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Bankers’ Chief – Carbon Price Is “Essentially Creating A New Market”

16 Jul

From news.com.au (emphasis added) –

Revealed: The real winners of Gillard’s carbon price plan

Big banks, accountants and lawyers are among the big winners to cash in on the carbon plan, as companies wrestle with reporting requirements arising from the tax.

Banks will be involved in trading carbon permits when emissions trading starts in 2015, and will develop new products to help polluters reduce their carbon exposure.

Australian Bankers’ Association chief executive Steven Munchenberg said the Government’s carbon price was “essentially creating a new market“.

“We would therefore expect to see a range of instruments developed to help companies manage their carbon exposure,” he said.


There you have it.

Straight from the Australian Bankers parasites’ mouthpiece.

The grand Scheme scam to “price carbon” is “essentially” – meaning “in essence” – the creation of a new market.

A bankers’ paradise.

The key thing that bankers’ want – an underlying “market” of carbon permits, on top of which they can then create a whole new carbon “securities” (ie, “derivatives”) casino – is actually built into the Government’s Scheme scam from Day 1 –

Table 6 Compliance

Carbon permits

The domestic unit for compliance with the carbon pricing mechanism will be the ‘carbon permit’.

Each carbon permit will correspond to one tonne of greenhouse gas emissions.

The creation of equitable interests in carbon permits will be permitted, as will taking security over them.


The carbon permits can be used as the basis for bankers to create other, new financial “securities”.

Carbon derivatives, in other words. Derivatives (or “securities”) are the toxic financial “products” that were at the heart of the GFC.

It’s worth noting that the above article is wrong in one very important detail.

Like all mainstream media, this story incorrectly reports that –

Banks will be involved in trading carbon permits when emissions trading starts in 2015

Au contraire!

As I detailed in “Our Bankers’ Casino Royale – ‘Carbon Permits’ Really Means ‘A Licence To Print'”, banks will be able to benefit from fees and commissions from trading in carbon permits, right from the beginning. Even during the so-called “fixed price period”.

How’s that?

Because … it is only “purchased permits” that are not tradeable in the first 3 years.

Freely allocated permits“, on the other hand, are tradable.

As with the now-notorious European ETS scheme, many of our so-called “500 biggest polluters” – 201 of whom may not even exist – will receive lots of “free permits”.  To “assist” and/or “protect” our “trade-exposed” industries, you see.

And those “freely allocated” permits are tradable:

Scheme architecture

Table 1: Starting price and fixed price period

Permits freely allocated may be either surrendered or traded until the true-up date for the compliance year in which they were issued. They cannot be banked for use in a future compliance year.

What’s more, Brown-Gillard’s grand design also allows “polluters” to sell their “freely allocated” permits back to the Government.

That’s right.

Lucky “polluters” will get lots of free permits, which they can either “surrender” back again to “pay” for their “excess” emissions – which they report themselves(!). Or, trade their free permits (for profit). Or, sell their free permits back to the Government … who will use your money to buy those free permits back again:

Buy‑back of freely allocated permits

The holders of freely allocated permits will be able to sell them to the Government from 1 September of the compliance year in which they were issued until 1 February of the following compliance year.

Moreover, the Government is not only “essentially creating a new market” for banks to profit from fees on the simple trade in the carbon permits themselves.

And create their new galactic-scale carbon “derivatives” market, leveraged on top of the simple trade in permits.

The news gets even better for the bankers.

Because the Government’s scheme scam will also set up an “advance auction” system, during the so-called “fixed price period”, where carbon permits valid for the later “flexible price” system can be purchased in advance.

Which is essentially nothing less than a Futures trading system for the bankers and speculators to exploit:

Auctions of permits

The Government will advance auction future vintage permits. There will be advance auctions of flexible price permits in the fixed price period.

It’s easy to see why the banksters’ are pleased right now.

The Government’s scheme allows them to:

1. Begin creating and trading in carbon “securities” (ie, derivatives of carbon permits) from Day 1.

2. Earn fees and commissions from trade in “freely allocated” permits during the “fixed price” period.

3. Earn fees and commissions from Futures trading in the “advance auctions” of “flexible price” permits during the “fixed price” period.

4. Create other derivatives products on top of the Futures trade in advance auctions of permits.

And all this before the all-singing, all-dancing “free market” scheme kicks in three years later.

Any suggestion that this is somehow not a mechanism designed to allow banksters’ to begin creating the Australian arm of their new global derivatives monster – the true goal of the push for global “emissions trading” – is simply a blatant lie.

There is nothing in the Government’s scheme that prevents the banksters from doing everything they have wanted, from the moment the scheme begins.

In fact, as anyone can easily see from a careful reading of the Government’s own documentation, it is perfectly clear that the scheme is purposefully designed to grant the banksters’ free reign. All hidden behind the curtain of the misleading and deceptive name of “tax” or “fixed price ETS”.

Prior to the announcement of the Government’s “carbon pricing mechanism”, I argued extensively – including with Opposition Climate Action spokesman Greg Hunt MP – that the scheme is simply “the bankers’ CPRS by another name”.

Now that the scheme details have been announced, almost every passing day reveals new confirmations that I was right.

The strongest argument for my position comes from the Government’s own official documents.

But it is certainly nice to see the head of the Australian Bankers Association come out within days, and tacitly confirm the truth as well.

I rest my case?

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