Hot air ain’t worth what it used to be;
In July, the right to spew out one tonne of CO2 from a chimney would have cost a power generator E29.33, but yesterday it could be bought for only E18.25 ($34.14).
The sudden collapse of the carbon price mirrors the rout in the wider commodity markets. Carbon peaked in July, its price summit occurring within 10 days of the peak in the crude oil price.
Since then, everything from steel to potash has been tumbling and you might think it unsurprising that carbon has tracked the general retreat. Hedge funds and other financial investors dabbled in EUAs as they fiddled with palm oil and soya.
The rush to convert hedge fund investments into cash and US Treasury bills has resulted in rapid closure of positions on various carbon exchanges.There is a wider question about the ETS that must be addressed, and that is whether it is a sensible mechanism to regulate carbon.
[…]
It’s a measure of the speed at which politics moves in response to market prices that the green agenda has almost vanished from media political chatter.
Carbon’s falling price spells companies going bust, the loss of jobs and the shredding of political reputations. Over the next year, no politician with re-election hopes will back a policy that would triple the price of carbon for industry and raise consumers’ energy costs.
Any bets on how long before Gore and Strong (pdf) join the federal bailout bread line?
Kate,
For someone who argues that western farmers should be allowed to sell their grain in free markets, it seems odd that you now apparently oppose such markets. We allocate everything from crude oil to sexual services in markets with prices. Why not CO2 emissions?
Now then, what should the price of CO2 emissions be? I don’t know exactly but zero strikes me as very cheap. We have in the past underpriced the environment.
August 1991-
A coerced market is NOT a free market. As for pricing CO2, try to sell it.
IanV
It’s not a market. It’s rent-seeking.
In order to counter this upcoming recession, I am really considering starting a site like this one.. http://www.carbonplanet.com/shop/purchase_carbon_credits
Can anyone let me know if it’s illegal just to grab the cash the way they do? No mention anywhere where the $$ go…
B. HOAX AWARE
“We allocate everything from crude oil to sexual services in markets with prices. Why not CO2 emissions?”
Is August 1991 an indication of your age?
Markets and prices involve things people want to BUY. The notion of selling carbon “credits” is a scam at best, outright ridiculousness at the worst.
Let’s see, how does this work: charge emitters of X byproduct to encourage them to stop. In fantasyland, Y years later, X byproduct is no longer emitted. Whoops, revenue source for so-called “scientists”, enviromentalist evangelists and paper-pushers gone.
No worries though, there’ll be yet another enviro-scare on the back burner prepared to kick in (I’m guessing fresh water).
See how fast reality hits when you can’t afford fantasies. The silver lining is we won’t have to here the Goreacle cackling away every day. It just may break up the ice storms that follow him. Gardening is gonna make a come back.
Rent-seeking?
By that logic, I suppose a wheat producer in Saskatchewan is also a rent-seeker.
It just seems to me that whether land, oil, water, my time or the environment, people should pay for its use.
Yeah August1991,
But the trick is to really understand what that use is, and whether you are paying for just use or for just a scam – seems you don’t quite get that part (wanna buy some land in Florida – it’s really nice…no kidding…trust me)
I just do not understand how CO2, carbon dioxide, a gas that we exhale, the stuff plants and trees breathe, a gas that only comprises .0035% of the world’s atmosphere is a danger to the environment.
But I guess my real problem is maybe I don’t know how to scam people…..
Selling carbon credits is like the Church selling indulgences.
“The Roman Catholic Church claims the power to excuse or release persons from all or part of the suffering coming to them in purgatory. This is done for good acts performed or prayers said. In the middle ages, indulgences were granted in exchange for donations to the church. Thus the scandal of the selling of indulgences, which was a primary factor in bringing about the Protestant reformation . . . ”
“Such practices are incomprehensible to Christians outside the Roman Catholic Church (and to many within it as well).”
It seems that “the scandal of selling” carbon credits—a money laundering scheme—which is making such people as Al Gore, who owns a carbon credit company, and Mo Strong rich, while doing absolutely nothing to improve the environment, is now causing sheeple to “reform” their willingness to be brainwashed by these high priests of the Church of Gaia and their hypocritical acolytes in Hollywood and the MSM.
Get with it, August 1991!
CO2 can actually be purchased as a bottled gas. I have a tank of it in the garage for welding, Argon/CO2 mix. Its also used in the food industry and other places as propellant, inert gas, and etc. So there is a price for CO2, but only in packaged form. The gas itself is pretty much worthless, what you pay for is the cost of bottling it up and handling the bottles.
To suggest there is a “price” for the gas that comes out of your mouth every time you exhale is to be drinking the Algore bong water. Call it what it is, a tax. A really insidious, damaging one.
Lets go over markets one more time shall we.
There is a myth that a market for anything is simply a collection of tents that pop up in a field like a midway at a carnival show.
A free market is one where price sets the allocation of resources and not through a centrally planned authority. However markets, to function properly, require the following;
1) A common legal system to support contracts
2) Certification that goods are what the are, or recourse to an authority when they arent
3) The ability to punish tose who engage in fraud or bad behaviour
4) Transparency of trading and trading mechanism
5) Related to 2) is disclosure, about the goods, the company or the seller
All of these point to two things, the need for there to be rules from a coercive authority and TRUST.
So back to your point August, your time, land etc and underpricing the environment. Your time is simply labour, its labour and it goes in the pool with other peoples labour as pretty much determined by supply and demand.
The earth and all its items are also determined by supply and demand with the exception that that nobody owned it in the first place. This is where the trick comes in for the first owner, but after that it becomes is there any value add (positive or negative) created. I agree pricing in a market is the right way to deal with it, but lets go back to the above. How in the world can you price CO2 on a worldwide basis when there is no regulation, no certification, no transparency, no recourse…..
Now to disagree with Kate slightly, the collapse in prices will be used by people to justify te LOW LOW costs of carbon trnasfer, “indulgences are now half off!, save your and your families soul for the what it use to cost to save just your, limited time offer from Discount Luke”
I will still point to whether it is a real market. If you are to do it, you would set it up within a country only, where you can control it and then make deals with other trusted jusrisdictions….oh my goodness that sounds like a Cap and Trade system.
Of course then there is the issue of whether or not CO2 is a bad thing anyway, or how bad a thing it is.
The problem with letting the econo religous faithful run market solutions is they don’t know what they are doing. One wonders how big a hit Al Gore has taken if he was part of a hedge fund selling carbon credits. Remeber Hedge funds use extreme leverage to maximize their return on capital on their betting slips. If carbon prices collapsed and their bets are called as they would be, then they have to pay out at less than favourable prices. Is this really waht enviromentalists wanted, although I would love to see a Goreacle compnay go t1ts up.
As for the Wheat Board, go back to the definition of who sets the price. The question is will farmers have the fortitude in a falling price regime to stick with a market or will they, as has been the history, retreat back to managed sales when prices are low…rational but hardly morally consistent behaviour. It will be interesting to watch.
So please tell,Mr.August,how the hell does your paying a scam fee(carbon credit)offset the fact that it has ALREADY been produced?Tell you what.I just exhaled,please send me 50 bucks to offset my CO2.But then,as Barnum said,there’s one(or two) born every minute.
If you stand outside naked for 12 hours at +30C you will probably get sunburned and dehydrated but you will survive. Stand outside naked for 12 hours at -30C and you will die. I’ll take my chances with global warming anyday.
“Lawrence Solomon: Green market risk
Posted: November 07, 2008, 7:53 PM by NP Editor
Lawrence Solomon, carbon trading
If you think the causes of the financial crisis are complicated, just wait until we start trading carbon
By Lawrence Solomon
Think that the causes of the current financial crisis are hard to figure out? Think that the Wall Street wizards went too far in creating sub-prime mortgages and asset-backed papers and hedges and off-setting derivatives and other financial instruments that few understood on their own, whose value no one could easily establish, and whose interactions no one on this planet could ever figure out, except maybe in theory? Think that central bankers have lost control of their currencies and that they are flailing about, as clueless as to what needs to be done as the governments that throw rescue package upon bailout package at the crisis, hoping that something, somewhere, somehow, will stick? ”
rtr @ http://tinyurl.com/5c4s4e
The price of (hydro)carbon in Victoria is 95.9 per litre, down from the robbery of 152.9 in the summer. That’s plenty expensive. Any coincidence that the extreme price of gas/oil was the catalyst in our current economic mess? Not the reason, but the ‘tipping point’!
A good explanation I read
“Buying carbon credits is like A fat man paying a skinny man to go on a diet for him”
And on top of all that, it is snowing on Mars!
But Ssshh, don’t tell anyone.
Canada helps find snow on Mars and then hushes it up
Keep your eyes on Mo Strong, always a good idea.
His connection to Bob Rae should give pause for thought too if Rae ever gets close to power.
Power corps, Mo Strong, Bob Rae, OMG!
Incidentally, all of this presumes an industrial (carbon producing) sector that can -afford- to pay for a brand new “cost”. As in, they have sufficient profit margin that they can pony up $30 a ton or whatever for their CO2 output.
Today’s Drugde Report has Nancy Pelosi’s gnarly mug with “SAVE THE CARS!” under it in red. Not even the DemocRats are fool enough to keep pushing this carbon tax crap at this time of financial meltdown. If the nassssty Imperialist earth destroying car companies go bankrupt, and they absolutely will without a big time bailout from the taxpayers of the USA -and- Canada, your very own personal ass is going to be in a world of hurt, Mr. August1991.
Me, I kinda like strawberries in January, so I think any damn fool ideas like Miss Dion’s Green Shaft, Algore’s carbon scam, and all this global warming FUD should follow gun control into the manure pile of tried-and-failed Leftist policy.
Phantom
I don’t know which scenario is more distasteful.
Option A—-Let the companies blow in the wind. Let them figure it out without government assistance. Job losses would be huge, both in the direct, overpaid CAW sector, and in the contracted private sector. The economic ripples would just add to the already crippling effects of the subprime mess, particularly inwhats left in the manufacturing belt.
Option B—-Government provides some kind of bailout, after all, that is the trend right now, corporate welfare. If that happens, it should come with strings attached…..minimum 25% paycut (and bennies) to the CAW and white collar types. Better to make 75% of what you used to make, than 100% of nothing. There will still be job losses, and the whining will continue from the CAW types (so what!)
Either option is a pyrrhic victory……
August1991
In economics, rent seeking occurs when an individual, organization or firm seeks to make money by manipulating the economic and/or legal environment rather than by trade and production of wealth.
By that definition, a wheat producer in Saskatchewan could be accused of being a rent-seeker (at least those that support the board as monopsony), but not a very good one. The Wheat board’s actions are detrimental to the economic well being of all farmers captive in its grasp.
Also by that definition, the trade of carbon credits is also rent seeking, a trade that is destined to collapse utterly as the AWG nuttiness fades to its proper demise.
Oops, make that AGW (Anthropogenic Global Warming).
“Over the next year, no politician with re-election hopes will back a policy that would triple the price of carbon for industry and raise consumers’ energy costs.”
I’m thinking Premier Gordon Campbell isn’t on the memo mailout list.
DanBC
and add in some CONTROLS for the union A-holes
as I read several items this morning on the auto mess, it became very clear that the finger constantly pointed to unions, and management, instead of dealing with these fools (unions) simply took the easy route out, and focused on the market were they could compete even with the high labour costs of production imposed on them by union contracts. Even tho the unions realized their errors a few years ago, their action to correct said error was too little too late. To develop new products to compete with the Japanese takes time and money, as well as determination. The former are now non existent.
Thusly I think that unions should have regulations (man I hate admitting this) to control their “mandate”, they should take an over all view of that which they effect, not just an employee’s (self interest) position, and forced to stay out of politics all together, as each individual can represent their own in politics, they do not need a company or a union to do this for them.
And scrap all carbon trading BS!!!!!
By that logic, I suppose a wheat producer in Saskatchewan is also a rent-seeker.
Posted by: August1991 at November 9, 2008 3:19 AM
Ah, but you see, the difference is, you can eat wheat. And in one form or another, we all do. Farmers are, what shall we call them, oh yes, essential to life.
DaninVan
Greetings fellow Left Coaster
What is our alternative? Ms Value Village and her fellow travellers?
I can’t figure out what happened to Campbell, other than a Vulcan type figure has given him a mindmeld, and injected leftwing ideology into his once, straightforward, positive economic thinking. Now we have the choice, in May 08, of the new center-left Gordo and his followers, or the Moonbats with Carole James et al.
What is a center-right taxpayer to do? Go fishing, get drunk, or lock myself in the house on election day, not sure. Still don’t know what the BC Conservatives stand for, but they may be a default choice. The old shell of the Socred party, still appears to be a hobby run by fundies.
I’m scared by the future of this province, as there doesn’t appear to be any qualified, straightforward, logical party with any kind of economically sound agenda in the running. Just the alternative of the Leftards who learned nothing from the 90’s, and want to start where they left off when they were trounced from office.
Why do right-wing parties always seem to lose their way in the second term of office?
DanBC: I agree. I have no one to vote for here in BC.
Any bets on how long before Gore and Strong (pdf) join the federal bailout bread line?
Do you mean did they ever got off the eternal federal the money merry go round? Nice to see people are actually thinking about this, since they observe there own checks shrink over a made up fairy tale for research bucks, with power to the UN, to suck the Western democracies dry.
How quick people forget the oil for food scandal.
I hope Harper tells Strong to take a hike. He & his cronies invented this con , let them ride it out.
Inflation cannot go on forever. The more we try to beat this the harder in the end the pain will be. Better the dead weight of losing businesses die like diseased tree’s in a forest. Without the burn off no new growth can happen.
“Why do right-wing parties always seem to lose their way in the second term of office?”
Power corrupts, and power corrupts lawyers absolutely.
The wheels fell off right here: “It just seems to me that whether land, oil, water, my time or the environment, people should pay for its use.”
No other living creature gets charged to live here. Why should we…?
***It just seems to me that whether land, oil, water, my time or the environment, people should pay for its use.***
All of that presupposes an owner/provider to be paid. Who owns the environment? Hint: every answer to that question I’ve ever heard devolves down to a nonexistent entityt: God, Gaia, society/all of us. “The government” would be a more honest answer, but it ought to be clear what sort of society vests ownership in government.
***Why do right-wing parties always seem to lose their way in the second term of office?***
Because they imagine themselves to be protectors of freedom and individual rights, and they aren’t. It’s easier to maintain that pretense in opposition.
This is the best comments section I’ve seen for any blog in recent memory. Wow!
For the small fee of $500 per month, I will fart into a bag and sequester the Evil, Earth-destroying gases. Pay me now and save the planet.
It’s for the children!
“It just seems to me that whether land, oil, water, my time or the environment, people should pay for its use.”
We already do, it’s called property taxes, excise taxes, etc, etc…..why do the leftards think that taxes are the solution to -their- problems?
Since we are now in a cycle of global cooling (that’s actual measurements, not religious beliefs) I’m going to start selling carbon debits. Y’all send me a bunch of money and when I think I have enough I’ll go cut down a tree. I’m going to need a lot of firewood if this cooling continues so please be generous.
***Why do right-wing parties always seem to lose their way in the second term of office?***
“Because they imagine themselves to be protectors of freedom and individual rights, and they aren’t. It’s easier to maintain that pretense in opposition.”
Seerak, that’s why the leftard parties ‘succeed’ in opposition, but not in government. They suddenly find out it’s much easier being an armchair quarterback, with no responsibilities, than it is to be the team owner.
In respect to my first Q, leftwing parties tend to rule as a more centrist style party first term, then wing off to the far left in second term, if they get that far. That was how the NDP of BC turned in the 90’s. Once Glennochio seized power from Harcourt, the party went ‘stage left’, and it was all downhill for BC from there, without -any- regret from the NDP. The average BC resident should remember, and have that ingrained in their memories. Unfortunately, a large portion of the electorate is basically, stupid, and has a terminally short memory.
We must always be aware, and even keep our own conservative representatives aware, that, absolute power corrupts, and power corrupts absolutely. They must stay grounded, and listen to their grassroots constituency, otherwise, you will witness what happened to the GOP in the states. They lost track of the grassroots, and the common man.
This is also what is happening to the BC ‘Liberals’. Campbell is not listening to the grassroots, in regards to his precious carbon tax, and his spending spree of the last few years. He has turned a 180 on the policies that were successful in the first term. My fear is that BC will once again turn to have not status, if the travellers are returned to power, thanks to a government that lost its way and direction as to what made it successful in the first place!
I have 98 BILLION TONNES of CO2 “credits” to sell. And I’ll sell them for only $2.98 a tonne. And I’ll even mail you a certificate for only $2.99 more. Anyone that thinks the globull warming scam is real is still wondering why the USSR failed.
I would be wary of M. Strong’s advice re cars…he has his own investment in Cherry. He is not interested in GM surviving for a number of reasons, takeover, prevention of trademark infringement etc.
Re what should be done. As with all things it should never be about subsidizing a job or a particular company. But there is something to be said for ensuring that infrastructure isnt removed based on subsidization in otehr jurisdictions….as well, the solution, sadly will likely involve the union either agreeing to roll back OR agreeing to writing contracts incredibly differently.
If you take all of GM’s and Fords assets and strip them of the liabilities and cost weights via unions, ie assume you just built the copanies from the ground up then you have an interesting company.
Sadly current equity and bond hooders will take it in the neck and the whole workforce from CEO to janitor will need ot be fired and rehired under different terms, mostly the long term pension and health obligations need to disappear.
Any government money or assistance needs to be about transition and not about propping up the same old same old. Its not like the overcapacity hasnt been seen a mile away, and it isnt like these are new problems.
Ford Motor was a 100% private company till the mid 50’s. Perhaps these companies need to be private again or owned by large controlling shareholders. Strategic decisions that might costs a years worth of earnings were continually delayed…..failure of management, failure of governence.
The compnaies need to transform, government assitance, if it happens, needs to be about that. Either that or let the car companies go into bankruptcy and rework their assets, it happened all the time in the airline industry…probably too often.
Quite frankly Canada has less to lose because we just make cars, we dont carry much of the management, design and strategy jobs.
Why the South Koreans can put a car on the road in Canada for 19,000 and Ford cant put an equivalent one for less than 25,000 is beyond me.
Bankrutcy, done the right way is likely the answer, sad to say. We are in a major major mess, and governments need to be strategic about what they do, and that may include goring the union ox….funny how government intervention isnt always what you want.
I went short on my shares of stock in the sex market and made a killing.
But I still want my bailout!
Meanwhile, Canadians discover snow on Mars.
http://www.nationalpost.com/news/canada/story.html?id=849267
/don’t eat the yellow stuff
Worried about the North American auto industry? Outlaw auto-industry unions.
Seriously. Minus the work rules, grievance procedures, featherbedding, and other nonsense that come with union contracts, GM/Ford/Chrysler factories will easily become as productive as the Japanese transplants, saving the companies in the medium term. Capital will accordingly flow in, both from investors and from foreign auto companies.
Admittedly, outlawing the unions unilaterally is a big, interfering step. In principle, the only thing that should be done is eliminate the legal concept of a collective bargaining agent that the plant owners must negotiate with. But the problem is the current unions have managed to be entrenched by current law; a fast, clean break is necessary, which can only be reached by outlawing the unions, instead of simply demoting them to unprivileged private clubs. Have the utter ban expire automatically in five years, with no restoration of the “collective bargaining agent” concept.
Great comments. I am not 100% sure, but believe that it is not work rules, but insurance and, above all, huge pensions, that keep US automakers from producing a cheaper car.
Great comments. I am not 100% sure, but believe that it is not work rules, but isurance and, above all, huge pensions, that keep US automakers from producing a cheaper car.
It appears to me that there is a lot better chance of global cooling than there is of global warming over the next century.Pity. I live in Minnesota and we were looking forward to some nicer winters. BUT where does that leave carbon credits.Will we need to encourage the use of aerosols and release as much CO2 as possible to warm the Planet.I give the left about two or three more years before they catch on to the real data on world climate, and another six months to figure out how to use cooling to screw the rest of us.Get ready,its already on the way.
It appears to me that there is a lot better chance of global cooling than there is of global warming over the next century.Pity. I live in Minnesota and we were looking forward to some nicer winters. BUT where does that leave carbon credits.Will we need to encourage the use of aerosols and release as much CO2 as possible to warm the Planet.I give the left about two or three more years before they catch on to the ral data on world climate, and another six months to figure out how to use cooling to screw the rest of us.Get ready,its already on the way.
Posted by: New Frontiersman at November 9, 2008 6:56 PM
Unfortunately, that’s a non-starter. You can’t deny people the right to associate and form unions, Frontiersman. Just like you can’t force customers to buy the overpriced products they make. People have to make the choice as to whether or not unions are worth it or not. When times are good, and unskilled workers are making $30+ an hour for easy work without cooperating with the company to improve operations, efficiencies, etc., why then unions rock, for the members.
However, when CAW labour stonewalling and lack of cooperating, coupled with high hourly wages, drive the price up on a vehicle that folks don’t wish to buy… then unions are a problem.
But in a free society, they deserve the freedom to learn these lessons on their own. And, too, the taxpayer shouldn’t be funding bailouts to fund this learning experience: unions need to truly understand their effect and place in 2008, and companies need to get rid of deadwood management that are likewise unsuitable to the marketplace. Neither a company or its outdated union have incentive to shift paradigms when the taxpayer continues to fund their obsolete thinking and operating practices.
If unions existed solely for their original purpose: guaranteeing workers a “fair” wage and preventing abuse by managers/owners, we’d be much further along today. After all, it was due to the practices of Henry Ford et al that caused unions to spring up; I’m not unsympathetic for folks who are mistreated by their employers.
However, unions spend far too much time today protecting and defending the lazy, obstinate, and those unwilling to change to meet new business challenges; that is more of a factor in their current mess than their wages, IMO.
And, too, idiotic government interference from bureaucrats who think they know more about building cars than the automakers: CAFE standards certainly come to mind as a good example. It’ be better to keep the government’s nose out of the auto sector and let the automakers build the types of vehicles people want, rather than force them to cobble together blocks that nobody wants.
BTW, I speak with a dozen years of management in the auto sector, plus nearly a dozen more in the unionized beverage sector, and I’ve had my share of working with unions (some great, some not-so-great).
mhb23re
at gmail d0t calm
It is all just a gigantic con job.
Years ago “someone” got a tax ruling in the USA that certain vehicles owned by self employed people were tax deductible. These vehicles just happened to be pickup trucks and their variants which were too large to be built on the production lines of Japanese companies. So SUVs became a license to print money but everyone knew the music would stop playing one rainy day. In the meantime, profits were enormous, strikes were rare, and the Japanese were left to build those reliable little loser cars for the little loser people.
While all this was going on, there was a small problem turning into a huge problem. No, not the product quality problem, the worker retirement problem. To be more precise, the lack of funds in the pension plans problem. The way out of this problem is a variant of the steelworkers pension problem. The part that remains the same is stick the taxpayers with paying the pensions while running the companies bulging with more government loans through the bankruptcy makeover. Then off they go with a clean slate, young workers, world beating technology from cutting edge engineers, and brilliant new executives ready to conquer the world.
Sounds like a plan. I kid.
I hear you, DanBC. I am also a BC resident, and am extremely unhappy with the Carbon Tax Liberals.
We’ve had an incredibly good “run” these last 5 years, up until the last several months. Politicians have had the good fortune of a strong economy to be able to drift into non-essential policy areas, to wit: carbon-tax environmentalism. AGW is but a theory, but the economy has been so strong, the pols have had an easy rid in pushing the green agenda.
I’m almost glad of the current financial meltdown. The politicians, the the largely stupid citizenry, are being forced to focus on the core elements of economic and social policy. The flotsam and jetsam of radical environmentalism is being rightly cast aside.
If Campbell and the BC Liberals had focused on principled economic policy, they’d have been ahead of this financial meltdown. Sadly, they followed the fad of modern day carbon “greenism” and are now scrambling to buffer the BC economy from global financial meltdown.