Other beneficiaries of the EU ETS include extra-EU companies deliberately producing emissions to take advantage of the scheme. ETS installations are able to buy up to half their allowance in the form of the cheaper credits available through the Kyoto Protocol’s Clean Development Mechanism and these credits, called Certified Emission Reductions (CERs), are worth the same as EU ETS credits. These are generated by reducing emissions in developing nations and were designed to incentivise green investment there. However, entire companies have developed to manipulate this. In China especially, firms produce the gas HFC-23, which is 11,700 times more potent than CO2 so it generates 11,700 credits for each tonne destroyed. With a profit margin of 7,000%, it is little wonder the World Bank has invested in some of these firms (and lobbied to delay the EU from banning them) and the Chinese Government even taxes the firms’ profits at 65%. The only other winners are the big financial firms that assess the worthiness of these projects on behalf of the UN and are paid on the number of CERs they can generate for their clients: a gross conflict of interest. A study of the top five UN-accredited validatory bodies found that on a scale from ‘A’ (very good) to ‘F’ (very poor), none scored higher than ‘D’.
The EU ETS is not fit for purpose and there is little reason to foresee the scheme getting better. Indeed, as auctioning grows and prices of energy and goods are forced higher, the average consumer will be made worse off and for nigh on no environmental benefit. The EU technocrats have buried their head in the sand about this and all ‘solutions’ have been minor and tokenistic. As far as they are concerned, to admit the scheme is flawed is to admit they are wrong. This is not something they wish to advertise. Overall, the ETS has been hijacked and become a route to extract money out of good intentions, and this goes for the UK Government as well, which will receive £4-8 billion from it per annum from 2013 but refuses to earmark it to spend on energy-related issues or alleviating fuel poverty. As a consequence, it would be hard to defend it against accusations of being a stealth tax.
the faults of the Emissions Trading Scheme @ConHome bit.ly/xt6SzI