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Carbon Trading - The ETS

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A solution?  Or another problem and a rort?

Dangers of an Emissions Trading Scheme:

  1. Speculators pushing up prices, as in oil, above the true value
  2. The speculating being worth more than the initial reason that Carbon Credit trading was established
  3. The initial reason for the concept of the Emissions Trading Scheme

There is potential value in the concept of carbon credits and an emissions trading scheme.  However, there is an enormous danger in it also, and it is nothing to do with the carbon dioxide.  It is all to do with carbon dioxide, and therefore pollution, becoming a commodity, rather than the ETS being a solution to a pollution problem.

The price of oil in 2008 rose by 200% in a short period of time.  It was not through demand factors, nor supply factors, nor production costs.  It was been driven up by speculators trading the futures market for the barrels of oil as a trading commodity.

The problem with this is that the new “industry” of speculation on carbon credit trading through the ETS could eventually surpass the value of the carbon credits to the reduction of pollution.  Unless this is regulated early in the developmental stages, the value of this concept could be eroded before it begins to have the desired effect.

Is carbon dioxide really the problem?

There is some doubt as to the value of carbon dioxide in the big picture of global warming.  Whilst there is no doubt about industrial emissions  being pollutants, there is a question about their level of contribution to the global warming (or cooling) situation.  Global warming has been in a very slight reversal for around the last decade according to the latest research, yet carbon dioxide levels in the atmosphere have increased.  There are a few possible reasons, including:

  1. The damage was done long ago, and the global warming/cooling phenomenon has developed a sustained momentum that no longer needs carbon dioxide to maintain the degenerative processes begun, such as ocean currents changing, undermining ice shelves with warm currents causing them to collapse, weather patterns changing, rainfall patterns shifting from one side of a continent to another, etc.
  2. Carbon Dioxide was only the catalyst or not even involved in the process of climate change and other chemistry, perhaps yet unknown, is the real culprit.
  3. Carbon dioxide has little or nothing to do with the climate change process.

It would seem questionable to make a blanket statement that carbon dioxide is THE culprit.  There is no doubt that pollution is a major global problem, and that it is an issue that needs urgent attention, but it may have little or nothing to do with global warming or cooling.

Similarly, methane gases from domestic livestock have been blamed for much of the problem of the changing gas content of the atmosphere.  However, domestic animal numbers and exhaled gas has increased enormously, yet the global methane levels have not continued to rise in recent years.  We know that changing and improving stockfeed can eliminate methane as an exhaled gas from cattle.  Regardless of the level of methane gas in the atmosphere, the global temperatures have slightly decreased in the last decade, thus de-linking methane and global warming too.

This information is readily available through scientific and climate and pollution research agencies all over the world.  That being the case, there is a deeper question of why the push for an ETS would continue if this information was known, or even if the doubt about the carbon dioxide connection was established.  A possible series of reasons emerges:

  1. The government is continuing with a policy line that was established before realising there was a doubt about the connection of carbon dioxide to global warming, and feels obliged to continue by the opposition and public pressure
  2. The government is being pressured to continue with this policy because of the other interested parties that would profit from the ETS scheme and its abuse with manipulation of the carbon market for their own profits
  3. The government is being pressured by “green” parties or independents in return for other support
  4. Government political advisors or think tanks are advising the government to continue regardless of advice from experts, for their own reasons
  5. The government doesn’t have the political will to admit that we were wrong, fooled or poorly advised initially, for fear of being ridiculed by the opposition or other opponents.
  6. The government doesn’t believe the experts
  7. The true experts aren’t exerting enough pressure on the governments

However, even if the ETS had value in solving the problem of carbon dioxide as a contributor to the global warming/cooling problem (if that were true), there still remains the problem of abuse of the trading scheme, just as futures trading and speculation drove the oil prices higher than should reasonably be expected.

The issue with this is that the trading becomes more valuable to the speculators than the scheme is to the problem.  With the value of the carbon credits blown out of proportion to the cost of the carbon in the system, the average carbon source client, business or individual is hit very hard for little apparent value.  This could result in such staple services as domestic electricity prices skyrocketing, greatly disadvantaging those people who least can afford it, just as happens with fuel prices at the service stations where the petrol and diesel prices hit the end user hardest.  Every carbon producer will be billed for their production of carbon and that could mean a total end to the viability of the Australian Food and Fibre Producing Farm!  All food and primary produce required to put food on Australian tables may need to be imported!

Safeguards that could prevent speculation need to be explored IF this ETS route is taken.  This could be an allocated value for carbon production, a carbon credit only valuable as currency between polluting and non-polluting businesses, so that the only value was as a method of trading carbon credits from businesses that have reached their current world’s best standard of emission control and still need to offset carbon production.

What can you do?

  1. Research and learn all you can about global warming AND COOLING
  2. Find out what the ETS proposals are and what their long-term consequences could be.
  3. Lobby government with your research findings and demand they acknowledge the truth.
  4. Demand that an ETS scheme recognising the truth about carbon dioxide, global warming and cooling be designed, IF it proved necessary.
  5. Demand safeguards to stop plundering by speculators, such as allocated carbon values that would prevent speculation, and limit trading to offsetting the values to polluters and non-polluters, rather than open market speculation, or other such restrictions on open trading and speculation.
  6. Follow-through with other pollution fighting initiatives and lobby everyone with authority and relevance with them, to take the pressure off the carbon front and further reduce the need for an ETS.
  7. Promote research initiatives to unlock the truth behind the cause of global warming and cooling.

There is another issue to consider here, within the same discussion topic, relating to POINT 7.  If Carbon Dioxide is proven to be unrelated to the Global Warming or Cooling process, and if there IS a culprit in the system, WHAT IS IT?

IF we had an ETS put into place and it was proven to be bad policy, who takes responsibility for the financial damage caused to the thousands of small businesses and farms bankrupted, and the millions of people overcharged unnecessarily for electrical power?

What if we focused our attention on just cleaning up the incredible pollution messes that we, as a species, have created on the planet, I wonder how many of these other climatic and environmental problems would resolve themselves anyway?  If we invested the money that will go into an ETS scheme, into pollution control and environmental reclaiming, would we achieve a greater return on investment?  Would that investment provide a genuine financial return, whereas the ETS scheme as proposed is likely to just increase costs to the end user and provide yet another commodity for speculators to trade?

This is too big to let slide; it is our planet, and also our economy – we can’t afford to lose either, or both!

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