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:

triangleSocialist change to remedy climate change

triangleTories and Labour refuse moratorium on fracking

triangleClimate change: Socialism and global planning essential

triangleFloods: fully-funded environmental planning needed

triangleDebate on the environment

Market:

triangleDerby TUSC meeting: Why you should vote for TUSC

triangleCuba: Capitalist restoration threat accelerates

triangleNHS crisis: Establishment parties can't be trusted

Pay:

triangleBromley council workers show how to fight Tories

triangleUnison health backs 10 an hour call

Global:

triangleGlobal Fast Food Rights day of action

Global warming:

triangleSocialist change to halt climate change

Reports and campaigns

Reports and campaigns

15/4/15

Scotland

Glasgow and Dundee: All-out strikes demand fair pay

15/4/15

Bromley

Bromley council workers show how to fight Tories

15/4/15

Appeal

Election appeal update

15/4/15

The Socialist

Build TUSC with this paper

15/4/15

Unison

Unison health backs 10 an hour call

15/4/15

Glasgow

Glasgow strikers: 'We're all in it to win it!'

15/4/15

DWP

PCS: Defending check-off in DWP

15/4/15

York

Putting socialism back in LGBT politics

15/4/15

Fast Food Rights

Global Fast Food Rights day of action

13/4/15

Gateshead

Lift workers strike over 'spy in the cab'

10/4/15

Fast Food Rights

Fast Food Rights action - 15th April

9/4/15

Council

Dundee porters and Glasgow council workers on indefinite strike

8/4/15

NUT

Teachers want action on cuts and workload

8/4/15

Fighting Fund

Fighting Fund success

8/4/15

Unite

Workplace news in brief

triangleMore Reports and campaigns articles...

triangle15 Apr We can end the housing crisis

triangle15 Apr Global Fast Food Rights day of action

triangle15 Apr Yemen: Brutal onslaught on country's poor

At the 2015 TUSC manifesto launch, photo Senan

triangle15 Apr Labour - party of cuts

triangle13 Apr Lift workers strike over 'spy in the cab' that doesn't work

photo Paul Mattsson

triangle8 Apr Low pay? No way!

photo Paul Mattsson

triangle8 Apr NHS fees warning: Vote TUSC

More ...

triangle18 Apr Barking & Dagenham Socialist Party: What is TUSC's strategy for ending austerity?

triangle20 Apr Chesterfield Socialist Party: The Greens - A real alternative or more of the same?

triangle20 Apr Leeds Socialist Party: Do socialists support a 'universal basic income'?

triangle21 Apr Liverpool Socialist Party: Are the Greens an alternative?

More ...

Share on Facebook
Share on Twitter
Visit us on Youtube

Find us on Facebook

Archive

Categories

1-9 

1-9 


Archives:

April 2015

March 2015

February 2015

January 2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice