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Kyoto Plan

Update- from the Globe and Mail: Canada may need to buy Kyoto credits

Can someone explain to me how purchasing credits to meet our emission requirements actually constitutes a real reduction of emissions?

Oh, its because it doesnt.

This is beginning to look more and more like a money grab.

The new Kyoto plan will be unveiled today. I read it early this morning and it is quite amusing. About as amusing as an elderly Liberal going to punk rock shows.

Essentially the jist of it is that the Liberals are 'banking' on us citizens to cut down on emissions and therefore receive a credit if we do so (not that there is any quantitative way to measure anyhow). This is kinda like a parent telling her son to clean his room, but he doesnt have to, though if he does he gets a meaninless gift (15 dollars per megatonne). I wonder how many citizens will even bother.

From the TorStar:

That means if a farmer, for example, doesn't plow his fields (each plowing results in a release of carbon dioxide), the federal government will pay $15 for each tonne of greenhouse gas that is not emitted. Or, if a town switches its fleet of vehicles to hybrids, the government will pay $15 to the town for each tonne of greenhouse gas emission it saves.

yea...

Ive always thought Liberals were incompetent but this new Kyoto plan really takes the cake.

More on this later, in the mean time leave a comment and tell me what you think of it....
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4/13/2005 01:03:00 AM

I think I get your joke about Liberals and punk rock shows... :P    



4/13/2005 03:40:00 AM

On the other hand, a positive outcome is that you could offer a Liberal MP the choice between standing in the House of Commons and blowing hot air, or 15 dollars. I think that most would choose the latter, so maybe this is a good thing, as it would pay for Martin et. al. to shut up.

Clearly, though, you gotta ask who's going to be buying and selling the credits - Power Corp, maybe? In that case, old Maurice Strong makes a kiloton of cash.    



4/13/2005 06:40:00 AM

I would like to see what corporation will be the principle credits trader.

Do you remember when Enron commoditized the natural gas market thereby creating a tradable market? Well, all Kyoto is doing is commoditizing the credits, thereby making a tradable market.

One of the reasons why Enron was initially successfull is because they had inside knowledge of the market which led them to excell at it and make billions. Power corp is the same way, and likly will make a similar return.    



4/13/2005 07:04:00 AM

Kyoto seems more and more like a massive global redistribution scheme — redistribution of wealth from developed nations to less developed nations, particularly China and India, and redistribution of wealth to poverty by rewarding non-productivity from the pockets of the productive.

Heaven help us.    



4/13/2005 09:21:00 PM

The theory behind GHG emissions credit trading is sound. It creates a market that rewards those who can produce a certain good more cheaply (in this case, reduced GHG emissions) than others, and directs money their way. This money encourages others to develop the ability to cut emissions; the flip side is that it imposes a cost on those who cannot (or simply do not) cut their emissions. It is a nice solution to reducing emissions by direction from "the invisible hand" instead of the all-to-visible (and all too heavy) hand of the likes of David Anderson.

There are several problems with the current trading regime. The most obvious is that "developing nations" like India and China are not included - to the extent that emissions reduction imposes a cost, they will gain a trading advantage over nations that are subject to Kyoto restrictions and the accompanying costs of adjustment. This has to be a concern for Canada (not that Liberals will acknowledge it), given that our largest trading partner decided not to implement Kyoto.

In a perfect world, US (and other) consumers would choose between a car -say- made in Europe, Canada, or in the US, and if all countries involved were subject to Kyoto, all of the manufacturers would have priced the cost of GHG emissions into their products. Those that managed to reduce emissions the most cheaply would have a cost advantage over the others. Now, given a choice between a GHG-reduction-included price on the European and Canadian car, and a non-GHG-reduction-included price on the domestic product, our US consumer is more likely to choose the domestic product. More to the point on a global scale, China and India are about to get a big boost in competitiveness. For those of you who have not been paying attention, neither country really needs the help right now. There is (at least at present) no mechanism for charging a GHG-equivalent tariff so that a Canadian or European consumer is not induced to buy non-Kyoto origin goods, either, although give the Eurocrats time and they will no-doubt impose one and we will copy it a couple of years later.

The second big problem with Kyoto is that the emissions targets were based on emissions levels in 1991 - immediately before the USSR's (as it then was) economy imploded. As a result, the Former Soviet Union is sitting on a huge basket of emission-room, which they are now free to sell. This will be the massive wealth transfer - from Europe (primarily) to the FSU, and all in exchange for nothing - the FSU will continue to be an environmental nightmare; but since they screwed up their economy beyond all recognition, they will be less of a nightmare (on an absolute scale - on a relative scale of pollution / GDP they will still be horrible) than they were before. The money that goes to the FSU will not clean up anything - with the economy working so far below nominal capacity and below the Kyoto limits there will be no pressure to actually reduce current emissions.

Cheers,

Dean    



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