Thursday, January 29, 2009

BRITISH CAP & TRADE TURNS INTO A SCAM

Guardian, UK - Britain's biggest polluting companies are abusing a European emissions trading scheme designed to tackle global warming by cashing in their carbon credits in order to bolster ailing balance sheets.
The sell-off has helped trigger a collapse in the price of carbon, making it cheaper to burn high-carbon fossil fuels and leading to a fall in the number of clean energy projects. The moves were seized on by environmentalists and other critics who have previously criticized the European Union's ETS for delivering more windfall profits for business than climate change.

Steel, concrete and glassmakers are believed to be the main sellers along with financial speculators such as hedge funds. The sell-off of the pollution permits has led to carbon prices plunging 60% . . .

Environmentalists expressed anger last night about the way the ETS was being used. "The ETS has bowed to corporate self-interest at every stage of its design and implementation, so there is no surprise that it is now being used as a cash cow to see firms through a difficult financial phase," said Oscar Reyes, a researcher with Carbon Trade Watch.

"Recession in Europe is bringing a slowdown in manufacturing meaning less production and less emissions. Companies are doing exactly what is the rational thing to do in these circumstances which is to sell if they are long on credits. It is right that if they are emitting less then they do not need the credits so much and the price of carbon will fall," said Henrik Hasselknippe, global head of carbon at Point Carbon.