CAP&TRADE – TOXIC OR TERRIFIC (1)?

Friends of the Earth attacks carbon trading; An FoE report says 'cap and trade' carbon markets have done little to reduce emissions but have been plagued by corruption and inefficiency
Ashley Seager, 5 November 2009 (UK Guardian)

"The [UK] government's reliance on carbon trading schemes is inefficient and could cause a financial crisis similar to that seen with sub-prime mortgages, says Friends of the Earth…The world's carbon trading markets growing complexity threatens another "sub-prime" style financial crisis that could again destabilise the global economy…

"…Friends of the Earth says that to date "cap and trade" carbon markets have done almost nothing to reduce emissions but have been plagued by inefficiency and corruption that render them unfit for purpose."

From FriendsoftheEarthUS via YouTube

"As the world heads towards the Copenhagen climate summit, Britain and other developed countries want to see carbon trading expanded worldwide. The carbon market, mainly based in Europe, was worth $126bn in 2008 and is predicted to mushroom to $3.1tn by 2020 if a global carbon market takes off.

"…FoE fears that the area has been hijacked by speculators on the financial markets…[T]he trade is carried out not between polluting industries and factories covered by carbon trading schemes, but by banks and investors who profit from speculation…[and package] carbon credits into increasingly complex financial products…"

Europe's emissions market has recovered from the worst part of the recession and is waiting for a better economy. (click to enlarge)

"The FoE claims that the first phase of the European emissions trading scheme between 2005 and 2007 failed. And the second phase, from 2008-2012, is likely to fail too, it said…[calling for] more reliable instruments such as carbon taxes, which are harder to avoid and can be effective at changing people's behaviour and reducing emissions…"

[UK Department of Energy and Climate Change spokesman:] "We agree that domestic action by developed countries as well as public finance is essential to meet the challenge of climate change and … the UK is going all-out to get an ambitious, fair and effective deal…But carbon trading can also play a role, making it far more likely that we tackle dangerous climate change, get cost-effective emissions reductions and get money to the poorest countries of the world."