Friday, February 15, 2013

55 Social Justice and Environmental Organizations Call for the End of Europe's Carbon Trading Scheme

As the European Commission has funded dozens of eco-NGO's to lobby the EC (I'm not kidding) to the tune of of millions of Euros, this draft letter is more than likely a trial balloon for an already agreed policy shift by the EU.
I imagine we'll be hearing about a coordinated and harmonized carbon tax administered by the U.N. over the next couple years to take the place of the ETS.

While I can't think of any stand-alone carbon traders to short I'm sure we'll come up with a way to make money off this change in policy should it occur. More to follow.

From Climate and Capitalism:

Carbon trading has failed: scrap the ETS now
Europe’s experience shows that emissions trading is a disaster: it doesn’t reduce greenhouse gases, subsidizes the worst polluters, and locks in the fossil fuel economy. 

The following draft statement, released for discussion last week and scheduled for official release on February 18, has already been signed by 55 social justice and environmental organizations.  See Time to Scrap the ETS for a current list of the signatories, and its text in seven languages.

After seven years of failure, the European Union’s claims that it can ‘fix’ its collapsing Emissions Trading Scheme (ETS) no longer have any credibility. We believe that the ETS must be abolished no later than 2020 to make room for climate measures that work.

The EU ETS, the EU’s flagship policy to address climate change, was introduced in 2005 and gave rise to the currently largest carbon market worldwide. The ETS includes ‘cap and trade’ and ‘offsets’ systems which allow participants to buy and sell emissions permits and offset credits in order to comply with their reduction targets or simply to make a profit on the market.

The idea is to reduce industrial greenhouse gas emissions cost-effectively by creating incentives for climate-friendly innovations and so move industry onto a low-carbon path.

But the scheme has failed to do so. The EU’s fixation on ‘price’ as a driver for change not only has locked in an economic system dependent on polluting extractive industries – with fossil fuel emissions increasing sharply in 2010 and 2011.

The failure is also set to spread more widely insofar as the ETS is used as a template for other carbon markets proposed for countries such as Brazil and Australia and as a model for other ‘ecosystem service’ markets in biodiversity, water and soils....MORE
Here's the list of the signatories