At last really real info appears in this group.



It is crystal clear that no vital resource can be simply substituted
with money – if even no multinational company involved. Water, air,
food – can one use money itself instead for?



Playing payments is not synonymous to practically managing a gap in
supply of /demand for goods needed equally by everyone for a very
survival.



Is it in plain English?




--- In ClimateChangeAction@..., glparramatta
<glparramatta@...> wrote:
>
>
http://www.latimes.com/news/opinion/commentary/la-op-dorsey1apr01,0,1230\
661.story?coll=la-home-commentary
>
> Carbon trading won't work
> Experiments with the market scheme favored by Schwarzenegger shows
> trading favors big polluters without curbing global warming gases.
> By Michael K. Dorsey
> MICHAEL K. DORSEY, assistant professor on Dartmouth College's faculty
> of science, teaches in the environmental studies program.
>
> April 1, 2007
>
> Economists, some environmentalists and a growing gaggle of
> politicians are pushing a grand strategy that a market mechanism —
> known as "carbon cap and trade" — can rescue us fastest from a
> climate catastrophe. But early evidence suggests that such a scheme
> may be a Faustian bargain.
>
> Gov. Arnold Schwarzenegger is one of the chief proponents of the
> market view. He has joined the governors of Washington, Oregon, New
> Mexico and Arizona to create the Western Regional Climate Action
> Initiative, which "sets the stage for a regional cap-and-trade
> program" that he hopes will serve as a model for a national program.
> The Kyoto Protocol, which went into effect in early 2005 (but which
> the United States has not signed), also endorses this approach.
>
> Carbon cap and trade works this way: A group of nations (signatories
> to the Kyoto Protocol) or a group of states (the five Western states
> in Schwarzenegger's plan) cap their carbon emissions at a certain
> level. Then a government agency, such as the European Union or the
> California Environmental Protection Agency, issues permits to
> polluting industries that tell them how much carbon dioxide they are
> allowed to emit over a certain time.
>
> Companies unable to stay under their cap can either buy permits, or
> "emission credits," on a trading exchange, which allows them to
> pollute more, or they will face heavy fines for exceeding their
> carbon dioxide targets. Firms that are able to come in under their
> caps can sell their excess credits on the exchange. Thus the right to
> pollute is a commodity bought and sold in a market.
>
> The idea of trading pollution rights was part of the reauthorized
> 1990 Clean Air Act. The program successfully reduced the amount of
> sulfur dioxide emissions, which cause acid rain, largely because the
> sources were few enough (about 2,000 smokestacks in the Midwest) that
> they could be monitored effectively and because there was a national
> system, administered by the federal Environmental Protection Agency,
> to enforce the legally required limits, or caps.
>
> Carbon trading on a global scale, however, amounts to an untested
> economic experiment. The most ambitious carbon-trading experiment to
> date began in the European Union in 2003. About 9,400 large factories
> and power stations in 21 member states were targeted, and the EU
> Greenhouse Gas Emissions Trading Scheme was established to trade
> pollution rights.
>
> In January 2005, the EU governments distributed carbon credits —
> permits to pollute — to the companies and power plants. The
credits
> were based in large part on what the firms estimated their annual
> carbon dioxide emissions would be. Because these credits were given
> out, not auctioned off, the firms did not pay for their pollution.
> Yet they stood to make money by selling them.
>
> The EU's official accounting of the companies' emissions, released in
> April 2006, revealed that the companies' and power plants' actual
> emissions came in below estimates. Some said the firms had inflated
> their earlier emissions estimates, and thus all had credits to sell.
> This situation produced a surplus.
>
> Once it was known that the number of available permits exceeded
> demand, prices slumped. Indeed, fear that there are too many permits
> for sale (combined with concerns about the EU's regulatory
> shortcomings) have effectively collapsed the market. A March 2007
> report from Deutsche Bank Research noted that "many EU nations are
> still a long way from delivering on their Kyoto Protocol commitments
> to reduce carbon dioxide emissions."
>
> Researchers at Open Europe, an economics think tank in Britain,
> recently issued a report on the experiment. 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.
>
> Larry Lohmann, who works with the Corner House, a research
> organization in Britain, argues that carbon trading is little more
> than a license for big polluters to carry on business as usual. For
> instance, the Greenhouse Gas Emissions Trading Scheme was further
> weakened by provisions that allowed big polluters to buy cheap
> "offset" credits from abroad. A British cement firm or oil company
> that lacked enough EU permits to keep on polluting could make up the
> shortfall by buying credits from, say, a wind farm in India or a
> project to burn landfill gas to generate electricity in Brazil. "Such
> projects," Lohmann said, "are merely supplementing fossil fuel …
not
> replacing it."
>
> These problems may soon infect the cap-and-trade system of the five
> Western U.S. states. In July 2006, Schwarzenegger and British Prime
> Minister Tony Blair announced their intention to join together to
> address global warming, possibly by linking emerging markets for
> pollution credits in the U.S. with established ones in Europe.
>
> U.S. industry and environmental leaders recently joined together
> under the catchy name USCAP, for U.S. Climate Action Partnership.
> Among the participants are Alcoa, Caterpillar, Duke Energy, DuPont,
> General Electric, Pacific Gas & Electric, the Natural Resources
> Defense Council and the Pew Center on Global Climate Change. The
> group called for some form of carbon cap and trade, but its reduction
> targets, in effect, would keep atmospheric carbon dioxide at roughly
> current levels over the next five years.
>
> The EU experience doesn't augur well for the effectiveness of a
> global carbon-cap-and-trade scheme in a world characterized by
> growing economic inequality and enormous differences in governmental
> capacity to provide oversight, let alone regulation. The risk is that
> by the time it's apparent such a scheme is not working, extreme
> climate change will already be wreaking havoc.
>




[Non-text portions of this message have been removed]