Tuesday, April 23, 2013

I now get why Europeans are disgusted with the European Parliament

The European Parliament last week rejected a fix to their cap-and-trade system that would have set a bottom floor to the price of carbon, a floor that likely helped keep California's system functioning through a tentative start to a better shape (so far).

Among other things that are annoying is that European fossil fuel-dependent industries say that a floor will put them at a competitive disadvantage to Americans, an ironic repetition of what the same American industries say about Indian and Chinese competitors. In Europe's case it also happens to be a lie as far as California's concerned, and dubious in the case of New England (has an existing-if-low price for carbon, and plans to restrict allocations further).

So you've got a system that can work if you make it work. Demanding that the sausage making of government work as well as one's ideal proposal (like a carbon tax that would supposedly emerge unscathed from a political process) is unrealistic, but then the failure to improve the solution is just stupid. The only good aspect is that it's not over - the Parliament left open the door to reconsider their action.


Anonymous said...

I think there was some discussion in 1991 about the eventual failure of cap'n'trade.

Hank Roberts said...

Ya gotta remember -- one way to get rich is to be in a Parlaiment or Congress, know how the law's going to change before the public, and buy or sell stock.

That's not illegal.

(It was for a brief period in the US but the Congress repealed the law that kept them from their $$PROFIT$$)

Wanta bet the European Parlaiment is similarly situated?

Just speculating of course.

Hank Roberts said...


Hank Roberts said...

to be precise -- it's illegal, but the law making it possible to find out if it's happening lasted less than a year. As NPR wrote:

"... two major elements of the law remain. Insider trading is illegal, even for members of Congress and the executive branch. And for those who are covered by the now-narrower law, disclosures of large stock trades are required within 45 days. It will just be harder to get to them...."

So, how's the European P-whatsit work? Any chance they're screwing with the law to jiggle the market prices to make small personal profits? Yes, I'm sure it's wrong, but is it either illegal or possible to discover?

Anonymous said...

the extreme green view of this might be like the following; the system was set up with loopholes to local coal, north atlantic oil, local peat, biodiesel. Natural gas was considered better than other fossils so the Baltic pipeline was/is profitable. it added a layer of lobbyists and regulators with minimal effect to BAU (except in germany, spain and portugal who have been otherwise active). the current trend in the right, i guess, is to allow loophole for fracking too (which is done in Greece already AFAIK), so the europe is a few years (like ~10) behind US in this respect. Companies externalize carbon credit costs (what little there's left) to developing countries if they can't lobby local governments to support their continued BAU.

Anonymous said...

wouldn't be surprised if the current crisis in European markets would be connected to the disfunctional system by someone.

Martin Vermeer said...

> So you've got a system that can work
> if you make it work.

Precisely. I have no strong feelings on the betterness of C&T, carbon tax, regulations or what not, but I do have a strong feeling that those pushing for a carbon tax to replace C&T are being slightly naive... it's only flawless for not existing yet.

Anonymous said...

No, Eli, lot too simple. I appreciate the European Parliament (EP) very much. Most times it's doing a great job (maybe because it has not much power).

Sure, it was an odd decision, but it's not so easy. You often hear about too many certificates because of the economic crisis. True, but there's a deeper problem:

The amount of allocated is restricted to the target of -20% CO2-reduction. This target is achieved already, so there's no gap between target and emissions.

What's really needed is a new target, let's say 30%. Unfortunately it's a bad time for new targets, economic crisis etc. And very important: There's a discussion about failing CO2-negotiations, rising emissions and why should Europe take further steps forward alone? I think, what we really need in Europe is a succes in world climate negotiations.


Brian said...

Andreas, I think the EU isn't integrated enough in that it's so difficult to change the plan. Or alternatively, the problem's that individual countries aren't moving forward on their own to fix the system like we're seeing on the state level in the US.

Anonymous said...

Brian (sorry for wrong naming),

that's true. EU politic is too slow when quick reactions are necessary. All in all I've come to the conclusion that a carbon tax would have been the better way handling CO2 reductions for the EU. But I'm not sure about the consequences for world climate politics.

Of course, we have lobbyists and some skekptics in EP, too, but not enough to change EU climate politics. If you want to understand the point of view of the most nay-sayers, I recommend David Robert's article at grist:

To make it clear: I think, it was a terrible mistake and I hope, the EU will find a real fix beyond backloading plans.