The months of flatlining at the Chicago Climate Exchange (CCX) should be a hint to the rest of the world that carbon trading is dead. Time to take it off life support. Even at 10 cents a ton, nobody wants it. At it’s peak in July 2008, it traded for $7.50 per ton of CO2.
See who is on the CCX advisory board here
From ACM:
Token Gesture Alert as the government of New Zealand, unable to think straight thanks to years of green environmental propaganda, brings in its emissions trading scheme.
New Zealand emits about 0.1% of global CO2. So even if New Zealand reduced its emissions to zero overnight, AND it were demonstrated that the climate sensitivity is large enough to notice (which it hasn’t been), it would make not the slightest bit of difference to the climate.
Not only that, but I hardly think that China and India are going to look at New Zealand, and, wracked with guilt and remorse by the plucky little country’s valiant efforts to save the planet, stop their coal fired economies in their tracks. Not on your life. China and India are far too busy building their prosperity and lifting their populations out of poverty. It’s only wealthy countries can afford the luxury of pointless environmental gestures like this.
So the only result will be higher prices for poor Kiwis. Everything will cost more: electricity, petrol, groceries, consumer goods – everything – since everything (virtually) requires energy for its production or transportation. As the ABC reports:
New Zealanders are bracing for higher electricity and fuel prices with the introduction of an emissions trading scheme (ETS).
From today New Zealanders will pay around three cents a litre more for fuel.
Electricity bills are set to increase by up to 5 per cent as companies pass on the costs of buying carbon credits to consumers.
Environment minister Dr Nick Smith says New Zealand had to act because its greenhouse gas emissions have increased by 25 per cent over the past 20 years. [So from absolutely tiny, to slightly less absolutely tiny]
“It’s actually about New Zealand starting the path, starting the change to a less carbon intensive economy,” he said. (source)
Good luck with that. Just watch your industries move offshore, and your economy decline for no purpose whatsoever.
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Charlie,
NZ population is 4,368,683, not 22 million, so an even smaller effect on global CO2.
http://www.stats.govt.nz/methods_and_services/population_clock.aspx
NZ needs tourists, but ETS will not help.
http://www.tourismnewzealand.com/news-and-features/news/new-forecasts-show-outlook-positive-for-tourism-sector
Ok for the unenlightened, here is a list of the different emissions trading instruments you can trade on CCX:
Product Description
SFI® Futures and options contracts based on U.S. EPA Acid Rain Program SO2 Emission Allowances
NFI™ Futures and options contracts based on U.S. EPA CAIR Annual NOx Emission Allowances and U.S. EPA NOx
“Ozone Season” SIP Call Emission Allowances
RGGI Futures and options contracts based on CO2 allowances under RGGI, a cap-and-trade program comprised of ten
participating New England and Mid-Atlantic States
CFI®
CFI-US
Futures and options contracts based on the Carbon Financial Instrument (CFI), a greenhouse gas emission spot
contract issued by the Chicago Climate Exchange under its a voluntary but legally binding cap-and-trade system.
CFIs with expirations starting in 2013 require delivery of GHG emission allowances that comply with a potential mandatory
federal U.S. greenhouse gas cap-and-trade program
CCARCRT
Futures and options contracts based on California Climate Action Registry CLIMATE RESERVE TONNES™ (CCAR
CRT™
CER Futures & options contracts based on Kyoto-compliant GHG reduction credits issued by the UN for approved and
verifi ed projects in developing countries
So, of these, its the CFI spot price that is flatlined at .10 per tonne. The 2013 CFI-US futures, however, have picked up value in recent months (after tanking during Hopenhagen) as anticipation of a successful passage of cap and trade in congress raises hopes that those 2013 futures are actually going to be worth a bit more than jack and squat when time comes to deliver the GHG contracts.
Since California has an operating legal regime of granting carbon credits and requirements that polluters buy them, the CCAR trading remains at decent value. Definitely down from their prior peaks, but not dead by any means.
The primary problem with the CFI spot price is that no governments recognise the CFI instrument yet, so its pretty much worthless, but the other instruments on the exchange, particularly the Sulphur Dioxide and NOx emissions trading, remains operating at decent value since there are EPA requirements on these.
Imagine that JP Morgan’s Federal Reserve Bank started issuing Federal Reserve notes before the Federal Reserve Act of 1913 passed. They’d be pretty much worthless without the legal imprimature that makes them matter, right? Same thing with the CFI spot price.
Pete Hayes says:
“July 1, 2010 at 12:05 am
My sympathy goes out to the Kiwi electorate. John Key, the Prime Minister is obviously as underhanded as the UK’s politicians. Does this mean I will have to pay more for my N.Z. lamb and butter?”
You probably will but for the past three months or so, French supermarkets have been selling NZ lamb at rock-bottom prices…
Will this mean that the All-Blacks rugby team will be giving up flying around the world? Be a bit of a relief to be sure.
The months of flatlining at the Chicago Climate Exchange (CCX) should be a hint to the rest of the world that carbon trading is dead.
Here in Europe the Great Carbon Swindle is proceeding nicely. The thieves want a floor price setting though, just to be safe. OPM you can just never steal enough.
Seem to remember the US fighting a revolution to sever itself from European swindling.
In a way this is good news for Australians, although I feel for our brothers and sisters across the pond. Aussies will now see the kind of inflation and other economic rammifications of an ETS we could expect should we be crazy enough to vote in a scheme of our own.
At the moment our new PM is too busy arm-wrestling with the mining industry in the name of fairness… yes, because it is distinctly unfair that the mining industry pay the same level of corporate income taxes as other industries…
John Wright says:
Nah because the Kiwi dollar (peso?) will tumble relative to the Aussie dollar, so the Kiwi products will still be cheap 🙂
Jack Simmons says:
July 1, 2010 at 12:13 am
Training Film For Carbon Trading Salesmen
ROTF! That made my week! And properly he’s all GREEN!
Or is that ‘N’ better as a ‘D’?
The one thing that worries me is NZ’s got a habit of doing something completely asinine, then about half the time siting back and laughing their asses off as every other country in the world follows suit – no idea how that works, but it does – mind you the other half of the time they find themselves navigating an inland waterway without a means of propulsion 🙂
As for the Chicago market…I’m still waiting for it go lower (10c per kiloton?) – I so want a stock certificate to frame on my wall.
John from New Zealand says:
June 30, 2010 at 11:54 pm
The introduction of the Emotions Trading Scam really pisses most Kiwi’s off. I can’t understand how Nick Smith (Minister of Climate Change Conjobs) can say we have the highest CO2 output per head of population
John
You haven’t. Last time I saw a UN sponsored estimate it was Qatar.
Word fail me. I have been working to have the ETS abandoned.. and failed. We’re the laughing stock of the developed world. Shame on Prime minister John Key. Shame on Environment minister Nick Smith. You have betrayed us.
jorgekafkazar says at June 30, 2010 at 11:22 pm
While I am sure Al Gore is interested in emissions trading, it’s not CO2 emissions that he is talking about.
Most regard it as economic suicide.
catastrophic AGW it is?
the current ETS show a fall in prices, because too many certificates are handed out. falling prices area feature of the current schemes, not an error. (they are an error for global climate though..)
over time, with fewer and fewer certificates being handed out for free,things will change.
posts like this one, demonstrate a lack of understanding of markets, lobby power and emission trading. sorry Anthony.
And the only political party to argue (no, fight) against the ETS is the ACT Party in NZ. They were treated as idiots and laughed at, scoffed at and called climate change deniers by the MP’s of every single other party.
But they still keep going. NZ desperately needs politicians like them!
I worked for John Key during the last election and I even had lunch with him. I am not going to vote for him based on the ETS alone.
I will vote Greens as the ETS has stuffed NZ up big time and we may as well go down the swanny quickly.
Nick Smith’s new name is Thick Smith.
Perry says:
July 1, 2010 at 12:18 am
NZ needs tourists, but ETS will not help.
Thats right all tourists will be paying too.
As a Kiwi who left NZ 30 years ago to live in France and Germany, I can only say that this latest exercise in ruinous socialist economics does not surprise me. The country has been going down hill for years and Kiwis have been fleeing in droves to Australia and further afield. They are being replaced by Asians. More than any country I know, it has a political culture that is dominated by left-wing elites and is totally in thrall to political correctness. Only the UK may be worse.
I do not recognize my country anymore.
“Even at 10 cents a ton, nobody wants it.”
Since there are no buyers the price isn’t 10 cents, it’s 0, zero, nil, nada, rien, nichts u.z.w.
And it will stay that way, the New Zeelanders are buying nothing.
Presumably if New Zealand is the first country to enter the economic abyss caused by carbon trading, then hopefully it will be one of the first out of it, once their politicians finally realise the stupidity of this.
This is a political gimmick of the ‘greener than thou’ kind, beloved by politicians with no experience of the real world outside their own murky world of politics.
Would the last NZ person to emmigrate to Oz please remember to turn off the lights !
They’ll already be off.
We’re not all off to Oz Ozzie John, we are off to Canada.
It will be interesting to see how this fails, because fail it will. The whole idea of these instruments is to reduce their number over time, thereby limiting CO2 emissions, but I wonder how many people have really thought it through.
We are told that we have to lower our emissions by 80% from current levels, i.e. from 30 gigatons to 6GT. Our current emissions from breathing out are about 2GT and that will rise to nearly 3GT when our population inevitably grows to 10BN. That leaves us just 3GT to emit for all other activities, such as feeding, clothing and shelter, and that simply can’t be done. We wouldn’t even be able to build windmills to power ourselves at that rate. Even “government” would be impossible, we’d be back to feudal times. Feudal law might have “worked” when there was only a 100million of us, but with 10 billion?
Paul Hanlon.
Reported in the Southland Times 25-08-2003
“National Party agriculture spokesman David Carter who, along with leader Bill English took part in the march, said an increasing number of scientists were now disputing the issue of global warming. By signing the Kyoto Protocol on climate change New Zealand had put itself at a hugely significant disadvantage, Mr Carter said. “Farmers are saying enough is enough. My advice to farmers is to keep the pressure on the Government because I think the Government will back down.”
Southland Times 08-08-2003
“National Party leader and Clutha Southland MP Bill English told the 50-strong crowd they were being asked to pay for speculative ventures that would struggle to meet the requirements of the Government’s own scientific research fund, while other countries waited for New Zealand agriculture to lose its competitive advantage.”
July 1 2010
At least twelve of the current National MP’s took part in the ‘fart tax’ March in 2003.
As well as the now Agriculture Minister David Carter and Finance Minister English there was the Minister of Environment, Climate Change and ACC Nick Smith, Police Minister Judith Collins, Fisheries Minister Phil Heatley, Associate Finance Minister Simon Power, Health Minister, Tony Ryall, and also Shane Ardern, Sandra Goudie, Paul Hutchinson, Alan Peachy and Lindsay Tisch.
Great cartoon at http://johnansell.wordpress.com/ “JULY FOOLS DAY”
John from New Zealand says:
The introduction of the Emotions Trading Scam really pisses most Kiwi’s off. I can’t understand how Nick Smith (Minister of Climate Change Conjobs) can say we have the highest CO2 output per head of population when we generate a large part of our electricity from hydro dams.
Maybe he was talking about the methane CO2 equivalent from all those head… of sheep?
So when will they be fitting gas collecting diapers to all them white fluffy ’emitters’?
And do you get ‘carbon offsets’ for all the CO2 sucked out of the air by your magnificent forests? (Do the math… trees suck out more than cars put in…)
On Markets:
In options trading, the ‘zero price’ is usually a nickel. This is so that strategies that need offsetting puts and calls can be completed, even if one leg of the trade is worthless on its own. So you will regularly see worthless calls and puts trading for $0.05 and sometimes with a bit of volume.
My take on the $0.10 price is that it’s a ‘zero’ functionally.
Oh, and per California and our wonderful success with our Carbon Cap and Tax … did anyone notice that our government is functionally bankrupt and we’ve got some counties with unemployment of 25% type scale? But our emissions are sure dropping fast. Don’t get much CO2 emitted from closed factories…
FWIW, my spouse has agreed that it’s OK if we move out of state… This from a person who would not even think of leaving the CITY just a couple of years ago. Perhaps something to do with the State issuing IOUs … and cutting working hours back (she’s a teacher) with unpaid days off… and cutting benefits… and rising prices…
But at least we can glory in knowing that we’re more smug than the folks without an ETS.
In fairness to Mr Key, he had a fairly sound reason for the ETS, a scientifically flawed as it is. NZ is completely upon trade and tourism and leans heavily upon a clean environmental image; John Key’s position was that to fail to have an ETS would be bad for business and he was even worried there might be trade retaliation. NZ has been the victim of unjustified and unethical trade practices by the USA and Europe, on equally spurious grounds in the past, so this is not a fantasy.
If you smug know-it-alls from the USA, Europe, Britain and Australia would please make more of an effort to persuade your own countrymen of the folly of AGW, instead of wasting your time chuckling at poor, vulnerable New Zealand, we would all be better off.