Via Eurekalert: Carbon swap bank to beat climate change
Could swapping carbon emissions rather than trading them reduce climate change?
Australian researchers have suggested that nations should abandon the concept of carbon emissions trading in favor of a carbon swap bank that might lead to genuine reductions in the amount of carbon dioxide greenhouse gas entering the atmosphere and so provide a mechanism for reducing climate change. Details of the carbon swap bank are outlined in the journal Interdisciplinary Environmental Review.
Carbon emissions trading was to be the economic environmental solution to climate change. The original impetus of the Copenhagen Treaty in 2010 was to mitigate rising global average temperature by allowing nations that reduced their carbon emissions to trade with other nations and so motivate all nations to find ways of cutting pollution. The idea for an emission trading scheme first emerged in the 1960s in the USA. “Cap and trade” was essentially an invention of economists, and in particular, Canadian economist JH Dales in 1968. The first such cap-and-trade system was launched as part of the US Acid Rain Program in Title IV of the 1990 Clean Air Act but similar schemes have been mooted in the face of global warming.
Emissions trading became part of the Kyoto Protocol through the efforts of the Clinton Administration. Its success in reducing sulfur dioxide emissions and so reducing acid rain was seen as successful and inexpensive. The international adoption of cap-and-trade followed from the notion that, “We’ve found an effective tool, domestically, for controlling emissions, and let’s try it internationally.”
Unfortunately, economic solutions to scientific and engineering problems rarely succeed especially once politicians become involved. Various proposed bills in the USA and Australia faltered because of agricultural issues and a failure to force those industries that produce the greatest tonnage of carbon dioxide pollution to alter their technologies. Moreover, carbon trading became nothing more than a financial vehicle with excessive derivatives, an uncontrolled offset market, and distortion of permits and taxes.
According to Carolyn Currie of Public Private Sector Partnerships, in Sydney, Australia, a carbon swap bank would allow direct deposits of sequestered carbon to be added and withdrawals of emission rights to be made. The process would not work like an investment futures market but would be facilitated by direct swap arrangements between a supplier of carbon sequestering technologies and methods, and those of the carbon polluter.
This approach gets around some of the major obstacles to carbon trading, namely the accurate measurement of a nation’s emissions and the regulation and enforcement of emissions controls internationally. More troublesome is the fact that emissions trading is not incentive compatible and so can result in perverse incentives whereby a polluting firm given emission permits has no incentive to reduce emissions further because future emissions permits might then be restricted. Similarly, regions, such as the European Union, could protect the industries within member states by allocating permits to reduce international competition from outside such a region.
There are five main advantages to a carbon swap bank over other carbon emission controls, according to Currie:
- the macroeconomic significance of avoiding the free market flaws of volatility in price
- mitigation of the uncertainty that an emissions trading scheme will actually induce significant changes in technology
- the likelihood that changes will not be confined to the domestic economies of developed nations
- the cost of a permit may be significantly higher than carbon swap arrangements when corruption of the permit process and the profiteering evident in the EU are taken into account
- changes towards sequestration and emissions reduction can be identified and monitored and progress to lower carbon cap nationally assessed by listing all specific projects aimed to sequester carbon and reduce emissions.
While developed nations are now baulking at the implementation of carbon emissions trading schemes, a government could easily experiment with a carbon swap bank to benefit, for instance, its forestry and agricultural sectors, while reducing its emissions, based on the concept of increasing productivity in the sequestering sector, while preserving non-renewable resources for future generations; no international agreements would be needed and there would be no detrimental effect on national industry or competitiveness, and no potential for financial wizards to embroil carbon emissions in their vicious circle of boom and bust, concludes Currie.
“A solution to climate change economics – a carbon swap bank” in Interdisciplinary Environmental Review, 2010, 11, 236-247
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lol, these loons sound more idiotic as each day passes. This scheme would create a workforce of heavy breathers. People will run their vehicles, catch the CO2 and sell it to businesses.
Australian politicians (particularly the Greens) and ideas like this almost make me disappointed to be an Aussie.
Re: Cynthia Lauren Thorpe says:
January 7, 2011 at 8:08 pm
your use of ‘they’ rather than ‘we’ makes it sound like you are not an Aussie, although you reside here. Please don’t lump us all together as having the same ideas on everything. That’s patently incorrect and I think you have just insulted a lot of us.
Cynthia Lauren Thorpe says:
CLT – don’t display your ignorance by reflecting in such a marginal part of the Aussi thought spectrum.
I don’t know where you are from but there is little doubt you are having an emotive moment. Please check both the overall and economic world freedom indexes and get you head straight! Let me know if you are from one of the very few countries that beat Australia.
If I don’t hear from you, in this forum, I will conclude you are a whinging pom or a whining yank!
Mesa Econoguy says:
January 7, 2011 at 8:06 pm (Edit)
The underlying “asset”, such as it is, of carbon offsets is CO2 absorption via various photosynthetic plants and organisms, which is an approximation given size, location, climate (ironically), etc.
So unlike a traditional market-traded asset vehicle, CO2 absorbing asset derivatives are 1) unverifiable, 2) highly variable and 3) therefore unable to be accurately priced, unless you are carbon-religious, i.e. on faith.
—…—
But I disagree that carbon-trading/carbon-offsets/carbon-taxes “have any” intrinsic value, regardless of whether they are “traded” (the various swap carbon schemes) or imposed (as taxes from a national/regional/internaional government.
Most of us put up with taxes because we believe/are indoctrinated into believeing that we get someting of value in return: a military, borders, hospitals, safer streets, more highways, air traffic radars, or whatever. (So far, not enough people have found that we are getting way too little for paying way too much for way too many “nice ideas” that other peole want, but that is a different discussion.)
But carbon taxes or carbon has NO intrinsic value at all under any circumstances. At best, one can imagine that an imaginary foreign third-world dictator will receive a part of our carbon trading money (after it gets filtered through the government and through the UN and through hundreds/thousands of Non-government “agencies/eco-statist directorates) so that his country “puts aside” carbon-eating things like plants and forests. in turn, that corrupt third world dictator promises NOT to develop his country or help his people advance and get power, lighting, clean water, sewage treatment plants, irrigation, and better food, clothing and shelter.
In truth, what little money actually gets through the corrupt UN/government/international agencies will simple ONLY go to that third world dictator and his family and cronies who ALREADY have power, food, lights, and water.
NO ONE – anywhere – benefits. (Except those corrupt third world dictators, their governments, our governments, our universities and their corrupt “professors” who make their living and their life sucking off of the CAGW’s every-flowing money from governments and the UN.
Does any one see a pattern here?
I couldn’t but help having this funny vision in my head whilst reading that tripe about carbon swap shops.
I go into one of these places, walk up to the counter (manned no doubt by a greenie) drop my pants, turn my back whilst bending over and let out a thunder of methane and say “I’d like to cash that in thanks” Ѿ {:ﺍ)
It scares the bejesus out of these people that the AGW Scam may die without creating some kind, any kind of money making scheme to bilk the world. Come on, they really need the money – throw them a bone—a trillion or two will put them off and make them happy.
I’ve considered posting on one of my websites that if I don’t get enough credit offset donations sent to my PayPal account I would fly, not sail to Hawaii on my upcoming vacation, and if any concerned citizens out there had an ounce of compassion for the health of the planet they’d dig deep and pay often.
Hey – it’s not like I’m unwilling to deal, here, but Mother Earth could use some help and I’m doing my part the best way I know how.
Get your carbon offset certificate here, folks!
http://www.freecarbonoffsets.com/genCert.do
Z
Baa Humbug says:
January 7, 2011 at 9:41 pm
I couldn’t but help having this funny vision in my head whilst reading that tripe about carbon swap shops.
I go into one of these places, walk up to the counter (manned no doubt by a greenie) drop my pants, turn my back whilst bending over and let out a thunder of methane and say “I’d like to cash that in thanks” Ѿ {:ﺍ)
————————————————————-
Baa, maybe they could just put some credits on your phone for you? Now that would be convenient!
And yeah, CLT, back off. There are quite a few of us enslaved, brainwashed colonials lurking around WUWT.
Any scheme that demonizes a life giving gas in the name of ‘saving the planet’ with the intent of impoverishing the western world is, in most peoples eyes, FRAUD. If anyone cares to look at the details of what was agreed in Cancon (or if you like Cancun) it was agreed that The World Bank, yes them!! would oversee any carbon trading scheme. Now that should tell you all you need to know.
If you go to the site to create a certificate of stupidity please do not fail to indicate the unit of currency. In the US that would be the yuan (元). It is the Euro in the former free nations of Europe (€), and so on.
Sub-prime mortgages are out of fashion. Bankers will need something new to “earn” mega-bonuses. Perhaps carbon swaps will do.
Can’t you guys pick an Aussie spoof yet?
It’s obvious that the researchers want to try their hands in the bank’s donation room.
Re Baa Humbug says:
January 7, 2011 at 9:41 pm
“I go into one of these places, walk up to the counter (manned no doubt by a greenie) drop my pants, turn my back whilst bending over and let out a thunder of methane – – ”
Didn’t an act like this spark one of the Jewish revolts during Roman times?
Baa Humbug says:
January 7, 2011 at 9:41 pm
“I’d like to cash that in thanks” Ѿ {:ﺍ)
=================================
So you’re saying wealth creation is just a matter of eating beans and broccoli for three days prior? I like that business model ;o)
Don`t these idiots know the games over, or are they blind to what has happened in New Zealand where apparently there has been NO warming since 1960.
To Johanna, Pat Devine etc,
We, as a nation, voted them in now we have to wear it. Not you, me or CLT but that is no excuse for the nation as a whole. Dividing us as an opposition is counter productive and truths should be recognised. Gee! I wish I knew how to make smiley faces.
Cynthia Lauren Thorpe says:
January 7, 2011 at 8:38 pm about shooting deer from choppers….
When Kakadu was declared a national park to stop uranium exploration, they had water buffalo herds running wild, some with diseases (Bubalus bubalis for the scientists). The buffalo were brought in from Indonesia about the mid 1800s from memory, but they were not native, so they should be shot. About 20,000 of them, some machine gunned from choppers.
But Oh Dear! not so far away in another park on Cobourg Peninsula, there were herds of banteng, Bos (Bibos) javanicus, a type of cattle also from Indonesia ca. 1850. Problem is, the cows were getting rare in Indo, but flourishing at Cobourg, so they were declared protected except for an adjacent private property where you can go game hunting.
I wonder what % of gene difference there is between a buffalo and a banteng? It’s probably innocently tiny, but enough to get you shot.
So Kakadu was spared the buffalo (except for a small herd maintained behind fences for Aborigine food). Whether this helped or not, there was great excitement late one day at the Park Ranger Centre (where they are a bunch of greenies) almost ecstacy as reports came in that the first emu for many years had wandered in from adjacent Arnhem Land, where whiteys could not go without a permit. The rangers went on an excited early morning expedition, but all they found was the remains of a fire and some emu bones. The locals have often said that a .22 rifle makes hunting so easy.
Life is seldom straightforward when people mess with Nature.
Reply to Australian researchers in McAuliffe style:
“NUTS!”
Kilted Mushroom says:
January 8, 2011 at 3:00 am
To Johanna, Pat Devine etc,
We, as a nation, voted them in now we have to wear it. Not you, me or CLT but that is no excuse for the nation as a whole. Dividing us as an opposition is counter productive and truths should be recognised. Gee! I wish I knew how to make smiley faces.
——————————————————————
KM, I accept (but deplore) the results of the democratic process. What gets up my nose is generalisations about us all being cowed products of British colonialism. It is not true, either demographically or politically.
As for the topic at hand, the proposal resembles one of those tortured derivatives beloved of the financial sector. They are usually dreamed up with the intention of making money. Naive environmentalists have jumped on the bandwagon, no doubt assisted by or cribbing from said financiers. What they don’t get is that the ‘little crumbs’ (cf Bonfire of the Vanities) add up to a truckload of money.
Deutsche Bank and their pals love this stuff. At a minimum, they will garner fat consultancy fees for devising/developing and establishing same. If they are really lucky, they might get to have a hand in running it, or at least being players, collecting a few ‘crumbs’ along the way.
I don’t understand why greenies, who are supposedly suspicious (at best) of capitalism, fall for one shonky scheme after another that makes crooks rich. Whether it be carbon trading in Denmark, the Mafia in the windmill rorts in Sicily, or shonky insulation installers in Australia, they fall for it every time. It’s like taking candy from a baby.
The fact that it is not their money may partly explain things. Although, I’m not entirely convinced of that.
Mesa Econoguy says:
January 7, 2011 at 8:06 pm
“So unlike a traditional market-traded asset vehicle, CO2 absorbing asset derivatives are 1) unverifiable, 2) highly variable and 3) therefore unable to be accurately priced, unless you are carbon-religious, i.e. on faith.”
You left out the most important point.
The assets maximum value is the difference between the price of carbon fuels and the cost of a ‘substitute’.
If the price of coal/oil/natural gas goes up the value of ‘carbon offsets’ decreases.
I like the code words/phrases in the article. It leaves no doubt where these people stand:
“carbon polluters”
“avoiding the free market flaws”
“corruption of the permit process and the profiteering”
“protect the industries within member states”
Sigh. It’s the same old, woolly socialist tripe that’s been around for a long time.
How long before I get an email suggesting I have won several million carbon credits and all I have to do to claim it is to send £x,000 to somewhere or other?
GERMANY STEPS BACKWARDS TO SET UP NATIONAL ENERGY RATIONING
This is serious. A new law has been passed by the German government, quietly and almost unnoticed. Soon, the government will tell its citizens how much energy they can consume.
The Law is called “Gesetz über Energiedienstleistungen und andere Energieeffizienzmaßnahmen vom 4. November 2010 (BGBl. I S. 1483)” which translates as “The Law on Energy Services and other Energy Efficiency Measures dated 4 November 2010 (BGBl. I S. 1483)”
With this law, the free market is going to be abolished, carefully converted with efforts to…“remove existing market obstacles and deficiencies.“
Of course the law provides for the creation of a new bureaucracy to implement its provisions – with the state taking over authority. That means citizens will have to be – and can be forced – to make comprehensive energy savings in a very short time. And to make sure that functions: “Power companies, grid operators and energy retail companies are especially required to carry out special obligations in order to create the conditions for the development and promotion of a market for energy service companies and for creating other measures for improving energy efficiency for the consumer. Included in this are especially information, promotion and assurance obligations. These companies are also obligated to maintain informational billing of energy consumption.” So power and energy companies will be required to collect consumption data on each and every citizen and provide the means to meet energy efficiency targets.
All this will have to be monitored of course – by a new powerful bureaucracy, which will have powers to run lives. Paragraph 9 of the law stipulates which government body will observe our energy consumption. The “Federal Office for Economics and Export Control” will take on the duties of the “Federal Office for Energy Efficiency”.
Maybe I’ve seen too much science fiction, but it appears the Orwellian surveillance society is fast becoming a reality; you could call it East Germany v2.0 . The whole thing has a system to it:
1.) Implementation of “smart” grids with “smart” meters that can be read remotely.
2.) Outsourcing of meter reading by public utilities.
3.) State control of meter reading.
4.) Regulating the energy consumption per person/ household etc.
5.) Limiting of energy use by using “smart” meters with automatic shut-off switches.
If the German State can pass this, then it can pretty much do whatever it pleases. Gone are the days of a government that is there to serve its citizens. Here to stay is a group of masters who are going to boss the citizens around and tell them how to live. They can do what they want and there is nothing now to stop them. Today there is no political opposition to this coming green tyranny – all parties in Germany, from right to left, are for it. They are only fighting each other to see who gets to have the fun of carrying out this dangerous experiment.
But of course it’s all in the name of “saving the planet” from climate catastrophe. Never mind what Edenhofer of the PIK said awhile back, http://thegwpf.org/ipcc-news/1877-ipcc-official-climate-policy-is-redistributing-the-worlds-wealth.html They are moving quickly now because climate scepticism is rising.
http://www.eike-klima-energie.eu/news-anzeige/energierationierung-in-friedenszeiten-vorbereitet-parlament-verabschiedet-gesetz-zur-erfassung-des-energieverbrauches-aller-buerger/
Slightly off topic but take a look at the latest eco facist sci-fi dystopia.