From naked capitalism, November 9:
Yves here. True to form, the US is willing to engage only in virtue signaling and marginal at best private sector enriching climate/energy schemes. We need war level mobilization and we need it yesterday. But the US does not do dirigisme, and our current leaders can’t manage their way out of a paper bag.
By Olivia Rosane, edited by Chris McDermot. Originally published at EcoWatch
The U.S. is set to unveil a plan at COP27 for private companies to fund the renewable energy transition in exchange for carbon credits.
U.S. president Joe Biden’s climate envoy John Kerry has reportedly been speaking with private companies and national governments to build support for the idea. It is slated to be announced at the UN climate conference in Sharm el-Sheikh, Egypt, on Wednesday, people familiar with the matter told Reuters.
“One of the things we’re looking at is the possibility of the private sector, in effect, being enticed to the table,” Kerry said last month, as the Financial Times reported. He added that money would be siphoned “directly into closing down some coal plants and acquiring renewables, which is direct emissions reduction.”
The plan, first reported by the Financial Times on Sunday, would see either regional or national governments amass carbon credits by shutting down fossil fuel infrastructure like coal-fired plants and replacing it with renewable energy. Private companies could then purchase these credits to offset their greenhouse gas emissions. The scheme would be voluntarily and would be certified by an independent entity still to be determined.
The purpose of the plan is to provide an incentive for private companies to help fund the renewable energy transition in poorer countries, The Washington Post reported. Fossil fuel companies would not be allowed to participate, according to Reuters.
The plan has many potential weaknesses. For one thing, carbon offsets are already controversial because they give companies a license to continue polluting without any real guarantee that an equal amount of carbon will be drawn down from the atmosphere to compensate. In this case, a company purchasing carbon credits from a coal plant turned into a wind farm, for example, would only truly offset its emissions if the transformation would not have happened without its assistance.
People familiar with the plan told the Financial Times that it currently lacked the details that would make its offsets mechanism robust.
“[Carbon credits are not] the kind of thing you can have half-baked. The rules matter, the details matter,” the anonymous person said. “There’s no easier way to get people angry than to throw offsets into the mix.”....
....MUCH MORE
In 2009's "Climateer Investing on Carbon Trading and Traders" I put together another admittedly incoherent post on what carbon trading was all about:
Our preference is "Cap-and-Tax (auction) with 100% Rebate" not Cap-and Trade.
The post immediately below, "Richard Sandor, Barack Obama and the Founding of the Chicago Climate Exchange (CLE.L)" got me to thinking about the carbon markets.
Proponents repeat the mantra that cap-and-trade is a "market based 'solution'". This is, of course, nonsense.
Just as an economist using the tools of science (mathematics) doesn't make economics a science, carbon traders using the tools of markets doesn't make carbon trading market based.
The carbon markets are an entirely artificial construct, beholden to political paymasters for their very existence. Which may be why so many political types are planning to profit from them.
Directly, think Al Gore's Generation Investment Management's investment in carbon project developer Camco or Lord Nicholas Stern's Vice-Chairmanship of IDEACarbon's parent IDEAGlobal or indirectly as a source of campaign contributions for pols still in office, or an unaccountable slush fund in the case of the U.N.
The word artificial led me to think of it's cousin, artifice. Here's the Oxford Pocket definition:
ar·ti·fice n. clever or cunning devices or expedients, esp. as used to trick or deceive others: artifice and outright fakery.The securities attorneys among our readers will recognize the word from the common state security law usage "...employ any device, scheme, or artifice to defraud".
Coincidence?
Here's the view from Russia, quoted in The Bored Whore of Kyoto:
"I don't know if climate change is caused by burning coal or sun flares or what," said the Moscow-based carbon cowboy. "And I don't really give a shit. Russia is the most energy inefficient country around, and carbon is the most volatile market ever. There's a lot of opportunity to make money."Here's a former Goldman Sachs trader:
The whole reason for the existence of traders is to make as much money as possible, consistent with what's legal...I lived through this: if you didn't manipulate the market and manipulation was accessible to you, that's when you were yelled at.Here's Lord Stern at the Bali Climate Conference where the largest NGO contingent were the gang from the International Emissions Trading Association, 336 representatives including lawyers, financiers, emissions traders, consultants, certifiers and emissions trading experts... the IETA made up 7.5% of the 4483 Non-Governmental Organisation (NGO) delegates registered for the U.N. shindig:
-Former Goldman Sachs trader
New York Times, May 8, 2002
“Bali will set in motion a process that will define the structure
of the carbon markets for decades to come”
“By 2020 the global carbon market could be worth EUR 240-
450 billion”
-Sir Nicholas Stern"This (climate change) is much too important to leave to environment ministers"I'm with David Sokol (Chair, Berkshire Hathaway's MidAmerican Energy Holdings subsidiary) regarding the trade part of cap-and-trade:
-Sir Nicholas Stern
to Finance Ministers basking in Bali
Berkshire Hathaway's MidAmerican Energy on Waxman-Markey: "We Don't Much Care For It" (BRK.A)
And here's a post from 2007:
"When Britain decided to end slavery,
Wilberforce didn't set up a cap-and-trade system"
That's me, misquoting myself.
Sometimes I find my fellow capitalists repulsive. When they lobby for political favors, then turn around and blandly refer to the result as an example of free markets I don't know whether to laugh, cry or attempt to destroy them. Laughing is probably the healthiest response, world domination the most challenging.
I've been looking for examples to skewer CO2 cap-and-trade.
One thought problem was how to end slavery.
Another was Nuclear weapons proliferation. Think about it.
Mr. Consultant comes up to you and says "The market based system of capping production and handing out allowances to produce nukes, which can then be traded, is the only rational approach".
Don't think too long though, lest you enter "Le Théâtre de l'Absurde". Trust me, the world of Jean Genet and Sam Beckett gets old fast, Pinter and Albee's, faster....
