Real world 'Cap and Trade'

[Pat]

http://online.wsj.com/article/SB10001424052748704398304574598173402205330.html

The world's carboncrats are beavering away this week on a vast new global cap-and-trade scheme that President Obama wants the U.S. to join. But before we do, maybe Americans should understand how this already works in practice. Union workers, take note.

The Kyoto Protocol of 1997 required signatories to reduce their carbon emissions, and the European Union in 2005 launched its own cap-and-trade system. The program sets a limit on carbon emissions, and companies are issued free carbon allowances that they can buy or sell based on their emissions needs.

Fast forward to this month's news that Corus, Europe's second-largest steel producer, is shuttering a giant U.K. steelmaking plant at Redcar, cutting 1,700 jobs. Corus blames the recession that has cut steel demand and says the British government hasn't done enough to help it.

Whatever the truth of that, there's little doubt that cap and trade made the closure much easier. The decline in steel production means European steelmakers have surplus carbon allowances. According to Carbon Market Data, a European research firm, in 2008 Corus had the second largest surplus of EU carbon allowances—7.5 million.

The EU is looking for ways to drive today's depressed allowance price of about $21 apiece back up to former highs of about $50, so Corus has the potential for a $375 million windfall. By closing Redcar's annual capacity of three million tons of steel, Corus will produce six million fewer tons of CO2. That means more carbon allowances, which could translate into about $300 million a year if credits hit $50. Corus is essentially being paid to lay off British workers.

Corus will also profit if it moves the production to India. As part of Kyoto, the United Nations created the Clean Development Mechanism to encourage Western companies to invest in developing-world factories. Participants are financially rewarded based on the amount of carbon they "save" with more efficient plants.

Corus was bought in 2007 by Tata, India's largest steel company. The Indian steel industry is set to more than double production to some 124 million tons a year by 2011-2012. Were Corus to move production to a "clean" Indian factory, it could receive hundreds of millions of dollars annually from the Clean Development Fund. The kicker is that none of this results in fewer carbon emissions. A Corus plant in India might be more efficient by Indian standards, but it will be no more efficient than Redcar.

We should add that all of this is precisely what Kyoto envisioned. The idea is to tax Western industry and then send the proceeds to developing countries as an incentive to join the anticarbon crusade. But unless governments close their borders to foreign investment, business will flow to where the carbon tariff is least punishing. China and India understand this, which is why they won't agree at Copenhagen to anything that reduces this advantage.

The Corus story also shows that cap and trade isn't really a free market. Markets develop to efficiently allocate resources and capital. Carbon cap and trade is a government-rigged market, in which carbon allowances are dispensed based on political influence. Such a system is ripe for manipulation, and Corus is merely the latest example.

To summarize: Cap and trade is a scheme that would impose heavy carbon taxes and allowances on U.S. industries, which would then have an incentive to move overseas themselves, or to sell those allowances to overseas companies that could use them to become more competitive against U.S. companies. Like the 1,700 Brits at Redcar, American workers would be the big losers.

It's all about transfer of wealth, if you don't believe me, then read the text of Hugo Chavez's speech given in Copenhagen on Dec 18th 2009.
http://climateandcapitalism.com/?p=1414

[Pat]

Well looky here, http://www.telegraph.co.uk/news/6847227/Questions-over-business-deals-of-UN-climate-change-guru-Dr-Rajendra-Pachauri.html
It seems that Dr Rajendra Pachauri the head of the UN's climate change panel is heavily invested in companies that stand to make billions in the cap-and-trade scam.
How come the US MSM isn't reporting this?

[Lou_Dobbs]

It's an amazing system. If I had a business and lots of money I would love to start playing around in the cap and trade game.

[foxbaron]

HEY, I've got carbon credits to sell. Anybody want to buy some?

[Independent Harry]

So wait, I don't get it...lol, the steel mill closed citing the economy and the author then says there's little doubt cap and trade had to do with it...

Where's the proof other than the author says it's so, so we shoudl believe him...

[Pat]

So wait, I don't get it...lol, the steel mill closed citing the economy and the author then says there's little doubt cap and trade had to do with it...

Where's the proof other than the author says it's so, so we shoudl believe him...
Wow, all the dots were connected for you and you still can't see the big dipper.
http://my.execpc.com/60/B3/culp/astronomy/fig/BigDipper.gif

[Independent Harry]

Wow, all the dots were connected for you and you still can't see the big dipper.
http://my.execpc.com/60/B3/culp/astronomy/fig/BigDipper.gif

Please point out the dots, there were none. He said that the company laid off the employees to increase their cap and trade revenue...please point out the evidence that, that was the reason and not the economy.

The dots are easily connected if you want to believe somethisn really really bad. I require proof and logic and fact myself.

[Pat]

Please point out the dots, there were none. He said that the company laid off the employees to increase their cap and trade revenue...please point out the evidence that, that was the reason and not the economy.

The dots are easily connected if you want to believe somethisn really really bad. I require proof and logic and fact myself.
If a professional journalist (such as somebody that works for an esteemed paper like the WSJ) can't make it clear enough for you, I doubt I can penetrate your closed mind.

[Moby]

If a professional journalist (such as somebody that works for an esteemed paper like the WSJ) can't make it clear enough for you, I doubt I can penetrate your closed mind.
Remember that the journalist's name isn't posted in the article and the news paper is run by the same man that pays the misinformer of the year.

If you can't explain it yourself than you shouldn't be citing Rupert Murdoch.

[Moby]

Nucor in South Carolina has been having issues for years as the economy has taken a downturn and cap and trade is not in effect here in the USA. What do we blame their downturn on?

In fact the Steel Industry took a major hit in previous decades as cheaper metals were being produced in Asia. Then they had a few bust years as the dollar kept dropping value but once it leveled they had the same issue and had to start laying off people again.

There's no doubt that cap and trade may cost some industries jobs but the steel industry is a beast that has had its major ups and downs long before cap and trade and there's not much evidence that the downturn in America's steel industry or the mentioned plant above had anything to do with cap and trade. In fact, we know that cap and trade has had nothing to do with huge steel towns closing down in America.

However, this is part of our economic history and I don't get the impression that you've been paying attention.

[John Galt]

She's only here to make trouble...remember?

I don't know if the steel mill was a union shop. The article's first paragraph directs unions to 'take note'...

In this country, I'm sure unions would have nothing to do w/plant closings. It will only be cap and trade that sends jobs overseas.

The point that those 'dot connectors' refuse to accept, it that the idea is to make alternative sources of energy cost effective.

But no...it might affect their investments.

[Pat]

She's only here to make trouble...remember?

I don't know if the steel mill was a union shop. The article's first paragraph directs unions to 'take note'...

In this country, I'm sure unions would have nothing to do w/plant closings. It will only be cap and trade that sends jobs overseas.

The point that those 'dot connectors' refuse to accept, it that the idea is to make alternative sources of energy cost effective.

But no...it might affect their investments.
Hey, isn't that what the article said?

[Pat]

Remember that the journalist's name isn't posted in the article and the news paper is run by the same man that pays the misinformer of the year.

If you can't explain it yourself than you shouldn't be citing Rupert Murdoch.
I said I probably couldn't explain it well enough to penetrate his closed mind.
That's different.

[Moby]

I said I probably couldn't explain it well enough to penetrate his closed mind.
That's different.
Well then just explain it and see if it can penetrate his mind.

[Pat]

Well then just explain it and see if it can penetrate his mind.
That request has already been denied once.

I posted an article, if Harry can prove the information in the article is wrong, let him have at it.
Or he can just act like you and dismiss it based upon the owner of the paper, rather than look at the actual content of the article.

[doctordog]

That request has already been denied once.

I posted an article, if Harry can prove the information in the article is wrong, let him have at it.
Or he can just act like you and dismiss it based upon the owner of the paper, rather than look at the actual content of the article.

Perfect! it will always be about the messenger with the liberals, never about the message.

[Moby]

Perfect! it will always be about the messenger with the liberals, never about the message.
Where in the message is there any evidence that this was caused by cap and trade and not the downturn in the economy?

[Moby]

That request has already been denied once.

I posted an article, if Harry can prove the information in the article is wrong, let him have at it.
So we're back to that now. Post some one's opinion and automatically assume that it's correct with any evidence to support it.

Isn't that being a sheep?

We work a little differently around here and that's why so many Neocons hate this place. You article is nothing more than opinion and you should be smart enough to know who's paying for those opinions.

[Pat]

Nucor in South Carolina has been having issues for years as the economy has taken a downturn and cap and trade is not in effect here in the USA. What do we blame their downturn on?

In fact the Steel Industry took a major hit in previous decades as cheaper metals were being produced in Asia. Then they had a few bust years as the dollar kept dropping value but once it leveled they had the same issue and had to start laying off people again.

There's no doubt that cap and trade may cost some industries jobs but the steel industry is a beast that has had its major ups and downs long before cap and trade and there's not much evidence that the downturn in America's steel industry or the mentioned plant above had anything to do with cap and trade. In fact, we know that cap and trade has had nothing to do with huge steel towns closing down in America.

However, this is part of our economic history and I don't get the impression that you've been paying attention.
However, as soon as a company has the added incentive of selling carbon credits for profit, the motivation becomes that much stronger.

[Pat]

So we're back to that now. Post some one's opinion and automatically assume that it's correct with any evidence to support it.

Isn't that being a sheep?

We work a little differently around here and that's why so many Neocons hate this place. You article is nothing more than opinion and you should be smart enough to know who's paying for those opinions.
It sure has a lot of facts buried inside it, doesn't it?

[Moby]

It sure has a lot of facts buried inside it, doesn't it?
Yes it does.

It mentions that the Corus blames the recession.

It mentions the decline in the steel industry.

It also uses the words "might" and "could" when stating things that the author can't confirm are happening.

You have to be careful when you're not able to explain something yourself and just posting the opinions of people paid to convince you.

[doctordog]

However, as soon as a company has the added incentive of selling carbon credits for profit, the motivation becomes that much stronger.

Anyone burning coal or fuel oil is already looking at what plants they will close, what competitors they can buy and close, or where they will cut production so low they might as well close it. There is a cost for going green and it is jobs lost when plants become to expensive to justify operation.

[Pat]

Yes it does.

It mentions that the Corus blames the recession.

It mentions the decline in the steel industry.

It also uses the words "might" and "could" when stating things that the author can't confirm are happening.

You have to be careful when you're not able to explain something yourself and just posting the opinions of people paid to convince you.
And Japan selling cars that Americans would buy used to be considered "might" and "could". People like you were in charge of Chrysler and GM.

[John Galt]

Anyone burning coal or fuel oil is already looking at what plants they will close, what competitors they can buy and close, or where they will cut production so low they might as well close it. There is a cost for going green and it is jobs lost when plants become to expensive to justify operation.
Or, they could take some of the tens of millions that the upper level management skims off the top, and invest it in alternative methods.

That's why C/T is looming....nobody will change the status quo willingly.

It isn't good in the short term, but we should've been looking at these alternatives decades ago.


Profit, Profit, Profit.

[doctordog]

Or, they could take some of the tens of millions that the upper level management skims off the top, and invest it in alternative methods.

That's why C/T is looming....nobody will change the status quo willingly.

It isn't good in the short term, but we should've been looking at these alternatives decades ago.


Profit, Profit, Profit.

Profit feed our children, educates them, provides a decent life for all of us. If you are against profit, you might as well be dead. BTW-Profit supports that plane your friend likes to fly.

[John Galt]

Profit feed our children, educates them, provides a decent life for all of us. If you are against profit, you might as well be dead. BTW-Profit supports that plane your friend likes to fly.
Profits are indeed what feeds us all.

It doesn't negate the fact that pollution makes for higher profits. If these industries took small amounts of those profits years ago, we wouldn't have these problems now. Just because your stacks' filth doesn't stay in your region, doesn't mean that your profits aren't killing people elsewhere.

The back room deals to keep the status quo, have kept us using fossil fuels for decades. We are now at the mercy of those who sit atop the oil. We are poisening ourselves with the emissions/waste product from coal.

Nothing seems to change in this country without the use of force. The switch to unleaded gas was expensive, but necessary. Anti pollution technology on vehicles was expensive, but necessary.


Had we taken the small steps decades ago, our investments would've been reaping huge rewards now.

Capitalism is a filthy animal. Although the C/T discussion seem to hinge on carbon emissions, there are wider reaching reasons for the necessary changes.