Link to this page: http://www.socialistparty.org.uk/issue/566/6892

From The Socialist newspaper, 11 February 2009

Carbon trading: Crisis creates bonanza for polluting firms

THE HOPE of the bureaucrats who devised a European carbon permit trading system to tackle global warming was that polluting firms would have to pay for their anti-social actions, so letting 'market forces' encourage green behaviour. However, due to the crazy market system, it is now clear that the worst environmental culprits, far from being made to pay up, are actually being paid by us to continue polluting.

Pete Dickenson

The permit trading system operates by issuing companies with a quota of permits to emit carbon dioxide, the gas that is mainly causing global warming. If firms need to emit more they must buy permits from other companies, so encouraging them in theory to invest in renewable energy.

According to Paul Newman of the brokerage Inchcape, the price of the permits must be between 35-45 to have any chance of success but it has never reached this level. In fact, governments issued so many permits for the first three years of the scheme they were virtually free, so undermining the whole claimed logic of the system.

To try to rectify this, the permit system was revamped in 2008 to push the price up, which resulted in it rising to 30 last summer, but this proved to be only temporary and it quickly collapsed to 11. This fall partly caused the nosedive in investment in green technology that coincided with the economic crisis that began last autumn.

The reason for the current low price is perverse but entirely 'rational' from a capitalist point of view. The price of permits fell because a large number of them came onto the market late last year, so forcing down the cost. This was a direct result of the fall in production due to the economic crisis. It meant greenhouse gas emissions by the main polluting industries also fell, allowing firms to sell unwanted permits (see the Global Warning column in Socialism Today, December/January 2008/09 for more background).

The fall in the price of oil, due to the economic crisis, reduced the market incentive for firms to make green investments, but perversely the price of carbon permits fell at the same time, reinforcing this effect, at a time when, according to market logic, the price needed to go up to encourage green behaviour.

The main industries that appear to be selling permits are cement and steel who are some of the biggest polluters and where output is expected to drop by 20% and 15% respectively this year.

Highly profitable

A study commissioned by the WWF environmental pressure group, found that British companies such as these could make 15 billion from selling unwanted permits, a figure that was calculated before the current downturn and so will be far higher now.

The scandal is that most firms cashing in on this did not pay for the permits in the first place, they got them for free, or virtually for free, due to government policy.

The money they will get is therefore largely clear profit, a reward for continuing to emit huge quantities of greenhouse gases, making a complete mockery of the 'make the polluter pay' market mantra.

To make matters worse, the power-generating companies are buying these unwanted permits and passing on the cost to us, their customers according to The Guardian (28 January).

It is not due to mistakes or teething problems that the permit trading system has been a fiasco.

Its failure is rooted in the structure of capitalism: a system where it is impossible to reconcile the needs of the corporations to maximise their profits and therefore to minimise what they pay for carbon permits, and the imperative to take decisive measures to stop global warming.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 11 February 2009:

Bankers' bonuses - daylight robbery!

Vendetta continues against socialist fighter

JCB owner - still shovelling in the cash


Construction workers

Lindsey oil refinery strike: Workers score important victory

Construction workers' battle to defend jobs and conditions

Welcome to the JIB!

Motherwell Bridge bosses declare war on striking workers

Stop GSK job cuts


Socialist Party youth and students

Defend youth services

College students - keen to fight back

Save Charlotte Turner school!


Socialist Party campaigns

Tyneside Metro: Workers' action to stop privatisation

Carbon trading crisis creates bonanza for polluting firms

Exeter: Mobilising to stop the far right

Fast news


Car workers

Fight for jobs at Ford

Car industry in crisis - national meeting


Socialist Party workplace news

Wirral cuts: We need a new party

Victory for Salford Unison

Defend jobs at Salford University

Usdaw presidential election

Protest against the Unison witch-hunt

Greenwich council: An injury to one is an injury to all


International socialist news and analysis

Nationalise Waterford Crystal!

United Socialist Party members remanded on trumped-up charges


Socialist Party review

Slumdog Millionaire


Football

Reclaim the game


 

Facebook   Twitter



Home   |   The Socialist 11 February 2009   |   Join the Socialist Party

Subscribe   |   Donate   |   Bookshop






Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter



Related links:

Carbon:

triangleClimate change: Socialism and global planning essential

triangleFloods: fully-funded environmental planning needed

triangleDebate on the environment

triangleNothing achieved by UN climate talks

triangleEnergy for the millions ...not the millionaires

Market:

triangleThem & Us

triangleEnergy giants' profits continue to defy the laws of gravity

triangleSupermarket price wars

Pay:

triangleDemonstration for all bus drivers to receive decent pay

triangleUS: building a movement to end poverty pay!

Global:

triangleTeesside Socialist Party: Environmental crisis - can governments halt global warming?

Global warming:

triangleSystem change to save the environment

Reports and campaigns

Reports and campaigns

16/9/14

Tommy Sheridan

Tommy Sheridan on BBC's Sunday Politics

11/9/14

London

Demonstration for all bus drivers to receive decent pay

11/9/14

FBU

FBU Ring of Fire tour

10/9/14

Teachers

NUT members angry at lack of October strike action

10/9/14

Tamil Solidarity

Solidarity Day: a great success

10/9/14

Napo

Probation officers protest against privatisation

10/9/14

Leicester

TUSC councillors back taxi struggle

10/9/14

Strike

Workplace news in brief

10/9/14

Health

Labour lets down NHS protesters

10/9/14

Manchester

North West marches for end to austerity

10/9/14

TUC

TUC votes for 10 minimum wage

10/9/14

Doncaster

Care UK workers set for longest NHS strike

9/9/14

Socialist

Socialist Party campaigning

8/9/14

NSSN

NSSN rally: Building pressure for the widest possible coordinated anti-austerity action

6/9/14

NUT

NUT executive opposes participation in 14 October strikes

triangleMore Reports and campaigns articles...

triangle16 Sep Inequality and fightback in the richest country in the world

The Socialist (Scotland)

triangle16 Sep Scottish referendum: 'Britain will never be the same again'

London bus drivers' campaign, photo Judy Beishon

triangle11 Sep Demonstration for all bus drivers to receive decent pay

triangle10 Sep Ebola virus: Victims of a failed capitalist system

 University, college and school students protest in central London against higher tuition fees and education cuts , photo Suzanne Beishon

triangle10 Sep Students: Fight debt, poverty and capitalism

Tamil Solidarity Day attendees listen to Unison executive member April Ashley, photo Fauzer Mahroof

triangle10 Sep Solidarity Day: a great success

triangle10 Sep Probation officers protest against privatisation

More ...

triangle17 Sep Hackney & Islington Socialist Party: Recent events in Ferguson - Racism in USA

triangle18 Sep West London Socialist Party: How the arms trade fuels war

triangle18 Sep Lambeth Socialist Party: How to build a socialist alternative

triangle18 Sep Waltham Forest Socialist Party: Scotland in revolt against austerity

More ...

Share on Facebook
Share on Twitter
Visit us on Youtube

Find us on Facebook

Archive

Categories

1-9 

1-9 


Archives:

September 2014

August 2014

July 2014

June 2014

May 2014

April 2014

March 2014

February 2014

January 2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice