In 2005, the European Union (EU) put into place a carbon trading scheme. Prices for carbon permits promptly plunged, and have remained depressed since then. The price for a permit to emit a tonne of CO2 went from 21.59 Euros in 2005, to 17.28 in 2006, to 0.68 in 2007, to 2.16 in 2008, to 13.03 in 2009. Today, however, you will be glad to know that some academics declared the scheme a resounding success …
Say what? Here’s what Reuters News Service had to say:
(Reuters) – The European Union’s Emissions Trading Scheme (EU ETS) is a success and its flaws have not harmed its basic aim of reducing carbon dioxide emissions, multi-national research showed on Friday.
Experts at French state bank Caisse des Depots, the Paris-Dauphine University, the Center for Energy and Environmental Policy Research in the United States and University College Dublin collaborated to evaluate the scheme’s trial period, which has widely been viewed as a failure.
The EU’s flagship carbon trading scheme requires companies to buy permits for each tonne of carbon they emit. Carbon output is capped and the level is lowered year by year.
The scheme’s first trading phase ran from 2005 to 2007. Installations in the 27-nation bloc were over-allocated with carbon permits and the carbon price fell to zero.
The research concluded that although there were many problems in the first phase, they were overcome and did not hamper the scheme’s ultimate objective of reducing emissions. … SOURCE
Now, as some of you might have noticed, I’m a suspicious fellow and I like to run the numbers myself. So, what numbers should we be looking at here?
After some thought, I decided that I would look at the change from the four years prior to the institution of the carbon trading scheme (2001 through 2004), to the first four years of the scheme (2005 through 2008). [Figures for 2009 are not yet available] That would let me see if things improved or got worse.
The most logical measures to look at, it seemed to me, were per capita fuel use and CO2 emissions . (Excel spreadsheet) Using per capita figures removes the effects of population changes . If we just looked at fuel use, for example, a population increase would affect the fuel use. I didn’t want to be measuring the effect of population changes, so I used per capita figures.
Using those measures, I decided to compare the EU with the US. Their economies are of a comparable size and development. Since the US is the global CO2 pariah, and has no carbon trading scheme, that would give me a good baseline to compare with the EU performance.
Without further prologue, here are my results:
Figure 1. Percentage change from the period before the EU carbon trading scheme (average 2001-2004) to the period after the carbon trading scheme (average 2005-2008). All measurements are per capita.
By every single measure, the US has outperformed the EU. And the most telling point is that per capita, EU carbon dioxide emissions have increased since 2005 when the scheme started, while US carbon dioxide emissions have decreased. For a scheme designed to reduce emissions, that’s not good news.
The US did better by every measure than the EU, and did it without any restriction on carbon. Now perhaps some folks in a think-tank somewhere call that a whacking great success for the trading scheme … but not on my planet. Call me crazy, but my conclusion is that the EU carbon trading scheme was a failure.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Addressing the comments about the new country additions to the EU. I wouldn’t paint them with a broad brush as being ‘backwards’. I personally judge a country’s preparations for the future, by the number of nuclear power plants under construction. Running them is cheap and there’s 1000 years of fuel around depending on technology. The cost is mostly in construction of the plant. And the waste is a political, not economic or technical problem.
Using that metric, I see the Ukraine generating 47% of its electricity with nukes, compared to 20% in the USA. While the Ukrainians aren’t currently building more, they have 2 on order and 20 more planned. Finland, currently generating 30% of tits electricity with nukes, has 1 under construction. Slovakia is building 2 to augment their current 56%. Poland, currently at zero, has 6 proposed. http://www.world-nuclear.org/info/reactors.html
The USA has none, that’s zero, new starts in the past 30 years. Thank you, Jane Fonda.
Holy cow. With arctic ice growing, the glaciers will be calving. Robust calving for many more decades.
It seems the bull market for carbon poker chips was backed by B.S and not reality.
I would steer away from this carbon trading baloney.
That is a nice picture as background for your bar graphs. Is that South Sister Mountain in Central Oregon?
Love the volcano you put in the background of your graph!
Unfortunately, subtlety is wasted on the folks who are still worried about atmospheric C02.
What appears to be ‘news’ today cannot be seen as such, ie the dramatically released idea that Obama will drill. He is not interested in drilling, his entire empire and deeply held philosophies about America will attest. He is happy for others to drill, such as Soros deal in Brazil. But not America. With this logic, if the media does not announce something, ie the complete fraud of the climate industry, it doe not exist. It is well documented Obama was in on the development of the Chicago Climate Exchange (in which Goldman Sachs, Al Gore and others are invested). In the past few days, HSBC bank has delisted the CCX from its Climate Index due to poor performance. This has received almost no coverage but it seems to me huge news. Trillions are at stake in carbon trading, the drilling story is smoke.
Curiousgeorge (11:52:14) : — agreed, it could happen differently. But no prudent nation will take that chance. A nation that intends to win must have oil and lots of it.
One can predict a scenario in which the US military gets spread out across the world, fighting dozens of small battles. Simply transporting needed supplies to the battleground requires great volumes of oil, as most ships are not nuclear-powered. The Gulf War was conducted in the midst of oil fields, but that will not necessarily be the case in future conflicts.
A quick war is of course best, but an outnumbered or out-equipped enemy will attempt to prolong the war and extend our supply lines – this is classic war tactics.
Cap and trade will always maximise emissions, as it creates a mechanism to fill out any under-utilised capacity, and a financial incentive to go with it. Any company that is not using its allocation has a fiduciary responsibility to its shareholders to flog the spare capacity on. It was predictable before it started, and you only have to look at the low-life involved in carbon trading, from Ken Lay onwards, to know that it was never intended to reduce emissions. It’s just as well that there is little or no threat of catastrophic CO2 related AGW.
Well, they know it was a failure for sure. But they also know it was a very good money maker instrument. That was its goal.
gg
“I meant, obviously, by any of the measures that I used – the changes in per capita oil, gas, coal, and CO2 from the first period to the second. By any of those measures, per capita the US did better than the EU.
But you likely knew that”
The point is that, that’s BS. Since “the world will die because of AGW” is based on human CO2 output, how we get the output dosn’t matter, oil, coal, bad breath makes no difference. The amount does. You saying that the USA has reduced it’s C02 output from 23 tonnes to 22 tonnes per person while the EU has increased it’s CO2 output from 8.9 tonnes to 9 tonnes per person and becuase the USA is in decline while the EU isn’t indicates the US hass done better.
It’s like saying “you have never killed anyone but you are thinking about it, I’v killed 100’s of people but in the last 2 years i stoped” QED, im better than you because i havent murdered anyone latley while you are thinking of it.
I really didn’t wont to post here but, that is just crap and since no one else could be bothered to call you out, i must. You have decided to mislead people with your post, no way around that, you chose the only thing that could make the USA look good “killing 8 babies instead of 12, while th eu moves from 1 to 2”.
/me smiles, yep i know this is probably not the proper way.
Meanwhile, here in Australia, the Queensland state government just signed another multi-billion dollar natural gas deal. The EU gas usage increase just underlines how important natural gas is becoming, and I wouldn’t be surprised if it is because increasing numbers of windfarms needing gas generation backup.
The meme that natural gas is somehow cleaner than coal just produces win-win in Australia – plenty of gas, plenty of coal. You’re free to import either.
I equate per capita fuel use with quality of life hence it looks like we’re improving quality of life quicker in Europe than the States. Maybe it’s to do with the Eastern block countries coming into the European fold and doing fast catchup.
Dan in California (12:08:30) :
Natural gas was and is still cheep in eastern europe, Soviet nuclear tech was dangerouse. There is a great misunderstanding about economics of nuclear power as shown by your “1000 years of fuel around depending on technology” comment ehich could be said as “lets make shit up because we havn’t thought about what we have been told”.
The earth has mass cheep fuel, look up the reason why the west and so every one else went for uranium.
Willis Eschenbach (11:41:36) :
“I don’t know if you are serious, but the lag time between opening up a field for leases and actually getting some fuel out of it is on the order of a a decade. Unless you are expecting a really, really, really long war, oil in un-leased fields at the start of the war will be there at the end of the war.
The only way that Yergin’s plan could work would be to lease the fields, drill the wells, and then just cap them until there is a war … like that’s gonna happen.
Conclusion? If we want to have our own oil in case of a war, we should start leasing now.”
Willis, yes, I am serious. Not just I, but Mr. Yergin is, too, along with thousands of sober oil executives and previous Presidents. The USA did exactly that during WWII, using (of course) the technology of the day. We can and will do much better using today’s technology. It appears you have not read The Prize – something that I highly recommend.
The decades-to-develop idea is true but only for a very few select oil fields. We have technology to bring on oil production in a matter of a few weeks to a few months.
Oil is far too important, as I wrote above (and so did Yergin) to deplete our resources.
@ur momisugly Roger Sowell (14:00:26) : I’m not disputing that oil is a necessary logistical commodity to keep the economy as well as the military in business. But I think you are making a mistake in thinking of current or future conflicts in terms of a defined “battlefield” with conventional forces arrayed against each other with one side or the other constrained by lengthy supply lines. That isn’t even the case today. We (and our opponents – both declared and undeclared ) have very few actual combat forces in play, even in Afganistan, compared to past conflicts.
Modern warfare is played out on a much larger stage than the minor firefights one sees or hears about on the nightly news. For example; the media played the recent fight in Marjeh as if it were the Normandy landing, when in fact it was a minor battalion level operation that would have gone unnoticed in “classic” warfare. It was, in effect, a mopping up operation.
Lastly, a famous quote: “Only the dead have seen the end of war”. What isn’t so obvious, then as now, is how significantly the conduct of warfare has changed, largely due to technology. And I’m referring to far more than just pure military toys.
Here is a link to a summary of the study:
http://www.aprec.net/documents/10-01-29_rt_note_eu_ets_2008_eng.pdf
As for Watts’ analysis, I think one would have to factor in weather conditions. Did the U.S. or the E.U. have warmer summers or cooler winters?
Oh, here is something Watts did not consider, the report summary says: “Compliance was achieved by importing CER/ERUs issued for Kyoto projects and by borrowing allowances.”
We need oil and coal for energy to develop technology.
I think of it like the yolk of the earth, we need it for growth and once we have developed enough we will have the technology to be fully sustainable.
Limiting the energy supply only serves to slow this initial development…
drilling is a hoax from Obama to get cap and tax pushed through. More government control of the people…
Curiousgeorge: You are correct that modern wars have not had the huge logistics and fuel demands that were part of World War II. But that certainly does not rule out another world-wide conflict of long duration.
Still, the Gulf War required immense amounts of petroleum fuel to transport the men, equipment, and supplies from the coalition countries to the battleground. And there was a defined battleground with two opposing sides. It simply did not last very long. Vietnam was many things, but one of those was a reminder that a conflict can last many years and be very far away, again requiring energy (oil) to prosecute the war.
Again, you may be correct in your assessment. I would hate to bet the entire future of any nation on that assessment. As some military commander said, a nation without oil should not rattle any sabres.
The point of carbon trading is to cap or reduce the living standards of those in Western Europe. Without researching it I would bet the Western European economy has taken a dive, or at least the living standards for the bottom 80%. A quick check shows rising unemployment, lower GDP per capita growth, more debt. The east is still in a development phase so there is a transfer of wealth from West to East, much like Americas transfer of wealth to Asia. Also, immigration in the US like EU’s immigration and growth in member countries inflates total GDP, masking the lowering of living standards and economic growth in the developed world. Thats globalization.
Anyways, they sold their freedom by agreeing to the EU. They are toast. Just a matter of time before they lose their social benefits (Canada too).
Cap and trade is the necessary element for the new global currency, the carbon dollar, which will replace the USD as the worlds reserve currency and be under the control of an international agency, controlled by the same folks who control the BIS and who gave us the Basel accords which trashed both the European and US economy.
Just to lighten the mood a bit …Jesse and Tiger have been doing some exploratory drilling too but I don’t think they deserve a post here.
Don B (13:09:24)
Dunno, I snagged it off a random site …
Roger Sowell (15:39:40)
Roger, if you think you can go from a lease to a productive offshore well in “a few months”, I don’t know what to say to you. Here’s the US Energy Information Administration weighing in on the question, from Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf :
2030 … that’s a frickin’ long war …
tides:
You are implying a fixed size industrial base per capita. You will note that cap and trade incentivised tata to destroy 1700 jobs in the uk to sell on the carbon credits. The UK will still consume the same amount of steel but the co2 emissions are in india. Cap and trade was sold as reducing carbon intensity (although it is hard not to come away with the conclusion it was designed to silence opposition, as everybody has to go begging to government for carbon credits). This is exactly the measure Willis is using so unless you are suggesting America has de-industrialised more than the eu, and that is why it has reduced its emissions then I don’t understand your claim. You are in effect suggesting that consumers are not responsible for the CO2 produced in their name, and the net effect of cap and trade should not be to reduce c02 intensity, but to force de-industrialiazation. If governments really believe that, they should sell it as such – but there are easier ways to de-industrialize. Ban factories.
Willis, yes, those fields in deep water are among the “few select oil fields” I wrote about. However, the reference you gave does not assume a war basis for development. The time frames of decades will be shortened considerably if and when a war’s urgency is a reality.
Meanwhile, there are huge oil reserves within directional drilling distance from shore in California, and even bigger on-shore oil reserves in the Dakotas (Bakken oil formation). If we needed oil for a war, we have plenty.
It is also notable that offshore oil resources are extremely vulnerable to enemy attack during a war, so any reliance on such is misplaced (excepting those accessible by directional drilling from shore).