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:

triangle'Dazzling' Bad Art show points to socialist future

triangleObesity epidemic: end food market anarchy

triangleNasty party imploding...drive out the Tories

Pay:

triangleVirgin train workers vote for strike action over pay

triangleThe Socialist Inbox

Global:

triangleSE London Socialist Students & Socialist Party: Global warming - A global threat

Global warming:

triangleExtreme weather events and global warming

Reports and campaigns

Reports and campaigns

16/11/17

Sheffield

Sheffield Eastern Ave Job Centre strike ends

16/11/17

Virgin

Virgin train workers vote for strike action over pay

15/11/17

Students

March for free education! We demand a future!

15/11/17

Plymouth

Plymouth PCS members fight relocation threat

15/11/17

Virgin

Virgin train workers ballot for strike action

15/11/17

Carlisle

Carlisle socialists campaign against Universal Credit

15/11/17

Haringey

Corbyn must challenge pro-gentrification council leader or others will

15/11/17

Socialist Party

Why I joined the Socialist Party: "I started to question whether there was a better way"

13/11/17

Manchester

Strike wave continues with 49 walkout days by housing workers

10/11/17

RMT

Strikers picket the South Western Railway network

10/11/17

Merseyside

Huge support for strikes of bus drivers and train guards

10/11/17

Socialist Party

Highest ever ticket sales for Socialism event

9/11/17

Pay

Serco - not fit for purpose

9/11/17

Rail

Fight to keep guards on trains continues despite setback Aslef deal

8/11/17

Birmingham

Brum meeting celebrates centenary of 1917

triangleMore Reports and campaigns articles...


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

triangle15 Nov March for free education! We demand a future!

triangle15 Nov Tories on the brink - kick them out!

Socialism 2017

triangle14 Nov Socialism 2017: Organising to fight back

triangle13 Nov Strike wave continues with 49 walkout days by housing workers

triangle10 Nov US: Historic vote for Ginger Jentzen campaign in Minneapolis

triangle10 Nov Strikers picket the South Western Railway network

triangle10 Nov Europe in crisis, revolutionary winds in Catalonia

More ...

triangle21 Nov Bristol North Socialist Party: Venezuela - the battle to be faced by a Corbyn government?

triangle21 Nov Cardiff Socialist Students: Socialism and the struggle for LGBT rights

triangle21 Nov Birmingham South East Socialist Party: NHS in Meltdown - What can be done?

triangle21 Nov Sheffield North Socialist Party: The causes of capitalist crisis

More ...

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

Archive

Archives:

November 2017

October 2017

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