A Disturbance In The Farce

9 Jul

Hooray!

Thanks to the Green-Labor-Independent Alliance, our little battler nation from Down Under is going to save the planet.

Or is it?

Perhaps not.

Not when even the Green-Left Weekly is aware of the disturbance in the farce:

Europe’s biggest polluters have made billions out of the European Emissions Trading System (ETS). But a new briefing by Carbon Trade Watch (CTW) says the scheme will ensure industry will not have to cut its emissions until at least 2017.

The first phase of the ETS ran from 2005 to 2007. It made no dent in emissions. But power companies made about 19 billion euros by charging customers for the “cost” of permits they were given for free.

Manufacturers made about 14 billion euros in windfall profits with the same trick.

The European Commission said the scheme’s problems would be ironed out in the second phase, from 2008 to 2012. It claimed the ETS was working when emissions from the 11,000 polluters covered by the scheme fell by 5% in 2008 and 11.6% in 2009.

But CTW points out the emissions fall was due to the impact of the global recession, which caused a fall of 13.85% in industrial and electricity production in 2009.

In 2010, as the economic crisis eased, emissions shot up again by 3.5%.

The polluters stand to make more money for doing nothing in the ETS’s second phase. By 2012, power companies will make between 23 billion and 71 billion euros from passing on the cost of their free permits.

The third phase of the ETS, which will run from 2013 to 2020, won’t solve the problems. Companies will still be able to use the excess permits given out in the second phase. The World Bank has estimated about 970 million permits will be available.

This means polluters won’t have to cut their own emissions until 2017 — they can just cash in their free permits instead.

“Put simply,” said the briefing, “the third phase of the ETS will continue the same basic pattern of subsidising polluters and helping them avoid meaningful action to reduce greenhouse gas emissions.”

“It is a fundamentally flawed system, setting up a system of property rights for continued pollution, and transposing environmental objectives into the kind of cost-benefit trade-offs that led to the problem in the first place.”

The farce is strong with this one.

Note carefully the sentence that I have underlined above –

Companies will still be able to use the excess permits given out in the second phase.

This points to the very heart of the argument made by your humble blogger, in his article on 27 June – “The Carbon Tax is Not A ‘Tax’ – It Is The Bankers’ CPRS By Another Name”.

And, to the heart of the argument made by your humble blogger, in his public stoush with Opposition Climate Action Onanist, Greg Hunt MP from June 29-30 – “Letter To Greg Hunt MP”.

Here is the key point of that argument, as directed to Mr Hunt (emphasis added):

The government’s openly professed intention, and the Garnaut Review’s consistent recommendation, is to issue carbon permits at a fixed price only for a temporary initial period, with said permits having the following key characteristics, specifically in order to “smooth the transition” to the ultimately intended fully-floating cap-and-trade scheme:

(a) Unlimited expiry date;
(b) Unlimited bankability, from Scheme commencement.

The implications of these parameters – stated previously as formal Policy Positions by Prof Garnaut and the ALP – are perfectly clear:

1. A “polluter” forced to purchase the initial “fixed price” carbon permits will be empowered to “bank” said permits, “from Scheme commencement”.

2. Due to their unlimited expiration date, the “polluters” will be enabled to trade said permits, after the temporary initial period has passed.

3. The “price” of carbon permits issued during the temporary, initial “fixed price” period, will be legislated to rise incrementally over that interim period.

Thus, it is patently obvious to any thinking person, that “polluters” forced to purchase carbon permits at (eg) the Year 1 “fixed price”, having been enabled to “bank” said permits, will be able to on-sell them after the temporary initial “fixed price” period trading restriction has passed, at the then going market rate.

Furthermore, as the price of permits will have been forced to rise by government decree during the initial period, this means that, absent a collapse in the market price upon the “floating” of the Australian carbon permit market, “polluters” will be granted opportunity to profit from the sale of carbon permits that they were forced to purchase – at lower prices – during the initial temporary period!

Indeed, those “polluters” who will be granted “free” permits will effectively be granted a free profit-making opportunity, directly arising from the nature of the proposed “initial fixed price” carbon pricing mechanism.

It’s as simple as that.

The government has been trying to con you with the idea that their scheme is “like a tax” for the first 3 years, and will then “transition” into a “market-based” Emissions Trading Scheme.

The real truth is, the scheme will be just as Trilateral Commission member Ross Garnaut has recommended, in its key details (below).

And in terms of its alleged goal of so-called “pollution abatement”, it will be just as farcical as the benchmark European CO2 “reduction” scheme. You remember – the great European system that the World’s Most Moronic Treasurer, Wayne Swan, has lauded loud and long.

The initial 3 year “fixed price” period will simply be a period in which 1,000 500 hand-picked “polluters” rent-seekers will be “forced” to buy X amount of carbon permits, at a “starting price” of $Y per tonne.

And … receive lots of free ones too.  To help “protect” our “trade-exposed” industries, you see.

These lucky “polluters” will bank some (or all) of these permits.  Doubtless in a new “independent” Carbon Bank, as recommended by Garnaut and the entire banking sector … along with those same banks’ “leading economists” (I can’t imagine why – can you?).

Each year during the 3 year “fixed price” period, the government will increase the price of that year’s permits.

At the end of the “fixed price” period, the government will “float” the scheme … Oh praise be to the gods of capitalism and “free markets” – we’re saved!

And those “polluters” will then be able to sell their “banked” permits on the open market. For a windfall profit.

A windfall profit on top of the windfall profits they’ll have already made during the previous “fixed price” period, by jacking up their prices, and using the cost of permits as their excuse for doing so.

Just like in Europe.

And the bankstering sector – the #1 drivers for global emissions trading – will make billions in fees and commissions.

Just like in Europe.

IT.

IS.

A.

SCAM.

I for one am quite looking forward to – not watching, heaven forbid – but reading the official documents from this Sunday’s grand announcement of the Green-Labor-Independent Alliance’s CO2 “pricing mechanism”.

For one reason only.

To confirm the two (2) key details.

The two key details that have been “recommended” in every Garnaut Review. In every Rudd-CPRS White/Green Paper. And in every Gillard government public policy document, as published on the climatechange.gov.au website.

(That is, until they removed all trace of the original CPRS documents from their website yesterday)

And the two key details are these.

Will the carbon permits:

(1) have an unlimited expiry date (or, an expiry date after the end of the 3 year “fixed price period”)?

(2) be bankable from the commencement of the scheme?

Dear reader, there is nothing else that you need to know about the final design of this scheme.

Nothing.

Compensation, blah blah blah … it’s all just noise to distract, and lull you into a false sense of security.

Because if the above two details are consistent with the recommended “design” from Ross Garnaut since the Rudd CPRS days, then you can rest assured of one thing.

Australia’s grand scheme to save the planet via economic planking, has exactly the same farcical, “fundamentally flawed” design as the European one.

And so, the results will be identical.

Huge profits for the few.

Raped wallets for the many.

And sweet FA impact on CO2 “emissions reduction”.

This blogger hopes that Australians will rediscover the spirit of our Eureka stockade heritage, and rise up against this scam.

For truly, if this Green-Labor-Independent Alliance is not stopped (and now, they have the numbers to do as they please), then you may rest assured that –

“The farce will be with you, always*.

* Because the Coalition can not – and I believe, will not – repeal it. See here, and here for reasons why.

UPDATE:

European’s warn of ETS perils, according to “their ABC” –

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2 Responses to “A Disturbance In The Farce”

  1. rogueoperator July 9, 2011 at 8:57 am #

    Great tweets. Great commentary. Great insight. Keep your eye on these bastages. They’re shadier than the aliens at the cantina on Mos Eisley.

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