Tuesday, October 23, 2007

Risk in the Carbon Trade

Back in March we wrote:
Finally for investors in rent-seeking organizations there is the real risk that the politicians will change the rules. Heed the words of Sen. Simon Cameron (R&D!-Pa.): "The honest politician is one who when he is bought, will stay bought."

I was reminded of Senator Cameron by this story in the Guardian:

Labour's plan to abandon renewable energy targets
One of the main objections of government to meeting the renewables target set by Mr Blair is that it will undermine the role of the European emission trading scheme. This scheme was devised by the Treasury under Mr Brown and allows wealthy governments to pay others to reduce emissions. "[Meeting the 20% renewables target] crucially undermines the scheme's credibility ... and reduces the incentives to invest in other carbon technologies like nuclear power", say the papers.

How's that for a convoluted argument?
If we meet the renewable energy goal, we tank the carbon traders.
To which some might query: so what's the downside?
HT: the indispensable Energy Roundup
(50 comments on the Peak Oil posts yesterday,
like throwing red meat to the pack)