The green jewel was the Emissions Trading Scheme (ETS)—the European-wide carbon market, by far the largest such system in the world. The ETS, launched in 2005, allowed Europe to put a common price on a ton of carbon, which was meant to encourage utilities and factories to reduce carbon emissions in the most efficient way popular … But the ETS—and carbon trading more generally—is not doing well, and its problems are taking some of the green shine off of Europe. Since its launch, the ETS has struggled, with the price of carbon falling as the 2008 recession and overly generous carbon allowances undercut the market. – TIME
Dominant Social Theme: Market forces can take care of the carbon threat.
Free-Market Analysis: In our lead article, we discussed the way government regulation and market forces were being manipulated to pressure corporations to self-regulate when it came to potential carbon production and resources that would add to it.
In this article from TIME, we can see even more clearly the reasons why it is necessary for the powers-that-be to come up with different solutions. The much touted carbon marts themselves are not working. The US mart failed last year and now the biggest one of all – the European Trading Scheme – is also being seen as a failure.
This is not surprising because there is a good deal of controversy over global warming and because the markets themselves are entirely artificial creations. No wonder those who built them couldn't get it right. There is apparently too much supply and not enough demand. The result is a continual price drop. Here's more from the article:
America may be a bit of a mess when it comes to climate policy—though that mess has been surprisingly effective in reducing carbon emissions in recent years—but environmentalists could always look across the Atlantic Ocean to Europe, where greens are green, cars are small and global warming actually matters.
Countries like Germany and Spain have led the way in supporting renewable energy, and cities like Amsterdam and Copenhagen put America to shame when it comes to encouraging dense development and carbon-free cycling. But carbon emissions much, which erodes the demand for additional carbon allowances on the market and causes the price to drop.
Prices fell from 25 euros a ton in 2008 to just 5 euros a ton in February. There was a way to fix this—take 900 million tons of carbon allowances off the market now and reintroduce them in five years time, when policymakers hoped the economy would be stronger and demand would be greater. As anyone who's taken Econ 101 would know, artificially reducing the supply of carbon allowances in such a drastic way—something called "backloading"— should force the price back up.
But on April 16, the European Parliament surprised observers by voting down the backloading plan. In turn, the European carbon market collapsed, with the price of a carbon allowance falling by more than 40% over the day. "We have reached the stage where the EU ETS has ceased to be an effective environmental policy," Anthony Hobley, the head of climate change practice at the London law firm Norton Rose, told the New York Times. The ETS is a mess.
What Hobley isn't mentioning here, but is referred to further down in the article, is that Eurocrats are concerned about burdening the corporate economy. This may sound strange, given that Brussels doesn't seem overly worried about the impact of the millions of regulations that pour out of it every year. But there is a difference: Green carbon regulations affect all parts of the larger economy. Get it wrong and you can turn a steep recession into a generalized depression or worse.
The TIME article does manage to spell this out: "Backloading failed because even in very green Europe, economic concerns seemed to trump environmental ones. European Parliamentary members worried that any action that would cause the price of carbon to rise would add to European industry's already high energy costs."
Okay. While it was contemplated that companies themselves would be on the front lines of carbon reduction, this seems to be a less viable strategy now. Instead, governments are encouraging corporate credit companies like Moody's to evaluate corporate risk based on their resource base and whether or not there is a significant risk that energy supplies are going to be disallowed by burgeoning regulations.
While the costs would have been passed on to consumers either way eventually, this latter approach (that uses corporate valuations as its basis) directly attacks consumers – for corporations shall surely pass the cost of re-sourcing their energy needs directly on to the consumer within a real-time environment.
TIME concludes that "Carbon markets may be finished. If carbon trading can't make it in Europe, it can't make it anywhere." But as with so many strategies that are designed to reinforce globalism, those behind these schemes are now turning to more direct and blunt means of coercion.