End times for carbon trading

Readers may recall this story this past week at WUWT: European Carbon Trading Hits Another Record Low.

It was a short lived record, beaten again the very next day.

Point_carbon_graphCapture

Today, from Reuters Point Carbon, a view of the end times for carbon trading:

EU carbon plummets 10 pct on German sale cancellation

18 Jan 2013 17:12

LONDON, Jan 18 (Reuters Point Carbon) – European carbon prices plunged by as much as 10 percent on Friday after energy bourse EEX cancelled a German auction for 4 million EU Allowances, citing a lack of demand.

See also this essay at WUWT: The carbon trading money tree

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38 thoughts on “End times for carbon trading

  1. Carbon trading, electric cars that are “clean”, windmills that need conventional power station back up, solar panels in the UK that need conventional power station backup, biofuels that lead to starvation of the local population, forest clearance to plant said biofuel crop, global temperatures unchanged for 16 years, weather forecasts that aren’t fit for purpose, forecasts of climate armageddon that keep being moved further and further into the future, predictions of deaf fish, alien invasion etc, etc, etc, etc!

    Welcome to the wacky world of Climate “Science”!

  2. Forgive my ignorance, but what governments are now requiring the purchase of carbon credits by private enterprises in order to expand their businesses? I haven’t heard of any. If carbon credits are not compulsory, then TRADING in carbon credits is purely speculative at this point. Why would anyone want to speculate on empty paper when there is real stuff out there to speculate upon?

    If it looks like a giant scam, then it is probably a scam.

  3. The future of carbon trading was doomed once the environmentalists realised that the only people who were benefiting from it were bankers.

  4. Al Gore has benefited from speculation, an essential aspect of capitalism that functions properly in an educated and skeptical market. See Charlotte Thomson Iserbyt’s The Deliberate Dumbing Down of America, a chronological ana of papers from the Thirties John Dewey to Outcome Based Education – that is succeeding as well illustrated here.

  5. The EU greenhouse gas trading system is only a joke if you are an economic sadist. If you enjoy extraordinarily high costs for electrical power and transportation, get excited about the loss of the remaining primary industry in your country, and get a thrill to live in a country with massive unemployment, you should be a fanatic supporter of a greenhouse gas trading system and/or a massive carbon tax.

    “More of the same,” was not the answer Mr Cameron was set to say, adding: “That will make our countries weaker, not stronger.” “People are increasingly frustrated that decisions taken further and further away from them mean their living standards are slashed through enforced austerity or their taxes are used to bail out governments on the other side of the continent (William: Tax payers are also frustrated with schemes to send tax dollars to corrupt third world governments to mitigate “climate” change or to pay for local green scams that do not significantly reduce carbon dioxide emission.),” he was intending to argue.

    William: The faceless EU/UN/EPA bureaucracy requires a crisis to justify its existence. A carbon trading and world carbon dioxide emission monitoring scheme is job creation for the faceless bureaucracy.

    “And yes, of course, we are seeing this frustration with the EU very dramatically in Britain. Europe’s leaders have a duty to hear these concerns. And we have a duty to act on them.”
    “The EU greenhouse gas trading system should be replaced with a carbon tax if the bloc fails to repair a system that’s “a joke the whole world laughs about,” Johannes Teyssen, chief executive officer of EON SE, Germany’s biggest power utility, said in an interview with Manager Magazine published yesterday.”

    The eurozone unemployment rate rose to 11.8% in November 2012 – the highest rate on record according to official figures out today.

    Up from 11.7% in October, the latest figure has caused some concern in the eurozone. Graeme Wearden writes today:

    German gross domestic product growth will slow to 0.4 percent this year from 0.7 percent in 2012, the Economy Ministry said in its annual report.

  6. Stonyground says:
    Sorry to be OT but the subject of the, probably faked, worm in the meteorite has popped up again at Pharyngula. When the name Watts appeared in the comments, I posted a comment, from memory:

    To be fair to Anthony Watts his post on this was very sceptical. Greg Laden quoted him selectively to make it look as though he wasn’t. Laden also made the claim that Watts deletes his comments which is untrue.

    I included a link to the rebbuttal of Laden’s accusation on this blog.

    I have been commenting on blog posts for many years now and, because I am always polite, avoid bad language and always abide by the rules, I have never ever had one of my comments deleted. Until now. Presumably, sticking up for an evil denier in a place reserved for true believing alarmists, even when he is absolutely in the right, is just beyong the pale.

  7. As with all scams and confidence tricks the art of making money is timing your exit.
    Al Gore clearly believes the bubble is approaching bursting point with his conversion to happily accepting the green dollars of just about the biggest oil producer he could find. The markets would appear to agree with him.
    No doubt the late comers to the trough, and the true believers, will attempt to drag out the endgame for as long as possible.
    Hopefully this is the beginning of the end and not the end of the beginning of the Carbon scam.

  8. janef20 says:
    January 19, 2013 at 9:39 am

    How will BBC pension-fund managers explain this to shareholders?
    =====================================================

    Investments can go down as well as up……………………..

  9. “The EU greenhouse gas trading system should be replaced with a carbon tax if the bloc fails to repair a system that’s “a joke the whole world laughs about,” Johannes Teyssen, chief executive officer of EON SE, Germany’s biggest power utility, said in an interview with Manager Magazine published yesterday.”
    =====================
    When his type says “tax carbon”, what do you think? Do you suppose that he feels certain that the tax will fall on the consumer and not on his profits?
    Well, yes, of course.

  10. jazznick (@jazznick1) says:
    January 19, 2013 at 10:35 am
    janef20 says:
    January 19, 2013 at 9:39 am

    How will BBC pension-fund managers explain this to shareholders?
    =====================================================

    Investments can go down as well as up……………………..
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
    Or,”we made some extremely poor decisions” !!

  11. Strange. The pressure put on us to accept Carbon Trading is supposed to reduce Global Warming. Yet it’s pressure and heat that changes carbon into something worth trading.

  12. As carbon trading is dying in Europe, California is just getting their cap-and-trade scam scheme underway in 2013:

    http://tinyurl.com/da3nmx

    California has already been looting the businesses that haven’t yet fled to less insane states; this should chase off the stragglers.

  13. Anthony, the sudden changes in this administration regarding energy, interior, epa and the bonneville power administration are indicative of a full court press for a carbon tax or it’s equivalent. This has been an ongoing issue since the financial crisis of 2008. There are quite a few players (albeit unknown to most) here and lots of links to China. I will post my latest in ‘tips and notes’ and assure you that things come a bit more into focus. I would like to thank the people who took the time to view my previous work, (links articles), in tips and notes and really appreciate Anthony and mods for allowing me to do this.

    Thanks again for all you do!

    john from DB.

  14. jbird says:
    January 19, 2013 at 9:23 am

    Forgive my ignorance, but what governments are now requiring the purchase of carbon credits by private enterprises in order to expand their businesses? I haven’t heard of any. If carbon credits are not compulsory, then TRADING in carbon credits is purely speculative at this point. Why would anyone want to speculate on empty paper when there is real stuff out there to speculate upon?

    I can’t speak for the EU system, but here in New England and three other states any electric power producer using fossil carboniferous fuel and producing more than 25 MW (or something like that) has to purchase CO2 allowances. These are available either at auction or a speculative market. Problem is, the shift to natural gas, the recession, less attractive manufacturing environment, etc. have meant that recent auctions are undersold, so all the sales have been at the floor price, last year it was $1.93 per short ton. The speculative market has been a few cents below that. No windfall profits here!

    See my http://wermenh.com/rggiwatch/index.html for more.

  15. Ric Werme says:

    January 19, 2013 at 11:31 am

    Thanks for the update Rick. I still see a push here and GE/First Wind/UPC (and all the shell and shelf LLC’s associated with “the UPC Family of Companies”) are coming into the picture at light speed. It’s Enron all over again with the same Enron players as before. You should also note that larger media like Bloomberg, have received the ‘Wind Made’ certification. So you can expect more media spin.

    http://www.treehugger.com/corporate-responsibility/bloomberg-becomes-first-news-organization-windmade-certification.html

    Stay tuned for what I have and will post in ‘tips and notes’ (after a little editing) and see my comment above.

    john from DB

  16. janef20 says:
    January 19, 2013 at 9:39 am

    How will BBC pension-fund managers explain this to shareholders?
    ——————————————————————————————————————-
    They will crank up the heating in the room during their next annual meeting and insist that all is well.

  17. For this to happen to such humanitarian philanthropists not interested in monetary gain is indeed a travesty. I weep for their bank manager’s potentially losing their second homes in paradise.

  18. Netherlands suspends U.N. emission project approvals
    LONDON, Jan 18 (Reuters Point Carbon) – The Netherlands will not approve CO2-cutting projects submitted by Dutch firms seeking U.N. carbon credits until new rules under the Kyoto Protocol become clearer, the country’s emissions registry said on Friday, dealing a further blow to investors…

    http://www.pointcarbon.com/news/1.2144128?&ref=searchlist

    ArcelorMittal, Belgium’s Wallonia go to court over CO2 permits
    LONDON, Jan 18 (Reuters Point Carbon) – Steel giant ArcelorMittal and Belgium’s Walloon government are locked in a bitter legal battle over 8 million euros worth of EU carbon permits, a government spokesman told Reuters Point Carbon this week…

    http://www.pointcarbon.com/news/1.2144138?&ref=searchlist

    ——————————————————————————–

  19. Looks to me that all the rats are deserting the sinking ship that is CAGW in droves. To paraphrase one of the warm-mongers – I can’ t remember which one – “In the end they will all disappear quite quickly”. Mark “death spiral” Serreze I think it was.

  20. If Germany is shifting from nuclear to coal, why aren’t they soaking up all the carbon credits and spiking the price?

  21. “They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”
    Benjamin Franklin

  22. janef20 says:
    January 19, 2013 at 9:39 am
    How will BBC pension-fund managers explain this to shareholders?
    ————————

    It warms my heart to think of all those BBC climate activists looking forward to their retirement years eating canned dog food and shivering in their windmill powered homes. To quote star trek – revenge is a dish best served cold.

  23. jbird says:
    January 19, 2013 at 9:23 am

    Forgive my ignorance, but what governments are now requiring the purchase of carbon credits by private enterprises in order to expand their businesses?

    What is clear is that “carbon quatloos” prevents any “expansion” so self limits to zero price…

    http://memory-alpha.org/en/wiki/Quatloo

    Any business with a brain will do NO “expansion” in any location with a carbon {tax, fee, trading scheme, indulgence, allowance, …} and will instead head off to China or Texas at the most economical pace. (That is, fast…)

  24. Somewhat OT; How is it that “Green Power” generated electrons are separated in power transmission lines?

  25. Thanks for the responses to “…what governments are now requiring……?” This is pretty scary stuff. No one with a brain would ever support the idea that taxes can solve a (nonexistent) problem. It’s really quite insane. Hence, the only real supporters of this nonsense must be the financial elites who wish to create another false currency (carbon credits) in which to speculate, invest and leverage their vast fortunes. Their government handmaidens find it attractive because they have overspent to a point where they need to get money anywhere they can.

    I doubt that most people really understand any of this.

  26. A carbon allowance is equal to one tonne of carbon dioxide emissions.

    The European Union Emissions Trading Scheme is mandatory for thousands of power stations, Industrial plants, airlines and other energy-intensive industries in the EU. Such industries are legally obliged to buy carbon allowances to cover their annual allowance as imposed by their governments based on their historical carbon dioxide emissions.

    Total carbon dioxide emissions for the year must be reported by the participants to their respective national authorities at the end of every year. The companies must then surrender to their governments the allowances they have been forced to buy to cover their emissions. The allowances are then cancelled. They can sell any surplus allowances.

    If a company fails to buy enough allowances to cover its emissions it will be subject to a heavy fine and be compelled to make up the shortfall in future years.

    However the European Union has estimated that there will be up to 2 billion surplus EU carbon allowances in 2013 causing them in effect to be worthless.

    However the European Commission is considering several ways to rig the market in order to artificially raise the price:
    “1. Increasing the EU’s greenhouse gas emissions reduction target for 2020 from 20% to 30% below 1990 levels;
    2. Retiring a certain number of phase three allowances permanently;
    3. Revising the 1.74% annual reduction in the number of allowances to make it steeper;
    4. Bringing more sectors into the EU ETS;
    5. Limiting access to international credits;
    6. Introducing discretionary price management mechanisms such as a price management reserve.”

    http://ec.europa.eu/clima/policies/ets/reform/index_en.htm

    In essence it is a way to conjure money out of nothing and dramatically increase costs for those industries legally bound to participate, which they inevitably pass on to customers.

  27. mfo:

    In your post at January 20, 2013 at 7:42 am you say

    A carbon allowance is equal to one tonne of carbon dioxide emissions.

    The European Union Emissions Trading Scheme is mandatory for thousands of power stations, Industrial plants, airlines and other energy-intensive industries in the EU. Such industries are legally obliged to buy carbon allowances to cover their annual allowance as imposed by their governments based on their historical carbon dioxide emissions.

    Total carbon dioxide emissions for the year must be reported by the participants to their respective national authorities at the end of every year. The companies must then surrender to their governments the allowances they have been forced to buy to cover their emissions. The allowances are then cancelled. They can sell any surplus allowances.

    If a company fails to buy enough allowances to cover its emissions it will be subject to a heavy fine and be compelled to make up the shortfall in future years.

    And later in that post you say

    In essence it is a way to conjure money out of nothing and dramatically increase costs for those industries legally bound to participate, which they inevitably pass on to customers.

    Not really. Nothing is conjured our of nothing.

    The EU ETS is merely a tax on industries which emit CO2 and – in common with all taxes on any industry – the cost is passed on to customers.

    Richard

  28. Stimulated by this post, I have spent the last few days hunting the web to try and make sense of carbon trading. As of now, I have more questions than answers. So maybe someone here could help?

    Let me disregard for a moment that CO2 may not need regulation any more than water vapor (which is after all a greenhouse gas, produced in abundance by the activities if human beings, and mostly beneficial).

    What I found out so far:
    It seems that pollutant trading is actually an American idea and seems to have worked well for lead in gas and sulfur in emissions. The idea is to put a price on the emission of the pollutant. It is, in essence, a tax. Because of the trade component, the primary cuts of the pollutant will be made in those industries who can do this for the smallest cost. It seems that the European cap and trade has many problems, because individual national interests have distorted the initial set-up, to make it ineffective (for example, Germany got all the credits it needed from dismantling and rebuilding the antiquated infrastructure of what was East Germany – which it would have done anyway). The cost for carbon trading cannot be measured simply by adding up the dollars paid for higher prices of fuel, electricity and consumer goods, as the revenue generated by selling carbon credits finds its way back in the economy. 

    My questions:
    1. How much of the total cost for carbon trading to a society is due to a bloated additional bureaucracy to administer the whole thing?

    2. In the case of California, where will the tax revenues from carbon trading go?

    3. How do various states / countries go about making this tax non-regressive?

    4. What percentage of the world’s population must participate for this to make a dent in CO2?

    5. What is the estimated real cost per year per person for California?
     

  29. Ric Werme says:
    January 19, 2013 at 11:31 am

    I can’t speak for the EU system, but here in New England and three other states any electric power producer using fossil carboniferous fuel and producing more than 25 MW (or something like that) has to purchase CO2 allowances. These are available either at auction or a speculative market. Problem is, the shift to natural gas, the recession, less attractive manufacturing environment, etc. have meant that recent auctions are undersold, so all the sales have been at the floor price, last year it was $1.93 per short ton. The speculative market has been a few cents below that. No windfall profits here!

    ==================================================================

    I am sure you know this already, Ric, but just for this forum I wanted to mention that the only reason the allowance price is at $1.93 per short ton is because it is the reserve price, they can’t sell it any lower in spite of the glut of unsold allowances.

    One more point: When the market report is issued, they point out the CO2 savings due to the energy use improvements done by the government spending the money. The first year, the State of Massachusetts spent over $1,000,000 on solar heating for community swimming pools! Sounds like a tax to me. And I can assure you that at less than $2 per allowance, power generators are not spending a dime on equipment that would reduce their CO2 emissions, which was not the intent of the program when it was adopted. One teeny-tiny change in a power plant can have much more impact on CO2 emissions than all the solar heated swimming pools in New England.

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