Carbon credits: Fresh off the market

[Desertdog]

One environmental group bought carbon credits in hopes that it would lower the amount of emissions in that region.

Would somebody please explain to me how buying carbon credits will lower the carbon emissions!!

Carbon credits: Fresh off the market
Pete Chagnon - OneNewsNow - 10/3/2008 4:00:00 AM
http://www.onenewsnow.com/Culture/Default.aspx?id=272380

The first ever "carbon credit auction" was held in the U.S. recently, and one organization is calling it a questionable practice.

 

According to an Associated Press report, all fossil fuel-burning power plants in a ten-state region in the Northeast were required to buy carbon credits in the first ever cape-and-trade greenhouse gas auction. The states are part of the Regional Greenhouse Gas Initiative, or RGGI. Over $38 million were spent on the credits, which sold for $3.07 a piece. Marlo Lewis of the Competitive Enterprise Institute (CEI) calls the auction "constitutionally dubious."
 
"Because it is a pact among states, which has not been approved by the U.S. Congress," he explains. "And Article 1, Section 10 of the Constitution has a clause which says that no state shall enter into any treaty, alliance, or confederation with any other state, or enter into any agreement or compact with another state unless it gets the consent of Congress."
 
One environmental group bought carbon credits in hopes that it would lower the amount of emissions in that region. Lewis says it will be interesting to see if the environmental group continues to sit on those credits once they start selling at a higher price.
 
"But it's easy, it's cheap virtue when the permits are only selling for $3 a ton," Lewis contends. "It's a little harder when you could make 500 percent on your money."
 
The $38.5 million raised in the carbon credit auction will allegedly be used on renewable and energy-efficient technologies.

[ctdonath]

From what I can tell, carbon credits are part of the latest pork-laden "$700B bailout" bill.

[Manedwolf]

Two words...

Ponzi scheme

[buzz_knox]

The idea is that you won't "pollute" more than you have credits to cover.   It's the same mechanism used for NOx and SOx emission allowances.  If you set a firm cap on how many credits there are in the system, you then set a cap on how much new pollution gets emitted each year. 

[MrRezister]

Why don't they just call it a tax since that's what it is? 
"You pollute more than you are allowed to pollute, so you must be penalized!"   It's a tax.
But then I guess it wouldn't be as popular.  It's easy to get people to agree to vote for "THE ENVIRONMENT", whereas it is difficult to get them to vote for "THE TAX".

[MechAg94]

Basically it is simply putting caps on carbon emissions.  The idea of the credits is so they can claim they using the "free market" to regulate instead of simply establishing hard limits.  It still adds a bunch of bureaucratic BS.

I don't know of any company that actually uses the NOx cap and trade credits, but I am sure there are a few.  In addition, they use that system to lower NOx emission limits further than the air permits call for.  

[griz]

Would somebody please explain to me how buying carbon credits will lower the carbon emissions!!

In therory it is removing the credits from the market, so they are not available for a polluter to buy.

But for cap and trade to work you have to believe that the Powers That Be in the world will fairly decide:
 Who gets whatever number of credits to sell.  That "who" is world wide.
 They won't change their collective minds later and issue more credits to deserving parties. (unaffected by lobbiest)
 And everybody who pollutes, in any country, will only pollute if they buy enough credits.

Darn reality.

[Scout26]

Would somebody please explain to me how buying carbon credits will lower the carbon emissions!!

Buy some and hold your breath. 

[Sindawe]

Would somebody please explain to me how buying carbon credits will lower the carbon emissions!!

I first heard of the idea nearly 20 years ago from Edmund Burke...

In his fantasy, Burke manages to survive his imagined horrors to become the narrator of his tale. It takes no less than the Planetary Management Authority (PMA) with powers that only Stalin could love. An upper limit on carbon burning is established. The US would use up its allocation before long, but may buy “carbon credits” from Chad or Angola in exchange for advanced technology that will enable third-world countries to “leapfrog past fossil fuel use” into a solar future. Of course, the advanced countries, from whence all this wisdom comes, somehow don't use this wonderful technology to save their civilization.

Source: http://www.energyadvocate.com/burkonly.htm

Sounded reasonable on the face of it, since the assumption of the program was the developing countries would first use the less expensive but dirtier technologies if left to themselves.  Developed nation would "buy" the carbon output of the developing nations in exchange for clean tech and to keep their economies running while they switched over to that same clean tech.


But that is not what is happening (of course),  now its a fee being imposed on those who generate power and products, with the $$$ going to...

[coppertales]

It is all a major bunch of BS.  Follow the money............................chris3

[HankB]

Some people have seen that there are a LOT of consumer dollars flowing to those who generate, produce, distribute, or otherwise provide electricity to consumers - people LIKE to have electricity.

But other "environmentally friendly" companies who have little or nothing to offer the consumer see the flow of money, and figure "GOTTA GET ME SOME!!"

Yet they don't have anything consumers want to buy with their own money . . . which is a problem.

So some bright lad figured out that by creating an imaginary product - carbon credits - they could get consumers to give them money.

But, by and large, consumers didn't. In overwhelming numbers. (People buying things with real money really would like real products in return.)

So using whatever money they had, the "environmentally friendly" companies  bought some politicians who have been working on legislation to FORCE people to buy these imaginary products . . . but since direct billing would cause a voter revolt, they decided to launder the money by requiring energy producers to buy these carbon credits. Imaginary product . . . bought with REAL money.

And of course, the cost is passed on to the consumer, some of whose energy dollars now flow to companies that don't provide energy, but only an imaginary product.

Expect a new/expanded bureaucracy will be needed to manage these carbon credits . . . real bureaucrats managing imaginary products . . . a new regulatory fiefdom for patronage workers, and another opportunity to grow .gov.

In other words . . . it's a scam of titanic proportions.  

[Firethorn]

But that is not what is happening (of course),  now its a fee being imposed on those who generate power and products, with the $$$ going to...

There was talk up here in ND for some of the credits going to farmers switching to or using no-till/strip-till* system - prevents the release/causes the storage of carbon in the farm lands.

Thing is - a lot of farmers already use it because it's cheaper(less passes with a tractor burning expensive diesel), and keeps the soil healthier(fewer chemicals needed).

*Apparently it's tilling is like tilling only a 1" strip where the seeds actually go.

[AZRedhawk44]

Any disclosure so far on broker fees for carbon credit transfers?

[MechAg94]

Would somebody please explain to me how buying carbon credits will lower the carbon emissions!!

I first heard of the idea nearly 20 years ago from Edmund Burke...

In his fantasy, Burke manages to survive his imagined horrors to become the narrator of his tale. It takes no less than the Planetary Management Authority (PMA) with powers that only Stalin could love. An upper limit on carbon burning is established. The US would use up its allocation before long, but may buy carbon credits from Chad or Angola in exchange for advanced technology that will enable third-world countries to leapfrog past fossil fuel use into a solar future. Of course, the advanced countries, from whence all this wisdom comes, somehow don't use this wonderful technology to save their civilization.

Source: http://www.energyadvocate.com/burkonly.htm

Sounded reasonable on the face of it, since the assumption of the program was the developing countries would first use the less expensive but dirtier technologies if left to themselves.  Developed nation would "buy" the carbon output of the developing nations in exchange for clean tech and to keep their economies running while they switched over to that same clean tech.


But that is not what is happening (of course),  now its a fee being imposed on those who generate power and products, with the $$$ going to...

The problem that first idea is:
1.  Most clean Tech requires one to operate and maintain things a certain way to achieve the lower emissions.  Often, they have to run inefficiently.  Burners on a gas fired heater have to be adjusted properly for example.  Ammonia has to be injected to control NOx emissions.  Etc.  If they don't have to spend the money or bother keeping up with the adjustments, why would a 3rd world business do this?  Just having the equipment and capability doesn't guarantee lower emissions.

2.  Many countries, even 3rd world, have similar emissions limits as we do already, just not as strict.  How much benefit will there be?  Will they upgrade older plants or grandfather them in?

[The Annoyed Man]

So, why can't we start selling these? I figure there must be people who are foolish enough to buy them without .gov telling them to? Imagine, we could use the money to fund the APS Pirate Hunting/Seal Clubbing Expedition!

[wideym]

Okay everybody here is your chance to buy HME (Human Methane Emmisions) credits from me at a low introductry rate of $.02 an emmision or 12 for dollar.  This gives you a guilt free mind whenever  you pollute your local atmosphere and all proceeds go toward filling my gas tank. 

Get in on the ground floor before prices rise or the goverment takes over the operation.