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:

triangleEU probes power plant for wrongdoing over switch from coal to biomass

triangleThem & Us

triangleSocialist change not climate change

triangleCan biomass energy be part of a socialist plan of production?

triangleHinkley deal - no point in nuclear

Market:

triangleCardiff West Socialist Party: What should socialists say on Trident?

triangle476,000 homes in England go unbuilt by speculators

triangleCameron's 10,000 new homes won't hide the problem

Pay:

triangleWorkplace news in brief

triangleContinued action in crane drivers' pay dispute

Global:

triangleWorld economy heading into a storm

Global warming:

triangleTories' hypocritical green policies pledge

Reports and campaigns

Reports and campaigns

11/2/16

Doctors

Doctors fight contract imposition - updated leaflet

11/2/16

South Wales

Public meetings show readiness of workers to fight back

10/2/16

Doctors

Doctors' strike 10th February - photos and reports

10/2/16

Solidarity

Demo in solidarity with Kurdish people: 6th March

10/2/16

Union

Workplace news in brief

10/2/16

Pay

Continued action in crane drivers' pay dispute

10/2/16

Tesco

Cuts to premiums mean no 'rise' in store for Tesco workers

10/2/16

Leicester

Leicester taxi dispute: Labour's rank hypocrisy

10/2/16

Academies

Big victory at Small Heath School against academy attack

10/2/16

Leeds

Leeds meeting expresses Corbyn and McDonnell's contradictions

10/2/16

Portsmouth

Portsmouth: support for anti-austerity stand

10/2/16

South London

South London: Library workers strike to save services

10/2/16

Redditch

NHS campaign gains support

10/2/16

Yorkshire

Anger against plans to close Bradford libraries

10/2/16

Torbay

Torbay: "A tale of two towns"

triangleMore Reports and campaigns articles...

triangle11 Feb Public meetings show readiness of workers to fight back

triangle10 Feb Lack of strategy - and exclusions - threaten Momentum

triangle10 Feb Doctors' strike 10th February - photos and reports

triangle10 Feb No-cuts strategy needed to save 25,000 council jobs

triangle10 Feb South London: Library workers strike to save services

triangle10 Feb Cameron's EU renegotiation charade

triangle9 Feb Labour right wing blocks call to debate budget cuts

More ...

triangle13 Feb Socialist Students conference

triangle13 Feb Barking & Dagenham Socialist Party: The Matchgirls' strike and the birth of general trade unions

triangle15 Feb Leeds Socialist Party: Sanders, Trump, and the US elections

triangle16 Feb Plymouth Socialist Party: Democratic Centralism

More ...

Share on Facebook
Share on Twitter
Visit us on Youtube

Find us on Facebook

Archive

Categories

1-9 

1-9 


Archives:

February 2016

January 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