Carbon Trading Revisited

The case against carbon trading—but is it a fair assessment?

It seems the debate over carbon trading just won’t stay out of the headlines at the moment. The opposition party in Australia—in their usual blatant political opportunism—have decided this week to unveil an alternative climate change policy to carbon trading. However, in spite of calling carbon trading “a great big fat tax”, they have yet to specify how their own policy will be funded—and even worse, it will basically mean business as usual for big polluters anyway. So it’s basically a climate change policy for those who don’t believe in climate change, and for those who think profits for big business should always take precedence over everything else. They want to appear as though they are doing something without actually doing anything useful, while incurring costs to the consumer and pretending it won’t cost them anything. This is hardly surprising, given their present leadership.

It appears as though the vast majority of people who oppose carbon trading also oppose action on climate change, period. But as I explained in my previous Let’s Give the Planet the Benefit of the Doubt post, this is both a logically and morally indefensible position. Once again, even if you don’t think the evidence proves that human induced climate change is real, that does NOT disprove it either—if you deny the possibility of climate change, you are simply sticking your head in the sand. And in any case, we need to move to renewable energy resources anyway, as our fossil fuel reserves will eventually run out (very soon in the case of oil), and we do know for a fact that they pollute the environment (even if you don’t think this leads to climate change). Anyone who opposes moving to renewable energy resources is just selfishly looking after their own hip-pocket, pure and simple.

Still, there are some who very strongly support action on climate change, but nevertheless oppose carbon trading as the way to do it. A good example is the video above by Annie Leonard, creator of the famous Story Of Stuff video. She clearly raises a lot of issues that require serious consideration, but as with most criticism of carbon trading, the problem isn’t really carbon trading itself, but how it is implemented. With the right systems and controls, it could in theory still work very well, and could provide a way for the third world to profit directly from our efforts to reduce carbon emissions. Annie thinks we should give some of the proceeds of direct taxes on carbon emissions to the third world, but let’s face it—taxes very seldom go directly to the places they are supposed to. And besides, it really does seem as though aid has done little if anything to help the third world, and may even have harmed them. The people of the third world need a way to make a living for themselves to get out of poverty, and properly implemented carbon trading provides a great opportunity for them to do that.

I also wonder if this video really is a fair assessment of the subject. For one thing, her implication that Enron and Goldman Sachs executives will control the carbon global trading market is seriously misleading. It leads me to wonder if any of the other statements in the video could be misleading as well—if you are knowledgeable on the facts and figures of this subject, I would greatly appreciate it if you could clarify some of the issues it raises. I do absolutely agree with her on one thing though: the current government subsidies of fossil fuels are beyond absurd, and could go a very long way toward covering the costs of our (undoubtedly essential) move toward renewable energy resources.

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I really believe something must be done, especially since fossil fuels are hindering our technological development in some areas. gasoline engines are an old technology, and I think moving away from them will only provide great benefits for our health and quality of life.


Something — some sort of result — already did come out of Copenhagen on this… we have yet to interpret fully what Humankind and Nature have developed through the apparent failure of some great nations to agree on certain things. It seems that “Copenhagen I” somehow has bidden to become the first of many possible “planetary climate workshops” wherein representatives of the nations form a delberately nebulous sort of think tank that seems to demand the very fuzziest, yet most extravagant and all-encompassing, kind of logic. A requirement to study and work hard and smart, as never before, now waits immediately ahead of humankind — the sleazy profiteers are poised to take big profits once again, as the greater living world suffers, to the degree that the greater mass of living entites would try to avoid this challenge. (That’s my guess, folks!) It seems that, in doting upon the earth’s continued capacity to nourish and shelter, we need to ratify Copenhagen in some way in public and in private, such that we can return to the drawing board peacefully. I really hope we all don’t give up and shrug it off, at this late hour, as though something merely were again rotten in Denmark.


Hi Sachiko~

Thanks for the Annie Leonard vid; always nice to see her take on things. I’ve been a sick puppy the last few days so I’ll respond more thoroughly when I feel better, but I wanted to share this news from the States on a new proposal offered by Washington State senator Maria Cantwell which she calls “cap and dividend”.

A couple of excerpts from the above mentioned Economist link:

“Under her bill, the government would impose a ceiling on carbon emissions each year. Producers and importers of fossil fuels will have to buy permits. The permits would be auctioned, raising vast sums of money. Most of that money would be divided evenly among all Americans. The bill would raise energy prices, of course, and therefore the price of everything that requires energy to make or distribute. But a family of four would receive perhaps $1000 a year, which would more than make up for it, reckons Ms Cantwell. Cap-and-dividend would set a price on carbon, thus giving Americans a powerful incentive to burn less dirty fuel. It would also raise the rewards for investing in clean energy. And it would leave all but the richest 20% of Americans—who use the most energy—materially better off, she says.

Ms Cantwell’s bill is refreshingly simple. At a mere 40 pages, it is one-thirty-sixth as long as the monstrous House bill (known as “Waxman-Markey”, after its sponsors), which would regulate everything from televisions to “bottle-type water dispensers” and is completely incomprehensible to a layman. Instead of auctioning permits to emit, Waxman-Markey gives 85% of them away, at least at first. This is staggeringly inefficient: permits would go to those with political clout rather than those who value them most. No one is proud of this—Mr Obama wanted a 100% auction—but House Democrats decided that the only way to pass the bill was to hand out billions of dollars of goodies to groups that might otherwise oppose it. (There was plenty of pork left over for its supporters, too.)

Of all the bills that would put a price on carbon, cap-and-dividend seems the most promising. (A carbon tax would be best of all, but has no chance of passing.)”

I wanted to throw it out there for the general discussion. I think most of us agree that a price needs to be put on carbon emissions generation but the devil is in the details so which plan can 1) have a positive effect and lower carbon emissions and 2) has a chance passage and becoming law.

Another point that needs to be made is that a country can’t tax its own carbon emitters while giving a free pass to good imported from other countries that bypass that same tax. It would penalize manufacturing in your own country while essentially subsidizing emissions from others.


Originally Posted By Swamp Rat
Instead of auctioning permits to emit, Waxman-Markey gives 85% of them away, at least at first. This is staggeringly inefficient: permits would go to those with political clout rather than those who value them most. No one is proud of this – Mr Obama wanted a 100% auction – but House Democrats decided that the only way to pass the bill was to hand out billions of dollars of goodies to groups that might otherwise oppose it. (There was plenty of pork left over for its supporters, too.)

Herein lies the heart of the problem. I think there is genuine will from Obama and Australia’s present government to solve this problem, but there are a lot of conservative political forces and business interests that have to be satisfied simply in order to get any bill passed. At this stage, I have to say that I’m very pessimistic that we’ll be able to do enough – and soon enough – to solve this problem.

Still, “cap and dividend” does sound like a very good idea. Make sure you get well soon Swamp Rat! :-)