SPECIAL REPORT-The California Carbon Rush (Hold the Eureka!)
It could be worse than sticky, argues Gary Stern, a power utility executive. Stern lived through the disastrous deregulation of the California power market a decade ago and fears the carbon market will be small and open to manipulation. The state refuses to set a limit for prices. Traders could learn how to corner the market (think Enron) and then hold hostage utilities and factories with no option but to buy sky-high permits on the open market.
State officials say they are working on new safeguards to stop just such efforts and will unveil them in July. California also plans to hire an external monitor to watch the markets — a key recommendation of Stern. “I’m not saying we would expect the same thing to occur in the emissions markets,” he said. “However, we didn’t expect that to occur in the electricity markets.”
Even if all goes well, nine years of carbon trade won’t be enough to end worries about climate change, especially if other states and nations don’t pitch in.
“The ambition doesn’t add up in terms of what the science is calling for. In fact it doesn’t get close,” said Greenpeace forest campaigner Rolf Skar, who derides the decision to give away any pollution permits at all. He also turns up his nose at California’s plans to let industry pay for “offsets” — projects to soak up carbon, such as forest management.
Offsets are seen as an important price safety valve — letting a redwood grow bigger to capture carbon in its wood is cheaper than building a carbon-free power plant, and a substantial portion of California’s emissions reductions could come from such schemes.
Owners typically pay contractors to verify such projects — which is not dissimilar to a bond issuer paying a credit agency to rate it — but designers say the offset program avoids conflicts of interest and project standards are extremely strict.
To make a serious dent in emissions, regulators will target transportation. Cars, trucks and planes spew out 40 percent of the state’s carbon, more than utilities or industry.
The state’s climate change law could have been called the “California Petroleum Use Reduction Act,” Mary Nichols, California’s top climate change regulator, joked last year.
The state is the third biggest user of gasoline in the world, after the U.S. as a whole and China, but drivers can change emissions very quickly — by leaving the car in the garage or buying a new, more efficient, car.
“You are just trying to get people to drive less, effectively, which is probably going to be quite expensive,” said Sikorski of Barclays.
Auto fuels are pulled into the cap-and-trade system in 2015. Gasoline prices are sure to rise as distributors are forced to buy carbon permits.
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Arrggghh. We need to stop listening to these “experts” who claim that something or other was “unexpected”.
The people who design these systems know exactly what to expect, and have their Swiss bank accounts open and ready for the expected result. After it’s done and they’ve stolen a few trillions, the “experts” go around repeating the word “unexpected”, because this magic incantation prevents lawsuits.
There is no such thing as an unintended consequence.
If this wasn’t so catastrophic to the future of ordinary Californians it would be funny.
Sooner or later the reality will impose itself on California – how big is the State deficit this year?
On a very related note, …..pop quiz! Who said, “The conventional viewpoint says we need a jobs program and we need to cut welfare. Just the opposite! We need more welfare and fewer jobs. Jobs for every American is doomed to failure because of modern automation and production”????
Give up?
The newly elected governor of Cali, Jerry “Moonbeam” Brown, on his radio show 1995. Steve Goddard covered this little jewel. My sympathy to all the sane people left in Cali,………both of them.
sigh — I can’t believe CA is so foolish.
Is it even legal in the US for a State to impose the purchase of a Derivative Contract as a mandate?
“To make a serious dent in emissions, regulators will target transportation. Cars, trucks and planes spew out 40 percent of the state’s carbon, more than utilities or industry.”
I agree. People don’t need to drive cars when they can ‘telecommute’ from home, and trucks are just a waste of space, hauling useless things like chinese tv screens and food around, and does anyone really need to go on vacation? I mean, our great great great grandparents got on just fine without any of this carbon spewing nonsense.
/sarc.
The “green people”, many of whom feel that people are like a disease on their great “mother earth”, are their own best examples that prove their own hypothesis. California is an absolute joke and the best counter example of what NOT to do in almost any situation. Unless they can get the rest of us to pay for their follies they are ultimately doomed to cold, starvation and darkness.
To those with the willingness and wisdom to move their business, Wyoming offers no state or city income taxes, low property taxes and a better work ethic. You must, however, pass a short test regarding your willingness to leave California ideas behind.
Let’s just be honest and put the hammer and sickle under that red star to the left of the bear.
The mirror of Carbon Credits . . . . Fee In Tariffs
Ontario’s green energy numbers don’t add up:
Wholesale Average Weighted Cost (YTD) of Ontario electricity: 3.35 cents/kWh
Guaranteed 20-year contract price per kWh for solar panels (ground level): 64.2 cents/kWh
Guaranteed 20-year contract price per kWh for solar panels (roof-top): 80.2 cents/kWh
Guaranteed 20-year contract price per kWh for wind turbines: 13.5 cents/kWh
(link to microFIT rates, pdf)
Cost to the province in 2011 to reduce bills by 10% to hide increases caused by green energy programs until after the election: $1.1 billion
Ontario has promised to pay renewable energy producers up to 23 times the actual price for electricity which is the driver for increased bills and time-of-use billing. At risk of belaboring a point, sustainable subsidies are not sustainable. Premier Dalton McGuinty has pulled the plug on offshore wind projects – it’s time to end the FIT programs before they bankrupt us.
http://dailybayonet.com/?p=7923
California Climate Share s/b 16 tons?
[youtube=http://www.youtube.com/watch?v=iGmYhTYLbno&w=480&h=390]
One day we’re going to look back at this and we’re going to be aghast that we ever let this kind of obvious stupidity and nonsense run our lives. This is truly the tulip bulb fiasco of our day.
I live in the insane state of California. Unfortunately I am outnumbered by stupid people. I would love to leave but my wife insists on staying near family. As far as my driving habits go I really don’t have a viable choice. I live 23 miles from my work. A long time ago I had to take the bus system while my car was being fixed. I had to leave home at 5:45AM to MAYBE get to work by 9:00AM. I was late often but I couldn’t even go earlier as I caught the fist bus that ran as it was. Leaving work at 5:00PM would get me home at 8:30PM. That’s just not workable. We are too spread out to do things like get groceries or do other shopping without driving. None of this madness will change my behavior because it is not done optionally. I have to work. I have to eat. All this will do is take more money from me.
On a related note, Republicans counter attack Obama’s use of various “Czars.”
http://www.politico.com/news/stories/0211/49781.html
The advocates of California’s AB32 cap-n-trade scheme should be asked why they wouldn’t be in favor of significantly reducing carbon consumption through a much more simple, much more direct, and much more effective means.
Tax energy consumption in California so severely that significant reductions are a necessity among all of California’s energy consumers — agriculture, industry, the services sector, small businessmen, state and local governments, consumers, homeowners, legions of soccer moms driving SUVs — anybody and everybody whose presence in California adds to the state’s carbon footprint.
As a rough guess, a 100% tax on energy use at the point of consumption would do a credible job of significantly reducing California’s carbon footprint, possibly to a level which is three-quarters of what it is today.
How about it, advocates of California’s AB32 cap-n-trade scheme ……. If Anthropogenic Global Warming is in fact the kind of serious environmental problem you claim it to be, why would you not be in favor of taking the most direct, the most simple, and the most effective approach to quickly reducing California’s carbon footprint; i.e. by taxing California’s energy consumption severely?
Watching the liberal California establishment destroy their economy and way of life in the face of a globe that refuses to continue warming is going to be delicious!
Schadenfreude will simply be an unfortunate self-realization.
The Golden State is betting that its new carbon trading scheme can create jobs and cut emissions. Is that California dreaming? (7 pages)
http://graphics.thomsonreuters.com/11/01/CarbonTrade.pdf
“Last one to leave California, please turn off the lights….”
Unless it is a calm cloudy day, when the lights will already be off.
LOL !
;-}
Just remember, the same education theory that has been (deliberately) destroying the ability of Kalifornians to be able to perceive reality (by interfering with children’s normal development of cognitive processes via, e.g. inductive learning) for the last 60 years, has been at work in the rest of the country for at least 40. We are doomed 🙁
Sorry you guys got landed with Sir Nicholas “make me a lord” Stern in your neck of the woods.
Just a crazy thought…. could the now withdrawn plan to sell off the UK’s forests have anything to do with preparing for the privatisation of carbon credits through woodland ownership? Yeah….crazy, I know….
Bushy says:
February 18, 2011 at 7:28 am
“I seriously wonder if we as a collectively cognizant life form ( best I could come up with) will learn anything from this particular debacle when it is finally put to rest.”
I already learned that if the day comes i will leave the EU, i will not be buying a plane ticket to California.
I am one of the founders of a California company that currently has 23 employees. We plan to move to another state in about 2 years. It’s just going to get worse.
I lived here in 1977 during the second OPEC oil embargo, and clearly remember Governor Moonbeam (Jerry Brown) say that California had nothing to fear about an oil embargo because California has a thriving walnut industry and we can just burn walnut shells instead of oil. He is Governor again and still hasn’t learned grade school arithmetic.
@jim G
To those with the willingness and wisdom to move their business, Wyoming offers no state or city income taxes, low property taxes and a better work ethic. You must, however, pass a short test regarding your willingness to leave California ideas behind.
SHUT UP!!!!!! We don’t want anymore Californians, they are trying to screw up our great state with their liberal “I know better than you” attitudes. They can move to Colorado, the people there are just as stupid as the ones in California, and since Coloradans look down on us Wyomingites, we won’t get any of them up here.
Charles Higley says: “Once we watch California immolate itself over a false crisis and they have to sell the state to get out of their economic disaster, I’ ll glad to take land there for dirt cheap.”
China will have first dibs after Obowma does a partial bailout of Calif.
And graft is sure to follow, if the Chinese bond holders don’t foreclose first. That may not be a bad thing as they have a very efficient way of dealing with non-sanctioned graft in China.
Hotel California. You can check out, but you can never leave. http://www.youtube.com/watch?v=1ygI3BZxdCY