Carbon offsets lose 20% of their value in the last week at CCX

It appears that the carbon offset market is dying in the USA. You may recall the WUWT story from 9/9/09 on the Chicago Climate Exchange trading price dropping to 25 cents per metric ton. See

Market Confidence Low: Carbon Credits now worth 25 cents, were at $7 in 2008

CCX_chart_091809

Since then, the price has dropped to 20 cents per metric ton for all Carbon Financial Instruments (CFI) except for the 2010 issues, losing 20% of their value. Trading volume has also dropped to a trickle with only 200 transactions Friday. Here’s the closing data from Friday, 9/18:

CCX end of day report 091809 - click for a larger image

CCX end of day report 091809 - click for a larger image

Last Friday, 9/11/09 appears to be the day when the current drop started.

It appears there was a big selloff on 9/11, when investors got wind of a major suspension by the UN before it hit the press. On Sept 11th, there were 292,500 transactions (largest in over a month) and the price fell from the previous day closing price of 25 cents:

CCX_sept11-2009-selloffclick for larger image

The Sunday Times has the story:

The legitimacy of the $100 billion (£60 billion) carbon-trading market has been called into question after the world’s largest auditor of clean-energy projects was suspended by United Nations inspectors.

No wonder carbon offsets are falling to 20 cents a ton. Coal is still much more valuable at 40-50 dollars a ton.

A look at the CCX external advisory board roster is telling. Here’s a partial list below.

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

CCX’s Advisory Board was formed to provide the Exchange and its Members with external strategic input from some of the world’s top experts from the environmental, business, academic and policy-making communities.

Honorary Chairman: The Honorable Richard M. Daley, Mayor, City of Chicago

Ed Begley Jr. has been considered an environmental leader in the Hollywood community for many years. He has served as chairman of the Environmental Media Association and the Santa Monica Mountains Conservancy. He still serves on those boards, as well as the Thoreau Institute, the Earth Communications Office, Tree People and Friends of the Earth. Mr. Begley’s work in the environmental community has earned him a number of awards from some of the most prestigious environmental groups in the nation, including the California League of Conservation Voters, the Natural Resources Defense Council, The Coalition for Clean Air, Heal the Bay and the Santa Monica Baykeeper. He currently lives near Los Angeles in a self-sufficient home powered by solar energy.

Ernst Brugger is Founding Partner and Chairman of Brugger Hanser & Partner Ltd. in Switzerland, a business consulting firm with international experience and range. He is also a professor at the University of Zurich, chairman and member of the board of various companies and a member of the International Committee of the Red Cross (ICRC). Dr. Brugger serves as Chairman of the Board of Directors of Sustainable Performance Group, an investment and risk management company which invests in pioneering and leading companies which have taken up the cause of sustainable business.

Lucien Bronicki is the chairman of Ormat International, an Israeli company in the field of innovative technology solutions to geothermal power plants, power generation from industrial waste heat, and solar energy projects. Chairman of Ormat since he founded the company in 1965, Bronicki chairs the World Energy Council’s Israeli National Committee, is a member of the Executive Committee of the Weizmann Institute of Science, and member of the board of Ben Gurion University.

Elizabeth Dowdeswell is internationally recognized for her global and highly diverse experience in building consensus and managing change. She advises both public and private sectors on environmental issues worldwide. Ms. Dowdeswell is a former Executive Director of the United Nations Environment Programme (UNEP). Before joining UNEP, Ms. Dowdeswell was the Assistant Deputy Minister of Environment Canada. In that capacity she played a leading role in global efforts to negotiate the treaty on climate change adopted at the 1992 United Nations Conference on Environment and Development. She was Canada’s permanent representative to the World Meteorological Organization, principal delegate to the Intergovernmental Panel on Climate Change, and Canadian Chair of the Great Lakes Water Quality Board. She is currently President & CEO of NWMO and a Visiting Professor at the University of Toronto. She also serves on the governing and advisory boards of several institutions. Ms. Dowdeswell is the author of numerous publications in both the popular press and professional journals.

Jeffrey E. Garten is former dean of the Yale School of Management. Formerly undersecretary of commerce for international trade in the first Clinton Administration, he also held senior economic posts in the Ford and Carter administrations. From 1979 – 1992, he was a managing director first at Lehman Brothers, where he oversaw the firm’s Asian investment banking activities from Tokyo, and then at the Blackstone Group. Currently a monthly columnist for Business Week, his latest book is “The Mind of the CEO”(2001).”

Donald P. Jacobs is a former Dean of the Kellogg Graduate School of Management at Northwestern University and its Gaylord Freeman Distinguished Professor of Banking. Under his leadership, the Kellogg School has become a leader in the field of business and finance and is consistently ranked as one of the top five business schools in the United States. Dean Jacobs is a former Chairman of the Board of Amtrak (1975-1979) and currently serves on several corporate boards. His work on banking, corporate governance and international finance has been published in many scholarly journals and he holds several honorary degrees and professional awards.

Joseph P. Kennedy II is Chairman and President of Boston-based Citizens Energy Group. Before returning to Citizens Energy, Mr. Kennedy represented the 8th Congressional District of Massachusetts in the U.S. House of Representatives for 12 years. Mr. Kennedy founded the non-profit company in 1979 to provide low-cost heating oil to the poor and elderly. Under his leadership, Citizens grew to encompass seven separate companies, including the largest energy conservation firm in the U.S.  Mr. Kennedy also advises and serves on the boards of several companies in the energy, telecommunications, and health care industries. Mr. Kennedy is the son of the late U.S. Sen. Robert F. Kennedy.

Israel Klabin is the president of the Brazilian Foundation for Sustainable Development, a major Brazilian non-governmental organization devoted to issues of environmental and sustainable development policy. Mr. Klabin is the former chairman of Klabin SA, one of the largest forestry companies in Latin America. He is a former mayor of Rio de Janeiro and was one of the main Brazilian organizers of the United Nations Conference on the Environment (Rio 92). He is also actively involved in several philanthropical activities.

Bill Kurtis has had a distinguished career in broadcasting for over 30 years, as a news anchor in Chicago and later of the national CBS Morning News. He started his own company, Kurtis Productions, when he returned to Chicago in the mid 1980’s and currently hosts shows on the Arts and Entertainment network. Mr. Kurtis is involved in The National Science Explorers Program, Electronic Field Trips and the Electronic Long Distance Learning Network, all aimed at teaching children about science. Mr. Kurtis and his shows have been the recipients of several awards. He serves on the board of directors of organizations devoted to natural history and the environment, including the National Park Foundation, the Nature Conservancy and the Kansas State Historical Society.

Thomas E. Lovejoy is a world-renowned tropical and conservation biologist. Dr. Lovejoy is generally credited with having brought the tropical forest problem to the fore as a public issue, and is one of the main protagonists in the science and conservation of biological diversity. In 1987, he was appointed Assistant Secretary for Environmental and External Affairs for the Smithsonian Institution and is Counselor to the Smithsonian’s Secretary for Biodiversity and Environmental Affairs. Dr. Lovejoy is also Chief Biodiversity Advisor to the President of the World Bank and the Bank’s Lead Specialist for the Environment in Latin America. From 1989 to 1992, he served on the President’s Council of Advisors in Science and Technology (PCAST), and acted as scientific adviser to the Executive Director of the United Nations Environment Programme (1994-97). He was the World Wildlife Fund’s Executive Vice President from 1985 to 1987. Dr. Lovejoy is the author of numerous articles and books.

Dr. Rajendra K. Pachauri is the Director-General of The Energy Research Institute (TERI) which does original work and provides support in energy, environment, forestry, biotechnology, and resource conservation to governments, institutions, and corporates worldwide. Dr Pachauri is currently Chairman of the Intergovernmental Panel on Climate Change (IPCCC), one of the recipients of the 2007 Nobel Peace Prize; a Director of the Indian Oil Corporation Limited (a Fortune 500 company); and a Member of the Board of Directors of the Institute for Global Environmental Strategies, Japan. He has been President (1988) and Chairman (1989*90) of the International Association for Energy Economics and is President of the Asian Energy Institute since 1992. He has been a member of numerous committees and boards, including those of the International Solar Energy Society, World Resources Institute, World Energy Council, and has acted as an Advisor to the Government of India, reporting directly to the Prime Minister. Dr Pachauri has also served as a member of the faculty of several prominent academic and research institutions and has published 22 books and several papers and articles. He was recently awarded the Padma Bhushan, one of India’s highest civilian awards.In July 2001 Dr Pachauri was appointed a member of the Economic Advisory Council to the Prime Minister of India, which is chaired by the Prime Minister.

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59 thoughts on “Carbon offsets lose 20% of their value in the last week at CCX

  1. Well certainly the markets recognize the whole thing as a charade! Hopefully the broader populous is not too far behind!

  2. In the real stock market, if a stock falls below a certain figure we call “market cap” it gets delisted. If the C market falls, it should be given a “time out”

  3. Honorary Chairman: The Honorable Richard M. Daley, Mayor, City of Chicago
    Donald P. Jacobs
    Dean Jacobs is a former Chairman of the Board of Amtrak
    We are missing Algore and Rod Blagojevech.
    This is a Platinum panel of Cluelessness.

  4. It won’t matter to the sellers of the stock: They got their hands on fistfuls of $$$. The investors got cleaned out once again.
    The legitimacy of the $100 billion (£60 billion) carbon-trading market has been called into question after the world’s largest auditor of clean-energy projects was suspended by United Nations inspectors.
    Triple A rating, I suppose.

  5. Rajendra Pachauri, eh? I always had the feeling he was on the take. Just like Kofi Annan and Ban Ki-Moon.
    The UN is a corrupt criminal organization being run on our tax money by kleptocrats.
    And the President and Congress allows it, as if there’s anything the UN can do that we can’t do better, cheaper and more efficiently on our own.

  6. There’s a lot about this scrip that I just don’t understand. Here in the NorthEast we have a beast call RGGI, Regional Greenhouse Gas Initiative, see http://www.rggi.org/home :

    About the Regional Greenhouse Gas Initiative
    The 10 Northeast and Mid-Atlantic states participating in RGGI (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New Hampshire, New York, Rhode Island and Vermont) have designed and implemented the first market-based, mandatory cap-and-trade program in the U.S. to reduce greenhouse gas emissions. Power sector CO2 emissions are capped at 188 million short tons per year through 2014. The cap will then be reduced by 2.5 percent in each of the four years 2015 through 2018, for a total reduction of 10 percent.
    A CO2 allowance represents a limited authorization to emit one ton of CO2, as issued by a respective participating state. A regulated power plant must hold CO2 allowances equal to its emissions to demonstrate compliance at the end of each three-year control period. The first control period for fossil fuel-fired electric generators under each state’s CO2 Budget Trading Program took effect on January 1, 2009 and extends through December 31, 2011. Allowances issued by any participating state are usable across all state programs, so that the ten individual state CO2 Budget Trading Programs, in aggregate, form one regional compliance market for CO2 emissions. For more information turn to: http://www.rggi.org.

    In their recent auction the 2009 clearing price is $2.19, the 2012 clearing prices is $1.87. Apparently there’s a minimum price and $1.87 is close.
    It may be this is a price for generating stations in the RGGI area, so perhaps the CCX units are for another region or for something significantly different. This would make a lot of sense if the electricity generated by burning enough fuel to release one ton of CO2 cost more to transport from Chicago (or whereever) into the RGGI region.
    Ah, see http://www.ccfe.com/ the Chicago Climate Futures Exchange – they trade RGGI futures. “RGGI Dec09 V09 $2.48” Why isn’t that closer to $2.19? “CCFE RGGI futures and options contracts on RGGI carbon dioxide (CO2) allowances provide market participants with a low cost, transparent, and standardized platform to hedge against price fluctuations in the RGGI CO2 emissions market.” Sounds like it’s time to sell to me!
    See also http://granitegeek.org/blog/2009/09/11/carbon-prices-fall-in-rggi-auction-as-electricity-usage-drops/

  7. Ed Begley Jr.
    Ed Begley Jr?
    ED BEGLEY JR!!!!????
    Uh, is this a trading exchange or a cafe on Melrose?
    (Yes I’m still in Brazil) jeez aka ctm

  8. The second major “inspector” of the validity of carbon contracts has been suspended.
    Their trading volume in units is down 95% and the price per unit is near zero. it isn’t worth getting Punjab on a donkey and paying him pennies to visit a field and validate the groves for carbon contract compliance.
    http://www.freecarbonoffsets.com/home.do
    On the good side, Soros and other early big players sell short and make loads of money when the market falls. Soros is the financial backing for Climate Progress and Joe Romm. Talking up green jobs buy using ACORN and liberal media helped Hype the carbon scam. Van Jones tried. If we have people invest in windmills with the promise that carbon contracts will triple the price of coal generated electricity, we can get rich.

  9. The first tool for directly hedging exposure under a “potential” mandatory U.S. greenhouse gas trading program. (learn more) / (Download FAQ Brochure)
    This is like gambling on a product with a contingency that a law will be passed/
    “Charade” is a great word. Some states plan on denying carbon output and selling indulgences if you do.

  10. Green bubble?Begley Jr. is the onlyone who walks his talk.The others look at this to add onto the Manse or overhaul the Family G-V…

  11. PaulH (10:53:31) : Enronian in shape.
    It might be as low as Enron now but it never went as high.
    I know there are people in Wall St. that would do the same with CCX as they did with Enron if they saw the same potential for it. With the earth cooling it looks like that potential is dying.
    All I can say is buyer beware.
    If the plan goes forward as expected, the rise in prices will be government-mandated….The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand new commodities market where the main commodity to be traded is guaranteed to rise in price over time.
    http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine/7

  12. Carbon tax is yet another of the insanities proposed by this new administration.
    Question: Who was the last President to raise taxes during a recession?
    Hint: His last name was Hoover.
    While those who fail to learn from history’s failures are doomed to repeat them, the unfortunate part is that they drag the rest of us schlubs along, too.
    All I want to know is how can I get on a board? Any board. Any advisory committee, as long as it pays. I’m not as tall as Ed Begley, Jr, but I was a Boy Scout once. (Yes, I know, overqualified)
    Here’s a cheery note. Since carbon credits are an artificial construct, failure of carbon tax legislation like H.R. 2454 will have a deleterious effect on the profits of climate profiteers, one Nobel laureate/Oscar® winning ex-politician coming to mind.
    That is all. Resume thread.

  13. It is interesting that Ed Begley Jr is on the board of this exchange. I met him last month at a green awards event in Hollywood, where in his speech he commented, “whether or not you believe that were responsible for global warming, energy independence from the middle east is just smart policy for our national security…”
    Could watching how his exchange is tanking be educating him to greater openness of mind about the issue?

  14. How long is the half-life of a CarbonOxide Credit?
    As long as it takes for the seller of the paper to get on the next flight for Rio.
    Green Job: What you call it when you just had your wallet emptied of Greenbacks in exchange for the a freshly printed Carbon Credit.
    Green Credit: The accolades you get at a Green Rally. Atta boy.
    Green Energy: Used to be called Perpetual Motion, now it’s looking more like a recipe for a BrownOut.

  15. I love it, the Ads By Google for this story is:
    Ready For Carbon Trading? Our software can help you to get ready to capitalize on carbon markets.
    Ha, ha!

  16. The market is saying Cap and Trade in the US and a Copenhagen agreement are as dead as the proverbial dodo. And let’s hope like the dodo, permanently so.
    Also on a more hopeful note, the UN may well have over reached with carbon trading.
    To date the UN has largely avoided exposure as the nest of corruption, incompetance and nepotism that it is.
    The very large sums of money involved in carbon trading will bring levels of scrutiny and expose all kinds of malfeasance.
    Did you know that the United Nations has no laws, and if you are a UN official with diplomatic immunity, nothing you do is illegal anywhere in the world.

  17. Gene Nemetz (11:01:53) :
    CCX down. Coal doing well. Oil up, gas over $3.00 a gallon.
    Where? In Virginia, I bought at $2.21 / gallon.

  18. Who is it exactly that’s trading these credits? EU countries with US operations? US companies in expectation of a cap and trade system being put in place here? US companies attempting to “green” themselves?

  19. I second the comment from “Douglas DC”. Even though Ed Begley, Jr. is misguided on the whole carbon dioxide thing, he’s the only one of the entertainment crowd that actually walks the walk, and you gotta respect that. He doesn’t just lecture the rest of us on how we don’t deserve to use as much energy as he does. He has solar panels on his house, catches rain water for his garden (actually a pretty good idea when you live in a desert like the Los Angeles area), etc. It’s people like that who push the technology to mature and actually become practical.
    I also agree with his comment reported by Mike Lorrey. Untying our energy supply from volatile regions of the world is good policy. Even when I worked in the oil industry, I always thought that oil is too valuable as chemicals to be burning as fuel. The problem is that it’s such a good fuel. Nothing else can compare in terms of energy density and specific energy, ease and safety of storing and handling, and efficiency of procuring and preparing it for use.
    I’m in favor of any effort to develop alternate forms of energy and making them safe and practical on an industrial scale. And that can’t happen without early adopters like Ed Begley.

  20. I mentioned back door bills in a previous thread, but here’s a specific example that pertains: H.R.1759 . Partial Quote:
    “A BILL
    To distribute emission allowances under a domestic cap-and trade
    program to facilities in certain domestic energy intensive
    industrial sectors and subsectors to prevent an
    increase in greenhouse gas emissions by manufacturing
    facilities located in countries without commensurate
    greenhouse gas regulation, and for other purposes. ”
    Full text (pdf ) http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1759ih.txt.pdf .
    Waxman-Markey is not the only kid on the block.

  21. kmye:
    As nearly as I can determine credits are either private or public.
    It is private credits that concern us in the US. The credit is a paper that says the issuing company will make a good faith effort to reduce CO2 in the atmosphere by a stated amount. You pay them for that effort by purchasing the credit.
    The company gets the money and the rest is up to their conscience. They may decide that the best way to reduce CO2 is to pay their CEO a billion dollar bonus.
    But hey, they did their best!
    As might be expected funds and venture capital have launched most of the credit selling companies.
    In contrast, public credits are government mandates. They are widely used abroad and will be coming to the US when Cap-and-Trade legislation is implemented. That will require companies to acquire sufficient credits to offset their emissions.
    At least in theory government regulates the number of public credits available and makes sure the process is meaningful.
    Both types of credits can be and are traded like stocks.
    I hope someone else speaks up. The above is only my vague idea about what is happening.

  22. Ed Fix (15:29:26) :
    You’re absolutely right about fossil fules. Nothing else beats it.
    Can you mimic nature’s photosynthesis efficiency with alternatives?
    It’s really amazing how much solar energy is stored on Earth.

  23. Ed Fix,
    I agree with you, and if I read their posts correctly (and I’ve got my target shirt on if I’m wrong) so do most of the posters here. Alternative energy sources including nuclear where technically and economically possible are great ways of moving from single source (for all practical purposes) oil. I can’t think of anyone here who condones waste for waste’s sake. Anthony, as an example drives an electric car around town. Here in Pueblo, Colorado distances to shopping and such are a power of ten or so greater than Sacramento, so the technology isn’t quite able to meet this market – yet.
    I think the basic beefs (as I read the posts) are bad science, bad politics and bad economics leaving the taxpayer paying for energy that is still bleeding edge (like wind or solar) and those who point to it without knowing life cycle costs of the technology they trumpet. Aside from the clueless adults out there our children are being brainwashed in school with AGW drivel. Us old guys may have minds like a steel trap, rusted shut, but we know it. Ever try to reason with a child who’s teacher said??? It’s a lose, lose, lose situation.
    But, yeah, I can admire someone who walks his talk…and yeah, they are the backbone of improving the technology.
    Mike

  24. It seems like the Sun may be happy and decided to turn itself back on now that the Carbon Credit market is going down to broke. The Solar Flux is starting to rise and there’s the look of a big honkin spot just around the corner. Either that or its a group of littler spots instead.
    It’d be ironic if the carbon market makes it look that way, the price goes down to a penny and we suddenly see Cycle 24 in full force.

  25. Carbon is reaching its actual value: A trace value. The most expected “bubble” has deflated, though many keep blowing in.

  26. Ron, I grew up on a farm in the 50’s. I can guarantee you that heliogenic link is grossly wrong.
    We, almost certainly, used MORE Energy to produce that 50 bushels of corn than these farmers used this year to produce over 160 bushels.

  27. Mark (14:16:35) : gas over $3.00 a gallon.—Where? In Virginia, I bought at $2.21 / gallon.
    California. Here in the San Francisco Bay Area it’s anywhere from $2.99 to $3.29 for regular.

  28. The price of carbon credits have dropped also in the EU Trading scheme by as much as 25 per cent but it is still approximately $12. However, you could not buy the $0.25 per ton from CCX and sell it at EUTS because the CCX carbon credits is just plain paper and it is not rcognize and it is not registered with the UNFCCC registry. Ouside of the companies voluntarily joining the CCX, the carbon credits has no value. At least the Zimbabwe money has value to countries still recognizing Zimbabwe. The prospect of US officially ratifying the sucessor to the Kyoto Protocol ( used signed the Kyoto Protocol and it has ratified the UNFCCC the permanent agreement of which the Kyoto Protocol is only a timed implementation arrangement of the UNFCCC) is the main cause for the drop in CCX. The Kyoto Protocol has a provision for additionality– i.e. you could not get a credit for reduction done before it is recognize and registered with the UNFCCC.

  29. Ron, I grew up on a farm in the 50’s. I can guarantee you that heliogenic link is grossly wrong.
    We, almost certainly, used MORE Energy to produce that 50 bushels of corn than these farmers used this year to produce over 160 bushels.

    In the 50’s?
    Well, you probably used, maybe, 5-10 gallons of gasoline preparing, raising, and harvesting an acre of corn, and most of it was probably fed on the farm. (That’s just a guess, but I would doubt if I’d be off by more than a factor of 2 so, say 20 gallons per acre top end).
    Now, today, I can prepare, plant, harvest, and store a crop with about 4-5 gallons of fuel an acre.
    However, I’m using Synthetic chemicals that weren’t available in the 50’s. I’m using 180 lbs of N/acre that wasn’t available in the 50’s, or just starting adoption. About 100 lbs of P and K per acre, same story. So, maybe less energy per bushel, but more energy per acre.

  30. With that old equipment we made many more passes across a field. We, also, deep plowed which many don’t today. Not having the chemicals we had to cultivate, cultivate, and cultivate.
    Sure we used nitrogen. Probably, more than you use, today. Same with P, and K.
    I wouldn’t be surprised if we didn’t use twice as much energy/acre, (3 times per bushel) if not three times the energy/acre.

  31. Well, I hate to argue this, but, Plowing would have taken maybe, maybe 2-4 gallon/acre depending on what you were using. Disking? mabye 1-2 gallon per acre twice, then mulching, 1 gallon, planting, probably 1/2 gallon, Cultivating? Max about 4 times at max about 1 gallon/acre/trip. Nitrogen use in the 50’s might, might, have been 50 units/acre, few operations put on P or K yet. Only chemical options MIGHT have been 2 4 D or atrazine. But I think Atrazine came later.

  32. O.K.
    So, I found one reference that said we use half as much energy per bushel to grow corn now vs the 1950’s. That, I believe. Which, if yields have gone from tripled, means that we are, indeed, using more energy per acre, just more efficiently.

  33. @ K (15:56:00)
    Thanks the response. I guess I didn’t fully clear, but I’m wondering who it is that’s buying them, before any US cap and trade system is in place.

  34. Surely if a farmer saves all the unsellable biomass from his crop that is sequestered carbon, as long as it doesn’t rot or burn?

  35. I don’t like to say ‘I told you so’, but here is an extract from my Carbon Credit article, written in November 2008 – before the UK had even gone into recession.
    http://wattsupwiththat.com/2009/04/10/a-farmers-view-on-carbon-credits/
    Quote:
    Meanwhile, back at the financial dealing desks for Carbon Credits, another commodity is about to crash. But perhaps I should not use the term ‘commodity’, for Carbon Credits (CCs) are an abstract construct that have even less contact with the real world than our over-inflated monetary systems. If there was ever an emperor with no clothes, it is a carbon trader declaring that a CC is worth £30 or £20 or £10, or any other figure that he or she may invent. CCs are a new pyramid selling scheme, that only survives as long as someone is promoting it and as long as there are more gullible customers pilling into this new market. But there are not. A small element of science is beginning to doubt the Global Warming trends, fraud has destabilised the Carbon Trading market, and a global recession will flood this already unsteady market with millions of unwanted CCs. The price of a CC is about to fall through the floor, and I expect that the whole concept of a Carbon Trading market will fall over the cliff with it.
    .
    But I am going to anyway – ‘told you so’.

  36. >>>Surely if a farmer saves all the unsellable biomass
    >>>from his crop that is sequestered carbon, as long
    >>>as it doesn’t rot or burn?
    Thats the trouble with Carbon Credits. They are giving credits for forests (conservation or planting) but most trees will either burn, rot, or be used as timber – and then eventually burn or rot. In all cases, the carbon is not permanently taken out of the cycle at all.
    For forests to be truly carbon storage, either the felled trees need to be buried, or the planting of forests needs to be permanently exponential.
    .

  37. >>>At least in theory government regulates the number of
    >>>public credits available and makes sure the process is
    >>>meaningful.
    Not quite. There are Clean Development Schemes, where you can pledge to save carbon, and are issued with brand new carbon credits (CCs) for doing so. The problem is that this inflates the CC (carbon money) supply, and most of these schemes are of dubious value. Corrupt nations can claim for fabricated, illegal carbon reductions and get CCs by the million (hence the recent collapse of the largest CC auditor). This used to be a great scam worth $billions, until the price of CCs collapsed.
    As has been said before. You cannot trade an imaginary product.
    You might say the same therefore applies to normal money, which is also ‘fiat’ or ‘imaginary’. Well yes, the same applies there too. If you have a fiat money system that is open to corruption, you get an economy like Zimbabwe (a loaf of bread at 3 billion Zim dollars) or, indeed, the recent financial crash.
    That, however, is the problem with any cross-border money system – do you trust the members to behave?? I thought the Euro might have problems here, but most members are sticking by the rules. But with the new proposed World Currency, do you think that all nations will play fair, and not quietly print extra currency on the side?
    http://www.futureworldcurrency.com/
    The World Currency pipe-dream was raised by Russia and China at the last G8 conference. If it ever becomes a reality, it will have to be completely independent from national politics, and the recent partisan performance of the UN suggests that this is just not possible.
    .

  38. Check the azolla event in wiki.
    To sequester biomass dump in an anoxic lake/ocean ie. Black Sea. Then you’ll have replaced fossil fuels for someone in 80 Million years time, assuming there is intelligent life on earth then 😉 .

  39. kmye: I hope I get closer to answering your question this time.
    Buyers want to say they have them. I don’t know why. Maybe for prestige, or they have green views, or it helps in picking up babes.
    But most buyers are probably speculating that the market price will go up. After all those pieces of paper are a commodity, maybe the commodity price will rise.
    For private credits, some purchases are “conscious” purchases. Someone feels guilty about spewing CO2 from their car so they buy a credit that says someone will offset that.
    The purchaser feels good about himself, the credit seller feels good about getting the money. And some sellers may actually plant trees or take another action that reduces CO2 by the agreed amount.
    Corporations like to be seen as model citizens. So they may buy some. Ben and Jerry’s Ice Cream probably does, I believe they like environmental and green ideas.
    Public credits are different. They are a business cost. The government creates them and businesses must buy enough to offset their emissions. The idea is that government will limit the total credits they sell. Businesses will strive to reduce emissions in order to avoid the costs of buying credits.
    Presto, CO2 emissions fall, the government gets revenue. All is well.
    The Devil is always in the details. If the private credits do nothing to actually reduce CO2 then there is no purpose to them.
    If the public credits can be manipulated by insiders or industry then it may be worse than not having any at all. Another way, such as a carbon tax, might be do better.
    Al Gore has one or more companies that sell credits. I think he personally buys some to cover his homes and jet, etc. If he buys them from himself he probably gets a good price.

  40. I saw an article the other day which said that “old” GM stock was “trading” for 70 cents per share. Short sellers having to buy the stock they sold short, something like that, although the shares are completely worthless. Commodity trading is anything but investing. Gambling is what it is.

  41. Pachauri – whose qualification for election as head of the UN’s Intergovernmental Panel on Climate Change is that he’s a railway engineer, who advocates that we should all stop eating meat. It is noticeable that he does not advocate proscribing pets, for 99% of owners a purely lifestyle choice – expensive too, money in one end, excrement the other with the middle perpetually and irritatingly under the feet. Almost all consume animal derived nutrition which, according to the railway engineer, avoidably increases CO2 which pollutes the atmosphere and perilously raises global mean temperatures. So, from the climate change fakir of the IPCC why no proscription? Does he fear being waylaid by a screaming lynch mob of pooch lovers?
    As Henry Chance has noted – “a Platinum panel of Cluelessness.” Perhaps, I could also add “and snake oil salesmen.”
    RW

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