Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

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


 

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

Subscribe   |   Donate  




Related links:

Carbon:

triangle47,000 kids exposed to illegal toxic air

triangleUN climate change summit: more hot air from Marrakech

triangleHinkley Point C: wasteful, dangerous and polluting

triangleClimate chaos

Market:

triangleHow the Single Market blocks socialist policies

triangleReject Starmer's Single Market u-turn

triangleThe Single Market: a neoliberal tool of the bosses

Pay:

triangleStrike to save our NHS!

triangleCWU strike ballot - why I'm voting Yes

Global:

triangleExtreme weather events and global warming

Global warming:

triangleTrump and the fossil fuel corporations - a lethal combination for the planet

Reports and campaigns

Reports and campaigns

22/9/17

Southwark

Ledbury tenants fight for decent homes

20/9/17

Nottingham

Interest at Nottingham Green festival

20/9/17

East London

East London summit fails to address housing crisis

20/9/17

Mansfield

Tragic death highlights Chatsworth ward closure risk

20/9/17

Socialist Party

Fight for an alternative to the misery of capitalism

20/9/17

Haringey

Protest to pressure Labour to scrap Haringey redevelopment plans

20/9/17

London

London Buses safety campaign

20/9/17

Woolwich

McStrike solidarity event

20/9/17

Leeds

Fight university's 'sackers' charter'

20/9/17

Royal Mail

CWU strike ballot - why I'm voting Yes

20/9/17

Drivers

London bus drivers' rally

19/9/17

East London

Deal concludes Barts health strike - "We have raised our heads high"

19/9/17

Birmingham

Bin workers vote to continue action following rally

13/9/17

Bristol

Thousands march - mayor needs real anti-cuts strategy

13/9/17

Russian revolution

Trotsky's "insightful and frank examination" of revolution out soon

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle22 Sep Ledbury tenants fight for decent homes

triangle20 Sep Labour conference: Corbyn's support must be used to defeat Blairites

triangle20 Sep Fight tuition fees

triangle20 Sep Brutal repression of Rohingya people sparks massive humanitarian...

triangle20 Sep Why do young people need socialism?

triangle20 Sep CWU strike ballot - why I'm voting Yes

triangle20 Sep Grenfell inquiry begins: not sufficient, not trusted

More ...

triangle24 Sep Central London: Walk along the steps of Karl Marx

triangle25 Sep Birmingham Central Socialist Party: Care under Capitalism

triangle26 Sep Birmingham South East Socialist Party: What is Socialism?

triangle27 Sep Salford Socialist Party: How we can beat the Tories

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

September 2017

August 2017

July 2017

June 2017

May 2017

April 2017

March 2017

February 2017

January 2017

2016

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

V2