sink to the bottom littering the ocean and posing a hazard to navigation…
But even Lazarus has a tendency to ressurect.
He can rise up and carry his bed – in this case his bed is the US climate change bill – with him to the house.
Next?
My friend John Davies beats on me all the time about a uniform global carbon tax that would represent a considerable improvement on the flawed and ineffective carbon markets that we have created to date.
Of course nobody likes taxes. They are too blunt an instrument – I say.
He harps on: To work properly, the tax must be global, it must plug all the holes and it ought to be applied universally.
I retort: Good Luck for this to succeed.
Have you gone to see the Security Council negotiations in the UN?
Chances of passing in the UN a global universal carbon tax are just as likely as if Alliens were to arrive and impose it upon us as a tribute.
A tribute to survive we might pay to Alliens but we would never pay it to ourselves.
He insists: A universal Carbon Tax must be levied “upstream”, at the small number of locations where fossil fuels are produced and their flows are concentrated, rather than the billions of locations at which they are burnt.
Go tell that to OPEC. I said…..
But let us dream for a moment: It could happen in a parallel Universe.
And there it should begin as a modest tax. On the level of a few dollars per tonne of CO2, not to frighten poor countries. But even a $3-5 carbon tax, (almost invisible in terms of cost impacts), would raise far more than the needed $100bn per year to mitigate climate change impacts for the most vulnerable and to reward their adaptation.
To encourage developing countries to sign up, the rich countries should double their own fund commitments towards the carbon tax revenue, and put the whole lot into a climate change fund. Managed by Mr Gordon Brown soon to be private Citizen and then the ideal person for the job. No Joke here. He always wanted to be a banker. Let’s just give the man his dream job.
This money – provided Gordon doesn’t give it back to his banker wanker friends out of a nasty habit he picked up in the office… – will be spent by participating developing countries to finance their adaptation to climate change, fund forest conservation, save the Rainforests, change the face of agriculture, advance the clean development and deployment of renewable energy, change the baseload, and even save a pittance to apply it for advanced research and applications of geo-engineering techniques.
This last effort should be kept quiet – just in case we need to stabilise the world’s climate – suddenly without Prince Charles knowing about it.
Of Course all of this would be in perfect harmony with the Copenhagen Accord and its generation of negotiation rounds…
Over time the carbon tax could rise and maybe get traded. People are inventive ad ths they could create a carbon market out f the tax too.
Or it could be advanced to a better and more sophisticated economic mechanism based on the auction of carbon permits, subject to a reserve price, as set out in my “Kyoto2″ framework.
But a simple, modest carbon tax is surely the best first step we can take towards getting there and avoiding the worse of climate change nasty effects.
That and raising the much-needed funds to finance climate solutions – would send an important signal to companies and investors – for long-term investments in clean energy, energy efficiency and a low carbon future.
New entrepreneurs, graduates, students, city slicks and traders will be rewarded long term - something that today’s boom-and-bust carbon markets have failed to achieve – and just maybe also become good stewards of the Environment.
Got to hand it to John – FOE aside – as his vision is clear…
Yours,
Pano
PS:
The proof is in the pudding.
Possibly in this case is in the execution of the tax.
Say Global Government…
Try to pass that under the Senate… and soon you’ll find out You really need Captain Hook.
The real one with the fancy dress and the wooden stump too.
The patch is not enough.
