Courtesy of Mish.
By executive order, president Obama has acted to cut greenhouse gas emissions in the US, allegedly to halt global warming. However, greenhouse gas production is a global thing so it’s important to consider global ramifications of US policy decisions.
Starting with Europe’s carbon cap-and-trade, let’s take a look at global events and policies to see if Obama’s plan has any chance of success.
Collapse of Carbon Price Trading
Europe’s cap-and-trade effort is in crisis as a Collapse in EU Carbon Price has rendered the program useless.
The EU Emissions Trading Scheme is in crisis. Yesterday, the European Parliament voted against the backloading proposal which was aimed at increasing the price of carbon permits. After the vote, the price of carbon permits dropped by about 40% to its lowest ever price of €2.63. New Energy Finance predicts that it might fall as low as €1.
Mark Whitaker (BBC): Today, European MPs vote no to a plan to boost the idea of carbon trading as the weapon to combat climate change.
Tamra Gilbertson (Carbon Trade Watch): Perhaps this can be a signal to the rest of the world that emissions trading and market-based solutions are not the solution to climate change.
Mark Whitaker: Not everyone is convinced it actually works, but the cornerstone of Europe’s effort to combat climate change is something called carbon trading, which works on the idea that companies are allowed to buy permits to cover any carbon emissions they make. It’s based on the principle that the polluter pays.
The trouble is, the price of carbon permits has dropped so low that there was scarcely any deterrent at all to pumping out carbon.
Today, the European Parliament voted not to intervene in the carbon permit market to prop up the price of the permits. MEPs had been invited to vote for something called backloading, that’s a plan to delay the issue of any more permits in order to boost the price. It was an invitation that they declined.
Australia Plans to Scrap Carbon Tax
Bloomberg reports Australia’s Abbott Revives Proposal to Scrap Carbon-Price Levy
Australia will re-introduce a bill to repeal a carbon-price mechanism brought in by the previous Labor government ahead of a power shift in the Senate, which has previously rejected the levy’s removal.
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