No offsets.
No honeypots for the politicians to dispense to their favored cronies.
And do the auction in an open-outcry pit. Only CEO's and above. Make 'em sweat for their money.
If a major corporation can do five year budget projections, they sure as hell can figure out how many emission permits they'll need for next year.
One more thing: No financial intermediaries. If there has to be secondary trading (there doesn't) an electronic platform would work just fine.
Cut the crap with the "we lower costs by making markets more efficient". We saw how that worked in CDS's, CMO's etc. Besides, the whole point is to raise prices to change behavior.
It took an oil price of $147/Bbl to change driving habits, that is the equivalent of $337/tonne CO2.
As Berkshire Hathaway's Charlie Munger said, "Think about it a little more and you will agree with me because you're smart and I'm right."
From Bloomberg:
Howard Lutnick, chairman of Cantor Fitzgerald LP, said that its U.K. carbon credits brokerage was a money-losing failure, with business projections based on dreams.
Cantor is suing Stephen Drummond, a former executive at the brokerage, in London for the return of $2 million it says it lent him while he was running the unit, CantorCO2e. Drummond is countersuing, claiming he was wrongfully dismissed in 2009 for failing to tell the company he was in talks with a competitor about a job.
Lutnick said on the witness stand today that since Drummond left, Cantor has been trying to turn Drummond’s operation into revenue.
“We can’t figure out how to make money from it,” he said. “The pipeline that Mr. Drummond talked about was a dream. None of Mr. Drummond’s projections came true.” The business was built on a “giant series of ifs,” he said.
CantorCO2e this year closed its London desk and shifted its business to the U.S., where it is hiring additional workers, as brokers lost share in the market for carbon permits and credits to the European Climate Exchange in London, the biggest bourse for emissions trading.
CantorCO2e and EcoSecurities, the competitor Drummond was in discussions with, both manage projects that receive Certified Emission Reduction credits under the 1997 Kyoto Protocol. JPMorgan Chase & Co. bought EcoSecurities last year for about $200 million. Drummond and Carlton Bartels formed CO2e.com in 2000 and merged it with Cantor’s environmental brokerage in 2007, according to a company website....MORE
