[Sustain] CO2 Cap & Trade?

[Richard A. Knee]

Any time you get legislation that Democrats, Republicans and the likes of  
PG&E crow about, that should immediately raise red flags. And one of the  
problems with AB 32 is that the bill itself doesn't really accomplish  
anything. The real deal will be the implementing regulations, and it's in  
the development thereof that vigilance is critical.

Rick


On Sat, 14 Jul 2007 09:18:06 -0700, Eric Brooks <brookse32 at aim.com> wrote:

> Well, the idea is that you put a top limit or 'cap' on how much each
> county/state/corporations can emit. Concurrently with that, you create a
> market for trading reductions in CO2 emissions such that corporations
> get 'credits' (which are worth real money) and sometimes (but not
> always) corporations receive financial penalties or taxes for exceeding
> limits. The idea is that you make reducing CO2 emissions desirable by
> making it valuable.
>
> Then, you set up a market in which the CO2 credits get turned into
> electronic trading notes (a lot like stocks). So, one company, say, a
> carpet maker, figures out ways to greatly reduce it emissions, and its
> trading exchange issues that company a given amount of credits for free.
> Then, another company, say, a cement manufacturer, knowing that it is
> going to exceed its limits, buys the credits created by the carpet
> company so that, on paper, the cement company has bought enough credits
> to -not- exceed its limits; and so, it can therefore avoid emissions
> penalties (if there are any) or the cost of installing pollution
> controls (if their state requires any). Depending on the current or
> future cost of pollution control requirements, and taxes and penalties
> on fuel use or CO2 production, some companies may see the credits as
> even more valuable and pay more for them than their set value, and this
> makes the credits rise in value on the trading 'floor'.
>
> Now, as we all know, from any quick glance at the stock market, and
> especially at markets trading currency values, speculators over the last
> many decades have developed incredibly clever and complex ways of making
> money from trading even though they aren't creating any value or
> production whatsoever. Add this to the fact that corporations have high
> incentives to use tricks to pretend on paper that they are reducing
> their emissions when they are not, that corporations will continue to
> get laws passed to reduce pollution controls and penalties and even to
> change the way CO2 trading systems work, and it is easy to see that such
> cap and trade systems are doomed to failure.
>
> Indeed, the cap and trade system adopted a few years ago in Europe is
> already failing dismally. See
> http://www.heartland.org/Article.cfm?artId=21202
>
> cheers
>
> Eric
>
> Anne Garrison wrote:
>
> I can't even figure out how this cap and trade business is supposed to
> work.  Somebody told me that carbon offsetting
> meant something fairly simple like paying to plant a tree in exchange
> for some sort of excess energy use, but I can't even tell how
> this is supposed to work.  If I'm around and anyone can enlighten me at
> the next meeting, I'd appreciate it.  I know it's crap, and don't
> much feel like sorting it out, but feel like I should.
>
>
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