From the University of Edinburgh
Free market is best way to combat climate change, study suggests
The best way to reduce carbon emissions and combat climate change is through the use of market forces, according to a new study.
Researchers who monitored the effectiveness of the European Climate Exchange (ECX) – the world’s biggest carbon trading platform – found it to be as efficient as Europe’s two biggest exchanges, the London Stock Exchange and the Euronext Paris.
Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide.
The report found that the value of the trades on the ECX were higher after the market closed, a sign of growing sophistication within platforms. It means that trades were made with greater confidence based upon increasingly detailed information.
Researchers said there are also signs of maturity based on increased liquidity – the immediate availability of a party to trade with – and price efficiency, which means all available information is incorporated into prices so they are traded in a relatively transparent manner.
The ECX was created by the EU Emissions Trading Scheme (EU-ETS) in 2005 to help the European Union (EU) achieve its obligations under the Kyoto Protocol to reduce carbon emissions.
The EU set limits and issued permits for how much carbon firms could emit into the atmosphere. If companies exceed their limit, they incur regulatory penalties.
To avoid this, the EU-ETS allows firms with high emissions to buy the permits of other companies on platforms such as the ECX. By creating a market, it gave firms a financial incentive to reduce their carbon emissions.
Researchers said that changes are needed to ensure the EU-ETS survives Europe’s economic downturn. Since the study appears to confirm the ECX’s effectiveness, researchers say the EU-ETS should be allowed to self-adjust emission caps in reaction to changes in the Eurozone’s fortunes and industrial production.
Gbenga Ibikunle, from the University of Edinburgh Business School, said: “While individual responsibility for combating climate change is important, much needs to be done to incentivise companies – especially those who emit most of the world’s carbon – to cut back too. This study shows that free market mechanisms such as the EU-ETS can be effective in doing that. Several other schemes around the world are already learning from this and adopting it as a model.”
The paper is published in the International Journal of the Economics of Business.
A “free market” created entirely by regulation for something that has no market value? Count me in!
I like this idea, I will hold my breath for 30 seconds for only $100.
There is no solution required to tackle an imaginary non-problem. We need to look at ways to subsidize the emitters of carbon dioxide. This is a con job and I am not buying.
A free market for which there is a monopolistic suplier?
EU Emissions Trading Scheme, emphasis on “Scheme”.
The BIG BANKS have absolutely nothing to do with this con job. Sheesh! Just say no.
For $1000 I will not fly to New York, for $2,500 I will not fly to China.
move along people. . .nothing to see here:
http://www.ssd.noaa.gov/goes/east/eaus/flash-wv.html
or here:
http://home.comcast.net/~ewerme/wuwt/cryo_compare.jpg
You might talk to Willis about this. As Eli Lehrer (ex Heartland) of R Street points out
interesting, more cut off lows in eastern pacific
http://www.ssd.noaa.gov/goes/west/nepac/flash-wv.html
looks like surf is up in Hawaii. . .
and eastern atlantic
http://www.ssd.noaa.gov/eumet/neatl/flash-wv.html
seems to be a global phenomenom. . .
Carbon markets reward inefficiency – they’re communism in action.
Say two companies start by producing the same amount of goods.
They are both allocated the same number of carbon permits.
Then one company increases production, through aggressive marketing and cost cutting.
In a normal market, they take market share from their competitor – their reward for hard work is more profit.
But in a carbon market, they have just increased carbon usage. They have to buy carbon credits from their poorer performing competitor. Their reward for working hard and improving their processes is to pay a tax to their lazy, less efficient competitors.
Carbon markets are eerily similar to the “equalisation of opportunity” bills in the story Atlas Shrugged – schemes in which “costs” were shared according to criteria other than who incurred them, as a method of looting the productive and hard working.
I am willing to not fly to New York for only $900 and I will throw in three not-raised hogs.
(http://www.joke-archives.com/govt/notraisinghogsbusiness.html)
Why is Deutsche Bank interested in controlling the trace rise of a trace gas called co2? I am baffled and confused. Can someone please give me some information.
Ooops again. My last blockquote went pear shaped.
Oh, I should have mentioned that the reason it went pear shaped is because our electrical power went out…….again. Three bloody times this evening. This is what happens when you don’t live in a modern economy. I am working from the light of my monitor and can’t see the damned keyboard clearly. This is what it may mean for you one day. Just say no to these con jobs. I know the end result.
“Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide.”
Absolute blithering idiocy. A “free market” where the “product” is just certificates for hot air produced by one supplier and their use mandated by an unaccountable, unelected EU government?
As adding radiative gases to the atmosphere does not reduce the atmospheres radiative cooling ability, there is no need to control CO2 emissions. As to supplies of hydrocarbon fuels, market forces already control those. There is already a market for CO2 as an industrial gas. CO2 cannot cause dangerous global warming even if all known and projected hydrocarbon reserves were consumed. A market for the non-production of CO2 is an therefore an artificial construct that must be viewed as a ponzi scheme requiring the intervention of the courts or as a fraudulent tax negating the rule of law and authority of any government introducing it.
A true free market for the non-production of CO2 could be devised such that it was not a de-facto suspension of democracy or in breach of corporate laws. In such a market, “carbon guilt” businesses would produce and sell “carbon guilt” certificates bought by choice by those who believe in global warming. The guilt price per tonne would be set by market forces. Carbon guilt businesses would then spend the money from guilt certificates on alternative energy plants that were cost competitive with hydrocarbon power plants or research into other energy systems. Carbon Guilt businesses that charged too much per tonne or did not provide enough power plants to offset their customers guilt would fail.
I suspect that for a truly free market carbon guilt business the message from the market would be very loud and very clear. Ie: “Put a sock in it you trough feeding doom monger, take you BS brochures and get of my property this instant!”
As carbon dioxide has been shown to have no effect on climate a “free Market’ carbon trading system will have zero effect on the climate. It will make bankers and the original market creators rich at the expense of the energy users – and that is its aim. It has nothing whatsoever to do with ‘climate change’ which will continue however many unicorn taxes the politicians and bankers dream up. It is all a confidence trick to enrich politicians.
if this CO2 trading bubble ever gets going, watch out in case your retirement funds get invested in it, without your permission. meanwhile:
16 July: Bloomberg: Alex Morales: Each Degree Celsius of Warming May Raise Seas 2 Meters
Sea levels may rise by more than 2 meters (6.6 feet) for each degree Celsius of global warming the planet experiences over the next 2,000 years, according to a study by researchers in five nations.
The research, published today in the Proceedings of the National Academy of Sciences, attempts to iron out the impact of short-term fluctuations in sea levels, examining changes over a longer term for which forecasts are more certain…
“Continuous sea-level rise is something we cannot avoid unless global temperatures go down,” Anders Levermann, the lead author of the study, said by e-mail from the Potsdam Institute for Climate Impact Research in Germany, where he is based…
Researchers from Germany, the U.S., Canada, Spain and Austria also contributed to the study. They used computer models and analysis of past trends in sea levels derived from sediments and raised ancient shorelines to make their predictions…
http://www.bloomberg.com/news/2013-07-15/each-degree-celsius-of-warming-may-raise-seas-2-meters.html
See the ethanol mandated RINs by EPA if you want to see where this is all going.
Eli,
This has nothing to do with conservatives. It has to do with gullible morons (like you) who have not one ounce of scientific common sense. There is no climate crisis.. Our current climate is in no way unusual per the data.. You have your panties all in a wad over some minor late 20th century warming. Your “droppings” along the bunny trail is a perfect description of your musings. Rather than B.S., you engage in bunnysh*t. Same thing. I suggest you go back to school and try to understand the concept of the scientific method, which has nothing to do with politics. Your absolute stupidity in scientific matters is amazing.
What a con! Same as solar power panels cutting CO2., what’s that got to do with it! Subsidies push up the price for other consumers.
The carbon trading scheme has been a wet dream of Wall Street types for years. After all, these are the same people who have been trading “synthetic” CDOs (credit debit obligations) and derivitives for years. Synthetic meaning they don’t, in actuality, exist! You just take a real live CDO, and make believe there’s another just like it! Voila, a new “market”.
Even if one were to believe in the so-called wonders of the free market, how can it be a free market if the underlying premise, combating climate change, is a canard in the first place? How do you combat that which you cannot control? The hubris is breath taking.
Gee, why didn’t the designers of the catalytic converter think of that? Or the designers of the smokestack scrubbers?
The ultimate goal? (How do you tax the ocean and trees?) Enron opined their ideal in the early 1990s after their $20 billion/yr sulphur dioxide cap-and-trade profit was to find a way to do it to CO2. The problem was CO2 wasn’t a pollutant, so they had to figure out a way how to make it one. New Zealand investigative reporter Ken Ring exposed this in 2006.
Read the rest here:
http://www.investigatemagazine.com/archives/2006/03/investigate_oct_5.html
My electrical power went off this morning. That is a crisis. Carbon emissions and climate change is not a crisis.
The Bear quotes:
`Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide.’
Yeah, dream on. Stopped reading at that point. Another `world government’ fantasy.
It seems to me that every time I hear some loud spruiking of free markets, it is shortly followed by a bunch of people with nasty haircuts getting hold of wads of cash (from my tiny income and modest savings), and then a financial disaster in which I get totally screwed.
All of these people keep assuming that CO2 is causing climate change. It just ain’t so!
Game, set, match!!
SkepticGoneWild 🙂 appears to be more in a twist than Eli. Opinions vary.
This just might be a good idea, because market force might be the best mechanism to decide that carbon emissions don’t need to be reduced in the first place, and that dangerous AGW is not going to occur.
This kind of ‘accidental discovery’ when market forces are unleashed has happened before, e.g. when Gorbachev decided to introduce market forces and a greater degree of openness to improve and/or reform soviet communism-the result was the end of soviet communism itself. This was not intended, but it occurred because market forces found out that the system was based on fatally flawed foundations to begin with.
I would also argue that Christianity’s stranglehold on western society followed a similar pattern, although the process here is far less clear and more controversial; once Protestantism gained a foothold and rebelled against the authority of the Roman Catholic church, it unleashed a spirit of inquiry and individualism that eventually rebelled against the authority of religion altogether, as well as, according to the sociologist Weber, provided the driving force behind market capitalism itself.
Market forces are dangerous when one tries to use them for political purposes, they tend to turn against you, unless the reasons you introduce them are based on fundamental human realities to begin with.
Just think of how bad a bubble was created with asset backed commercial paper, debt obligations that actually had real tangible assets associated with them, and then consider how much of a bubble could be created out of carbon indulgences based on nothing at all.
Banksters are probably having wet dreams at the very thought.
There’s nothing “free market” by implementing these crazy carbon trading schemes. There’s no negative demand for air. Creating an artificial market and artificial demand is the antithesis of “free market” concept.
Of course, since CO2 or any gas at any concentration in the atmosphere cannot detectably warm the climate, carbon taxes or any other misbegotten effort to decrease carbon emissions WILL DO NOTHING. OUR CLIMATE IS NOT CONTROLLED BY CO2.
CO2 IS PLANT FOOD AND IT IS GREENING THE PLANET.
Controlling carbon is solely about controlling people.
It’s been so many years ago that I worked, briefly, behind a cash register that I don’t really remember it anymore. But, I suspect it’s a relatively mundane, unrewarding job. So, when I happen to be with my sister, my older sister, and she whips out that credit card (faster’n Doc Holloway can pull a gun) to buy something I decide to spice it up a bit for the cashier. I tell my sister quite loudly, “You’re not using that credit card are you!? It’s probably reported stolen by now!” Oh, does she hate it when I do that, which is why it’s so much fun to do. And it provides a moment of levity for the cashier.
But, when I’m alone at the cashier I have to be more creative. If I’m paying the bill with a piece of paper with a fairly large assigned (temporary) value and they hold it up to the light to check it I tell them not to worry; I did a good job printing it last night. But usually I’m not paying a big bill, so if I pull out, say a twenty, I employ a different line. I tell the cashier it’s really a two hundred dollar bill; they just can’t see the extra zero; but I assure them that it’s really there. Sometimes I tell them that that twenty dollar bill turns into a two hundred dollar bill at midnight.
Now here’s the thing. You, and the cashiers, and certainly I know that the foregoing is all a buncha bull poop. Now, the absolutely worst that could happen is that someone doesn’t find those shenanigans funny (such as my sister). But, usually the cashiers get a hoot out of it. Quite a few play along, handing me change that they assure me changes at midnight too.
Did I just write, ‘Now here’s the thing?’ Well, here’s the real thing. What if the foregoing wasn’t a description of just jokes that were being played by me? Just how well would it work if the cashiers really believed me? Handed me back change based on the magical, fictional values of twenties that would morph into two hundreds at the stroke of midnight? What is hard earned money worth then? Or, on the other hand, what if you’re not using magical money? You’re using real money? But buying things that don’t really exist except in magic. You can’t see it, touch it, hear it, taste it, or smell it. But, I assure you, if you give me good money for it it’ll magically turn into something at midnight. In the future. Now, what I was playing was an obvious joke. Well, sans that penultimate word; this scheme is too. I doubt it’ll lead to laughter though. More like tears.
The Chicago Carbon Market … Crashed.. Because the free market saw it as a fraud…
I’m all for letting the free market decide what is truly worthy of money spent.. No Government prop ups and watch what happens to the crap…
“Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide.”
Gotta love the way they use “free-market” and “mandatory” in the same sentence !!
jai says…
“looks like surf is up in Hawaii. . ”
wow.. like that’s NEVER happened before !! .. roflmao
you really do make some very STUPID comment jai !
Uhuh.
A mandatory free market!
“I like this idea, I will hold my breath for 30 seconds for only $100.”
And I have a piece of coal in my hand. For $50, I won’t burn it this winter.
The Michael Milken solution to saving the planet.
FANTASY LAND:
Carbon Credit “Free” Market is SO YESTERDAY, Gbenga. Edinburgh needs to get with it!
“EU carbon permits, which have plunged 88 percent since 2008, would need to trade at 10 times their current value of about 4 euros ($5.28) a metric ton to prompt utilities to switch to cleaner natural gas from coal, according to a Bloomberg fuel switch calculator.”
[Source: EU Should Move Beyond Carbon Market to Shut Coal, IEA Says, Mathew Carr & Sally Bakewell, June 10, 2013, Bloomberg News: http://www.bloomberg.com/news/2013-06-10/eu-should-move-beyond-carbon-market-to-shut-coal-power-iea-says.html%5D
TOMORROW LAND:
But, that isn’t stopping good ol’ Rudd:
“CANBERRA, July 16 (Reuters) – Australia’s government moved on Tuesday to scrap its carbon tax and bring forward an emissions trading scheme …that will be linked to the European carbon market … The conservative opposition has promised to scrap the carbon price altogether if it takes power, with opposition leader Tony Abbott dismissing the ETS as a ‘so-called market in the non-delivery of an invisible substance to no-one’.”
[Source: James Grubel, Reuters, June 16, 2013, http://www.reuters.com/article/2013/07/16/australia-carbon-idUSL4N0FM05620130716%5D
VOTE CONSERVATIVE! It MAKES SENSE!
I’m having some trouble understanding the game so I have some motivation speculation.
I have it as a given that this is a scheme whereby those families that own 99% of the western world can get another Log removal of whatever is left from us working sods. I just can’t see how trading smoke translates to profit, unless it’s a game of last person left holding the imaginary air gets to keep it, or if it is a way to drive up prices by creating an artificial scarcity (like Enron did with the rolling power outages in California a few years back).
I suspect that whatever the game is, the real winner in this will be China as they will continue to grow their economy as the rest of the great powers vie to out-shrink each other.
And who wins QUOTE OF THE DAY today?!!!
JAI MITCHELL!
“… move along people. . .nothing to see here… .” [Jai Mitchell]
Preeee-cisely. #[:)]
If we are to engage in battle with nature over the climate I respectfully ask we have an end-game plan, that we clearly identify our goals, state the conditions that define our success, and method disengagement. We should define rules of engagement that are acceptable to all sides in the ensuing conflagration, and the extent of collateral damage to innocent non-combatants that are acceptable. If our success is defined as arresting climate change at some condition or range of acceptable variation we must give all nations a say in what that climate shall be.
Or maybe we should just say WTF are we thinking? This is crazy!
dp: Nicely stated. Couldn’t agree more.
[LOTS of excellent comments above, every, er, well, JUST about everyone, (cough)!]
Great battle strategy analogy.
Enron was fraud, fraud, fraud. How could anyone believe that this scheme could possibly be different?
The carbon market crashed already. They’re trying to dress it up and put it back out there. Free market? Mandatory? When are they going to learn?
When THIS bubble bursts, it’s going to make one heck of a KABOOM!
Free market as in forcing or subsidizing businesses to produce or purchase a product.
A mandatory “free” market with quota’s to artificially prop up the price.
STRASBOURG/LONDON, July 3 (Reuters) – The European Parliament after months of bitter debate backed a plan on Wednesday to boost carbon prices, throwing a lifeline to the EU Emissions Trading System (ETS) and the bloc’s push for greener energy.
EU politicians in Strasbourg voted 344-311 in favour of temporarily removing up to 900 million permits from trade, tackling oversupply that has sent carbon prices to record lows.
To avoid this, the EU-ETS allows firms with high emissions to buy the permits of other companies on platforms such as the ECX. By creating a market, it gave firms a financial incentive to reduce their carbon emissions.
and then removes 900 million permits from trade, creating an artificial shortage, trying to penalize firms for using the very mechanism the EU_ETS created.
Barely in business and the politicians are already playing games, trying to rig the market. Imagine what it would be like if the market was worldwide and there was serious coin involved. The dutch tulip mania and the south seas trading company will seem tame by comparison.
Eli Rabett says:
July 15, 2013 at 6:47 pm
You said the operative word, Eli–“opinions”.
Very little in science is based on opinion. Science is generally a lot more precise than that. And because of this wonderful precision, we can generally agree that politicization of science isn’t beneficial.
Except to those holding the “purse strings”, of course. And this is potentially the biggest purse out there.
If it happens, the rest of us are going to take a drubbing.
Free market in political tripe.
Since carbon is a non-commodity, trading in it is anything but a “market” – it is a shell game – and the money made in trading it is straight off the backs of the people – especially lower-income people – who must pay higher energy costs because of it.
Shameful, and there is no good rationalization for it. It’s nothing but a sleight-of hand, thoroughly disingenuous and dishonest scheme for der Fuehrer’s crony capitalist buddies and like-minded fraudsters and market manipulators elsewhere.
Gbenga Ibikunle, from the University of Edinburgh Business School, said: “While individual responsibility for combating climate change is important, much needs to be done to incentivise companies – especially those who emit most of the world’s carbon – to cut back too. This study shows that free market mechanisms such as the EU-ETS can be effective in doing that.
Not one single sentence showing that the EU-ETS actually achieved any meaningful reduction in carbon emissions.
@Janice Moore –
Yes, let’s hope that Rudd and Gillard & Co. get their pancreases, thymus glands and pineal bodies well kicked in Australia’s September election.
No matter how much you sugar-coat a lump of feces, it’s still feces. So it is with the feces that is carbon trading, in any way, shape or form
If it were shown that Carbon emissions had a net negative external effect on general welfare, societal welfare could be increased with a cap and trade scheme. If the net externality is positive, in other words if value of the agriculture stimulation outweighs the cost of slightly higher temperatures or if slightly higher temperatures are a good thing, then such a scheme could have very significant negative social costs. If the externality of CO2 emmisions is net positive the ideal solution is a negative carbon tax, a “burn and earn”, rather than a cap and trade program. A burn and earn program would add even more social benefits if it were financed by a tax on food, though this would be a tough sell to the ladies down at the church.
Yup, Chad, It still STINKS.
Good point, David Hoffer — likely the only “evidence” is some stinking model projection — AGAIN.
Too bad about Richard Courtney, hm? What he did (gave out A.’s e mail) was wrong, but, A. was very generous and R.C. was only banned for two weeks. I HOPE YOU POST AGAIN, Richard Courtney. M. Courtney hasn’t said anything about his dad that I’ve seen.
You, too, Cement Head and R. J. Salvador!
Using free market platforms like the ECX to combat climate change could provide the basis for the introduction of a mandatory emissions cap and trade scheme worldwide.
Stopped reading at that. They don ‘t understand that “free” and “mandatory” are antonyms.
Or worse, they do.
Either way, nothing good could possibly follow.
thingodonta says: July 15, 2013 at 6:50 pm
…
I would agree with you if the “market” didn’t require legislation to give it effect … in which case the market would likely decide that it is all too much of a bother.
Chris Riley, your post makes EXCELLENT sense.
The sad truth, nevertheless (and I realize you know this, too, just wanted to SAY it), is… D’oh!bama and the Chicago Thugs (along with artificially expanding market share for their “green” energy buddies) want to RUIN the U.S. economy (the One did not attend a church where the pastor bellowed, “God, damn America!” from the pulpit because he disagreed with him;
and, in other lands, if ruination is not the intended goal, giving all the energy market to politicians’ “green” energy investor cronies is. And what crony, er, country is building much (most?) of the “green” energy products? China.
Thus, simply taxing fossil fuel industry products to the point that their price is far beyond a demand level that would let them break-even (much less make a profit) is ALL the Envirostalinists and their insane-but-useful partners, the Holy Church of Climatology, care about.
HOWEVER…. if we in the “free world” can elect GOOD GUYS to Parliament, Congress, etc… — WE CAN TURN THIS THING AROUND!
So, bottom line is — what you said is what we need to be telling all our Good Guy elected officials!
J.J.!
I finally (I hope!) caught up with you. I should have said this on the thread where you wrote it, but was waaaay, down on the stack, so bagged it. THEN, wished I had, so…. I am FINALLY telling you, re: the malfunctioning temperatures at Kettle Creek (?), Wash., U.S.A., NICE SUMMARY of that bogus temp. record: (paraphrasing:
“120 deg. ‘SUSPECT’
121 deg. ‘SUSPECT’
132 deg. ‘OKAY.’
CAGW in a nutshell.” [J.J.]
I sure hope you see this “WELL PUT!” Brevity = wit, so true.
Too complex. It won’t gain mainstream political traction.
ECX doing well, Chicago Climate Exchange (CCX), well, not so much!
http://www.nytimes.com/cwire/2011/01/03/03climatewire-chicago-climate-exchange-closes-but-keeps-ey-78598.html?pagewanted=all
I see the Aussies are going to scrap their carbon tax and move to a market mechanism:
http://www.nytimes.com/2013/07/17/world/asia/australian-leader-scraps-tax-on-carbon-emissions.html?_r=0
p.s. I really hate quoting the New York Times, sorry!
CRS,DrPH we don’t know what will happen in Australia at the moment Labor will I hope lose the next election the carbon tax is a joke at $27 a ton it will not be changed till next april if labor wins it will be too late for a lot of businesses we will not be producing any thing
EU researchers find that EU has great, great ideas! Did I mention that the economy in the EU is doing great, just great? /sarc
The EU “carbon market” is of course a parody of a market. The ultrastate will use more of this so he can consume more of society’s output without having to call it a tax.
The end result will, one way or the other, be Greece.
The Aussie carbon tax (CT) was supposed to be enshrined in law and not able to be repealed (By the LNP opposition who, with Gillard as PM, were likely to win. This does not seem likely now). Seems that was a lie too ALP. Rudd (Erless) is simply taking advantage of the low EU ETS credit price of ~4 euros/t, as apposed to AU$24.15/t, claiming that a linked ETS (Dropping the “proice ohn cahbon” to ~AU$6) will save families hundreds of dollars. The trouble is there are far too many Aussies who will fall for this blatant vote bribing as we were told by Gillard in 2010 the CT, that she would not introduce, would not make the cost of living more expensive. Seems that was a lie too!
And the political pantomime continues in Australia.
“Researchers said that changes are needed to ensure the EU-ETS survives Europe’s economic downturn.”
On the contrary, changes are needed to ensure Europe’s economy survives EU-ETS. However, that will not happen.
I love free markets where the state tells you that you have to buy and sell or go to jail.
Exactly. Or move the industry to China.
Of course neither the electricity generators nor the bulk of customers can do that, which leaves French nuclear power sitting pretty. I draw some consolation from the idea of Greenpeace et al crying themselves to sleep over the fact that they are now effectively promoting nuclear power.
The bizarre argument, that conservatives must ‘engage’ or cede the debate assumes the progressive obsession with CO2 is anything more than what the evidence shows it to be: A popular madness.
A truly free market transaction requires freedom at each end and at every stage: choice of product; choice of materials; choice of methods; employment contracts freely determined between contracting adults; a price asked by the producer and accepted by the purchaser. The law common to all is there to deal with wrongs, and not the production of goods, unless some agent is wronged in the producing or consuming thereof.
I should also add – ‘the use of a market produced money in paying for goods’.
Brev.= Wit
“There are many ways to lose money, and they just keep inventing new ones, when old ones work just fine”, I believe Warren Buffet said something along those lines.
Europe is dying, it is a slow managed decline, they can afford to be stupid because of past riches and achievements.
It is such a good idea that even the mafia have invested
Why this “pseudo-rationing” using carbon credits. If the federal government thinks CO2 production is a problem, why not RATIONING, as was done several times in California when we experienced droughts, and was done a couple of times during the Carter and Nixon years, resulting in long gas lines in many places.
I’m sure that actual rationing would make the current administration just as popular as the Carter and Nixon administrations.
Ref Janice Moore 8.24.
You missed Rudd’s reply to Tony Abbott’s “so called market of non delivery of invisible substance to no-one”.
Rudd said “Next thing Abbott will be saying is air is invisible!”
Yeah that’s right – air invisible? My gosh Mr Rudd next Abbott will be saying CO2 is a pollutant.
Meet the new “Free Market”, same as the old “Five Year Plan”.
“King of Cool says:
July 16, 2013 at 5:30 am”
Rudd also claims to be a Kokoda survivor too. This man must be the second coming, no only did he survive a war before he was born, he can see air!!
kretchetov says:
July 16, 2013 at 4:49 am
““There are many ways to lose money, and they just keep inventing new ones, when old ones work just fine”, I believe Warren Buffet said something along those lines.”
Warren also knows the one and only way to make money. Have some friends in DC.
A solution that doesn’t work for a problem that doesn’t exist.
How appropriate.
One word – “Enron”
WOW!
“The EU set limits and issued permits for how much carbon firms could emit into the atmosphere. If companies exceed their limit, they incur regulatory penalties.”
And maybe Mother Nature will give them a spanking on their little fannies for being so bad…how about ACTUALLY EARNING MONEY AND PRODUCING SOMETHING OF VALUE?!?
I don’t have time to read all the comments so far, so maybe this point has been made.
The concept of a free market in emissions is a good one, provided the particular emission being addressed is one that should be limited. It makes more sense than government-mandated rules because it will more efficiently allocate resources. This is just basic economics. The person purchasing the emission credit has a better economic case for using it than the person selling it. To implement such a design fairly, you should establish a baseline period in the recent past and measure all party’s emissions at that time and allocate annual emission credits based upon that past usage, for free. Then let them trade the credits. If you want less future emissions, you set the total credits at a sum less than the past usage. If you just want no increased growth in emissions in the future, you set the total credits exactly at the past usage.
One of the benefits of such a system is that it allows for, and encourages, innovation. A company that devises a way to produce their output while generating far less emissions than in the past will not need to purchase credits, and will be able to sell what they have been allocated. Eventually, as their innovation spreads, the price of the credits goes to zero because they’re no longer needed by anyone. In that way, the market-based policy drives the desired policy result, i.e., lower emissions overall.
The real problem is in the determination that something is an emission that should be controlled. CO2 is not such an emission. That’s where the market-based strategy goes awry, not in the design itself. Also, the politicians designing the system are unlikely to award the annual allotment of credits at no charge, as they should. Instead, they will charge for them, in effect instituting yet another tax on business.
Carrying this approach further, imagine that instead of the government mandating a mpg standard for vehicles, they instead used such a market-based approach. The government could set 30 mpg as the standard, and set a certain amount of credits for every ton of vehicle sold, for example one credit per ton per mpg it gets above or below 30 mpg in testing. So, if a 2 ton car gets 35 mpg, the manufacturer gets 10 credits for selling it, and if a 3 ton SUV gets only 20 mpg, the manufacturer has to give up 30 credits to sell it. Give all manufacturers an allocation based upon their 2012 production values and let them proceed.
Note that a new entrant, coming in with only 30 mpg vehicles, would not be disadvantaged. That company would not generate or use credits. If they chose to sell trucks, they would have to purchase credits from others. If they chose to sell small cars getting 40 mpg, they would generate credits to sell to others once their baseline was established. And if people want to buy SUV’s they’d be paying for the privilege by financing the cost of the mpg credit the manufacturer was spending. This would be a far more efficient process than just having the government decree, as it now has, that the vehicle average must top 50 mpg in the near future, an edict that will almost certainly be repealed, but will cause untold harm to the industry, and its customers, in the meantime.
There is no evidence that CO2 has any effect on climate. Such an effect does not appear in the paleoclimate record and there are sufficient negative feedbacks provided by H2O to mitigate any effect that added CO2 might have. There are many good reasons to be conserving on the use of fossil fuels but global warming is not one of them. Carbon credits may be a good revenue generating tool but it has no effect on climate. Under such a carbon credits scheme I would think that one could open a company that is nothing more than an email address and sell carbon credits to other companies who actually expect to do something. What is the government going to do about unlicensed termite nests?
The real greenhouse gas problem is not Carbon based molecules but Hydrogen based molecules Nations should develop a Hydrogen credits trading scheme. Where I live, there is so much Hydrogen based greenhouse gas in the atmosphere that it often condenses out as a liquid. The city collects the liquid in a network of underground pipes but instead of destroying this liquid, they just dump it outside of the city limits where it is allowed to evaporate back into the atmosphere. To date our EPA has done nothing to mitigate this problem. A Hydrogen credits scheme may be the only solution.
Rod Everson says:
July 16, 2013 at 7:53 am
“I don’t have time to read all the comments so far, so maybe this point has been made.
The concept of a free market in emissions is a good one, provided the particular emission being addressed is one that should be limited.[…]”
Notice that once their parody of a market didn’t behave as they wanted to they decided to change the rules. Which is what unaccountable unelected tyrants always do.
As a consequence long term investments in the EU become irresponsible. What is left is get-rich-quick schemes.
And that is what they will get.
King of Cool says:
July 16, 2013 at 5:30 am
“Rudd said “Next thing Abbott will be saying is air is invisible!””
He said “It’s a bit like saying because air is invisible, it’s not real,” Mr Rudd said”. I support making fun of him but we should stay factual – not to be nice but to maintain credibility.
More silly nonsense, why is carbon trading needed when clearly the US experience in reducing so called CO2 emissions has proceeded without a trading system and more effectively than any existing CO2 trading system ever produced? The US market has reduced CO2 emissions organically without the imposition of false costs and needless bureaucrats to oversee it.
If it ain’t broke don’t fix it!
The dirty little secret of Capitalism is that in the drive to increase the bottom line the expense of waste in any form minimized and that includes energy consumption of any kind.
The truth is that IF solar power conversion efficiency jumped dramatically from the miserly percentage levels existing now, inverter costs dropped and a viable cost effective battery storage system existed, no one would be objecting to a wholesale move to solar other than the utilities losing out on charging high prices for KW demand. Those stranded costs can be killer as they found out under electric deregulation. In the meantime, an off-grid solar home is a rich person’s status symbol or an island nation’s necessity. It’s all about the dollars and don’t let some fool of a greenie tell you otherwise.
Yup, trading bits of paper with “Your SINS are forgiven” on them will certainly help the temperature….
“International Journal of the Economics of Business.” doesn’t even blink when the EU-ETS is described as a “free market mechanism”?
ISTM about as “free-market” as the West’s trade in East German Marks before the wall came down.
Maybe the author could explain to me what’s free about a free carbon market.