Back when global warming had some standing, Europe committed itself to lead the world in the battle to clean the environment. Accordingly, the EU penalized those who produced too much CO2 through an aggressive and punitive policy of cap-and-trade. The system, which involves 31 countries, levied carbon emission limits upon 11,000 companies. Those who diminished their carbon emissions were able to sell their credits to others who could not cut back. This, of course, turned carbon credits into a tradable commodity with a value directly determined by the free market.
Back in the giddy summer of August of 2008, EU carbon emission credits reached a peak price of $40 per ton. “Carbon dealers” bought and sold these credits jeopardizing the supposed intent of the credits. Carbon credits were much more the result of a political agenda than an environmental emergency. Many believe that they were instituted as a big stick to cudgel industry and make the world a greener place.
In response to high fuel costs, the economic downturn and these same high carbon taxes, industry simply adjusted using cleaner and more efficient fuels. The surge in natural gas use has especially diminished CO2 emissions.
Now, it seems the unimaginable has happened. The carbon bubble has burst and environmentalists are left scrambling as to how to advance their agenda. Carbon credits have flooded the market, and no one seems to want them or carbon dealers. The price for carbon emissions has plummeted to a mere $3.60 per ton and it does not look as if it will be climbing up any time soon. The once green future of the commodity called carbon credits has been severely tarnished by the reality of the free market.
One would think ecologists the world over would rejoice over the good news of less carbon emissions! After all, the environment is now so much cleaner and the danger of “global warming” lessened.
Alas! The green lobby is distraught over the good news. A major weapon in their arsenal is gone. Companies are no longer intimidated by cap-and-trade threats. Moreover, Europe’s cap-and-trade was to be the anchor for a network of cap-and-trade systems worldwide. With the EU bickering over how to fix their collapsed cap-and-trade system, it is unlikely that, after several failed environmental summits, it will reach a global accord by 2015.
The European Parliament tried to come to the rescue by setting up a minimum price for carbon credits to shore up the bloated market. However, the effort was defeated by Poland, a country that depends heavily upon coal power.
European green-friendly politicians are between a rock and a hard spot. They sought, on one hand, to satisfy the green crowd by instituting punitive cap and trade policies to deal with an urgent crisis. Now, they must scramble to keep the crisis going as the bottom has fallen out of the carbon credit market and ended the supposed emergency.
It seems the only option open for leftist politicians who push the liberal green agenda is to recycle. That is, recycle the same old socialist arguments, the same old emergencies and the same green myths in the hope that something might evolve and survive in the real world.