Friday, June 15, 2007

Eco-Hypocrisy Corporate Style IV

"Corrupted by wealth & power, your government is like a restaurant with only one dish. They've got a set of Republican waiters on one side & a set of Democratic waiters on the other side. But no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen."
Huey Long

Let the Gaming begin.

In part three of Eco-Hypocrisy Corporate style we marveled at just how big the US-CAP members are. Now a quick look at how brazen.

There are many ways to game a cap-and-trade policy to corporate
(or national) advantage.
One is how emission credits are distributed. Are they distributed for free? Auctioned to those companies willing to pay?

Another area for gaming is setting a start date.
This is where the EU gamed Kyoto, setting the start date for crediting seven years prior to the 1997 agreement, taking advantage of German reunification and the subsequent shuttering of the communist style (ridiculously inefficient) industrial infrastructure. Throw in the British "Dash for Gas" and the Europeans had a running start on beating the number they inserted into the Protocol.

They formalized what's known in the literature as a "Credit for Early Action"

Lo and behold, what do we find on the USCAP homepage? "Reward early action."

And on page five of "A Call for Action"?:

Encourage Early Action
"Prior to the effective date of mandatory emission limits, every reasonable effort should be made to reduce emissions. Those companies that take early action should be given appropriate credit or otherwise be rewarded for their early reductions in GHG emissions."

On page eight, just in case you missed it:

Credit for Early Action
"It will take time to get a cap and trade program up and running. We need to reward those firms that have acted to reduce GHG emissions and encourage others to do so while the program is being established. Legislation should require regulations to be promulgated by no later than the end of 2008 establishing an early action program that grants a credit for reductions made starting from a specified date, such as 1995, until such time as the mandatory program becomes effective. Claimants would be required to demonstrate their eligibility for the credit based on accurate data."

Still didn't get it? Page nine:
We need to reward those
firms that have acted to
reduce GHG emissions
and encourage others to
do so while the program
is being established.

One of USCAP's members, The DuPont Corporation, had this to say to the state of California last week:

Give more explicit attention to encouraging and crediting voluntary early action:

To provide incentive for voluntary action prior to a cap and to keep whole those actors who voluntarily reduced in the past we believe credit for early action is critical. Such credit should be predicated on clear demonstration of actions taken to reduce GHG emissions and the resulting reductions, such as engineering records of specific projects. The absence of any formal policy regarding recognition of early voluntary action has the potential to seriously retard such action at the very time when attention to climate change and the need or such action is beginning to sink-in across society. In an environment in which either regulatory mandates or market opportunities are highly probable in the foreseeable future, companies must consider the possibility that early action to realize relatively cost effective opportunities for reductions may not be “creditable” in future regimes, not only denying them use of that “low-hanging fruit,” but pushing them further up the marginal cost curve for reductions that may be required in the future. Not only is this not provided for in the current “early action” discussions, but in at least one case (2-10 Fire Supression) you are singling out for severe regulatory control an industry that has been a leader in making major, voluntary GHG emission reductions. This sends precisely the wrong signal to industry."

Although they aren't alway for early action:

"Fire Suppression - Replacement of high global warming potential (GWP) gases used in fire protection systems with alternate chemical(s): DuPont objects to inclusion of this as an early action item."

See how good they are? I've already accepted their premise of cap-and-trade and am now looking at problems of implementation!

Or not.

Coming up, more on DuPont, the lobbyists, opinions of people smarter than me and maybe a seance with Ken Lay.

Eco-Hypocrisy Corporate Style Part III