THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume X, Issue # 304, November 15, 2008
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
SLUMPING CARBON "CAP-&-TRADE" PRICE WORRIES GREENS
By Dennis T. Avery
TROUBLE FOR ENVIRONMENTALISTS, LEFTIST POLITICIANS, & THEIR "CAP-&-TRADE" SCHEMES TO INDUCE A SHIFT FROM
COAL, NATURAL GAS, & OIL TO NON-FOSSIL ENERGY: DISCOURAGING THE LONGTERM INVESTMENTS NEEDED TO
REDUCE EMISSIONS OF CARBON DIOXIDE & OTHER GREENHOUSE GASES INTO THE EARTH'S ATMOSPHERE -- THE SLUMPING
PRICE OF CARBON IN EUROPE'S EMISSION TRADING -- TROUBLE AHEAD FOR U.S. PRESIDENT-ELECT BARACK HUSSEIN
OBAMA'S PROPOSAL TO SET UP A CAP-&-TRADE PROGRAM TO CAUSE ELECTRCITY COSTS IN THE U.S.A. TO SKYROCKET &
THEREBY TO PRICE COAL OUT OF AMERICAN POWER PLANTS -- POLITICAL PROBLEMS WITH A STRAIGHT CARBON TAX --
THE SIGNIFICANCE OF STEADILY DECLINING GLOBAL TEMPERATURES
FULL STORY:
The price of carbon has slumped in Europe’s emission trading — for the second time in two years. The longterm
investments needed to reduce humanity’s greenhouse gas emissions are being discouraged. The carbon price is meant to
offset the economic cost of shifting from coal, national gas, and oil to non-fossil energy. If the carbon price is too cheap,
however, Greens worry we won’t stop burning the fossil fuels.
That’s why U.S. President-Elect Barack Hussein Obama told the San Francisco Chronicle last January, “Under my
plan, electricity prices will skyrocket.” The Obama campaign has endorsed a U.S. carbon cap-and-trade market to price
coal out of American power plants. The drop in European Union carbon prices may be telling us that a straight carbon
tax would be more effective, but politicians fear a carbon tax would create immediate voter rebellion.
No one is quite sure why the European Union carbon price has dropped from nearly $30 per ton in July, 2008, to about
$22 recently:
It could be the credit crunch spreading globally since the U.S. had to “nationalize” Freddie Mac, Fanny Mae and their
sub-prime mortgages.
It could be the ten EU nation-states are rebelling against scheduled European emission cuts they consider too ambitious.
They fear the European economy can’t absorb such a massive, rapid shift without industries fleeing overseas — and
taking their jobs with them.
Canada is emitting far more than its promised levels of greenhouse gases, but it says it will neither slash the emissions
nor buy carbon credits to offset them. With half a dozen other countries billions of carbon-credit dollars over their Kyoto
limits, Canada could undermine the whole carbon credit trading scheme.
If too much human-emitted CO2 is the cause of global warming, however, the price of carbon emissions must be high
enough to discourage such backward steps as building massive coal-fired power plants in Britain, or brown-coal power
plants in Germany.
Carl Mortished recently warned in The Australian that the falling price of carbon would discourage clean energy
installations, drive solar and wind-power companies into bankruptcy, and cause green jobs to be lost. The cost estimates
for “clean coal” carbon capture and storage vary from $50 to $80 per ton.
Economists have long warned that Europe’s cap-and-trade” mechanism would not provide a consistently effective carbon
penalty to industries and power plants. Price volatility is already a huge problem for energy companies. The price of oil has
lately swung from $140 to $60, with the International Energy Agency forecasting $200 per barrel again by 2030. Natural gas
prices fluctuate with the movements of Russian tanks in Gruzia (Georgia) and Sarah Palin’s new gas pipeline from Alaska.
The developing countries might suddenly deliver bunches of cheaper carbon credits from retooled Indian factories and/or
Chinese reforestation projects.
The carbon price needs to be more stable than such factors.
“In only three months,” Mortised wrote recently, “life has become a lot cheaper for polluters. The financial cost of warming
the planet has plummeted in Europe’s emissions trading system and the effectiveness of such a volatile market mechanism
in curbing carbon is being questioned.”
Or the entire fossil fuel sacrifice may seem less important with declining global temperatures. Britain’s Hadley Centre and
the U.S. satellites say global temperatures have fallen at least 0.5 degree Celsius since 1998, even as CO2 levels have risen
another 5 percent. NASA’s Jason satellite predicts lower thermometer readings for the next 25 years, due to cool phase of
the Pacific Decadal Oscillation.
LINKS TO RELATED TOPICS:
Europe, European States, Politics, & Public Policy
American Politics, Political Competition, & the Control of
Public Policy: Elections, Political Parties, Political Factions,
Ideologies, & Special Interest Groups
American Government & the U.S. Presidency:
Presidential Politics, National Leadership, & Public Policy
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
The Earth's Natural History, Global Climate Changes,
& the Future of Human Life & Civilization on the Planet:
Science, Ideology, & Public Policy
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Dennis T. Avery is an environmental economist for the Hudson Institute in Washington, D.C., and is the Director of the
Institute's Center for
Global Food Issues (www.cgfi.org). Formerly he was a senior policy analyst for the United
States Department of State, where he won the National Intelligence Medal of Achievement. He is the co-author, with
atmospheric physicist Fred Singer, of the book, Unstoppable Global Warming: Every 1500 Years (Blue Ridge Summit,
Pennsylvania: Rowman & Littlefield, 2006). Avery's book, Saving the Planet With Pesticides and Plastic: The Environmental
Triumph of High-Yield Farming (Washington, D.C.: Hudson Institute, 1995), continues to be popular as a readable overview
of realistic agriculture for the future and for today. Readers may write Avery at Post Office Box 202, Churchville, Virginia, 24421.
Email: cgfi@hughes.net
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
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Conservative Government Ensures a Nation's Strength, Progress, & Prosperity