Big industry polluters cash in on credits; schools, hospitals, get hosed
A green scheme
By LORRIE GOLDSTEIN
Today let's examine what the Kyoto accord's promoters -- including Liberal leader Stephane Dion -- argue is the major capitalist tool by which industries will be compelled to reduce greenhouse gases.
And better yet, to turn a profit while saving the world from global warming. It's the so-called carbon emissions trading market, envisioned by the Kyoto accord.
Or, as it's known in Europe where it's been operating for two years, the Emissions Trading Scheme (ETS). Yes, you read that right. Scheme.
A Canadian version of the ETS, Dion argues, will force our industries to go green while allowing Canadians to make, as he puts it, "megatonnes of money" by cutting "megatonnes of emissions."
It's also, according to the European Union which runs the ETS, the major tool by which its members will reach their Kyoto targets for reducing carbon dioxide emissions.
Here's what's happened so far in the two years the ETS has been up and running.
- There's been "megatonnes" of profits, all right, mainly pocketed by some of Europe's largest energy companies -- the biggest emitters of greenhouse gases.
- The spot wholesale price of electricity in some jurisdictions, which will eventually be passed on to consumers, has jumped by up to 66%.
- The ETS has created an instant new industry of carbon trading consultants, brokers and speculators, many making big profits.
- By contrast, some hospitals and schools have been forced to spend millions buying emission credits, instead of hiring nurses and teachers.
- While ETS supporters argue overall greenhouse gas emissions will go down, all that's gone down so far are projections of future emissions. Real emissions are up.
- Almost half of the EU nations (12 of 25) are in danger of exceeding their Kyoto targets, including three of the five countries with the biggest economies in Europe -- Germany, Italy and Spain.
What went wrong? When the EU created the ETS -- where 12,000 firms which emit carbon dioxide gas buy and sell permits allowing them to do so -- several big mistakes were made.
First, these companies were given the permits for free, the equivalent of creating a new stock market and giving everybody in it free stock.
Second, most EU governments were too generous in handing out permits, meaning they gave out too many in light of their Kyoto emission targets.
EASY PROFITS
Third, many of the big industries, realizing these permits were basically free money, overestimated the amount of carbon dioxide they would emit (by up to 80%), lobbied their governments hard for these permits, got them, and then sold the extra permits for easy profits to other firms, who weren't as quick on the draw, or whose governments hadn't been as naive in handing out the permits in the first place.
Because too many permits were issued, their price has fallen so low at times that it's been cheaper for firms to buy more permits, rather than cut emissions, invest in new technologies to reduce them, or pay ETS-imposed fines.
Among big ETS losers were 150 publicly-run schools, universities, hospitals, military bases and prisons, sucked into the scheme due to the size of their boilers or power stations. Unlike the private sector, they didn't get enough free permits to start and thus had to buy them, even though they are bit players compared to the big energy firms that have made huge profits.
Despite these problems, which ETS supporters dismiss as growing pains, even its critics concede it's here to stay.
Prime Minister Stephen Harper has said he opposes trading carbon credits internationally, although the Tories have certainly studied the idea. Plus, it's hard to see how we could avoid participating if we stick with the Kyoto accord.
But as for its effectiveness in cutting greenhouse gases to date? The last word goes to William Blyth, director of Oxford Energy Associates in England, who dryly observed to Bloomberg News: "I don't suppose the environment has noticed the European emissions trading scheme."
http://thetorontosun.s5.com/
A green scheme
By LORRIE GOLDSTEIN
Today let's examine what the Kyoto accord's promoters -- including Liberal leader Stephane Dion -- argue is the major capitalist tool by which industries will be compelled to reduce greenhouse gases.
And better yet, to turn a profit while saving the world from global warming. It's the so-called carbon emissions trading market, envisioned by the Kyoto accord.
Or, as it's known in Europe where it's been operating for two years, the Emissions Trading Scheme (ETS). Yes, you read that right. Scheme.
A Canadian version of the ETS, Dion argues, will force our industries to go green while allowing Canadians to make, as he puts it, "megatonnes of money" by cutting "megatonnes of emissions."
It's also, according to the European Union which runs the ETS, the major tool by which its members will reach their Kyoto targets for reducing carbon dioxide emissions.
Here's what's happened so far in the two years the ETS has been up and running.
- There's been "megatonnes" of profits, all right, mainly pocketed by some of Europe's largest energy companies -- the biggest emitters of greenhouse gases.
- The spot wholesale price of electricity in some jurisdictions, which will eventually be passed on to consumers, has jumped by up to 66%.
- The ETS has created an instant new industry of carbon trading consultants, brokers and speculators, many making big profits.
- By contrast, some hospitals and schools have been forced to spend millions buying emission credits, instead of hiring nurses and teachers.
- While ETS supporters argue overall greenhouse gas emissions will go down, all that's gone down so far are projections of future emissions. Real emissions are up.
- Almost half of the EU nations (12 of 25) are in danger of exceeding their Kyoto targets, including three of the five countries with the biggest economies in Europe -- Germany, Italy and Spain.
What went wrong? When the EU created the ETS -- where 12,000 firms which emit carbon dioxide gas buy and sell permits allowing them to do so -- several big mistakes were made.
First, these companies were given the permits for free, the equivalent of creating a new stock market and giving everybody in it free stock.
Second, most EU governments were too generous in handing out permits, meaning they gave out too many in light of their Kyoto emission targets.
EASY PROFITS
Third, many of the big industries, realizing these permits were basically free money, overestimated the amount of carbon dioxide they would emit (by up to 80%), lobbied their governments hard for these permits, got them, and then sold the extra permits for easy profits to other firms, who weren't as quick on the draw, or whose governments hadn't been as naive in handing out the permits in the first place.
Because too many permits were issued, their price has fallen so low at times that it's been cheaper for firms to buy more permits, rather than cut emissions, invest in new technologies to reduce them, or pay ETS-imposed fines.
Among big ETS losers were 150 publicly-run schools, universities, hospitals, military bases and prisons, sucked into the scheme due to the size of their boilers or power stations. Unlike the private sector, they didn't get enough free permits to start and thus had to buy them, even though they are bit players compared to the big energy firms that have made huge profits.
Despite these problems, which ETS supporters dismiss as growing pains, even its critics concede it's here to stay.
Prime Minister Stephen Harper has said he opposes trading carbon credits internationally, although the Tories have certainly studied the idea. Plus, it's hard to see how we could avoid participating if we stick with the Kyoto accord.
But as for its effectiveness in cutting greenhouse gases to date? The last word goes to William Blyth, director of Oxford Energy Associates in England, who dryly observed to Bloomberg News: "I don't suppose the environment has noticed the European emissions trading scheme."
http://thetorontosun.s5.com/
what sort of environmental reforms would you suggest Bear?
