Monday, February 23, 2009

Carbon market now turning sub-prime: Al Gore & billionaire pals another case of 'too big to fail'

(Guardian UK, Glover, 2/23/09): "That there exists something called carbon trading is about all that most people know. A few know, too, that Europe has created carbon exchanges, and traders who buy and sell. Few but the professionals, however, know that

The theory sounded fine in the boom years, back when Nicholas Stern described climate change as "the biggest market failure in history" - a market failure to which carbon trading was meant to be a market solution. Instead, it's bolstering the business case for fossil fuels....

  • A year ago European governments allocated a limited number of carbon emission permits to their big polluters.

Businesses that reduce pollution are allowed to sell spare permits to ones that need more. As demand outstrips this capped supply, and the price of permits rises, an incentive grows to invest in green energy. Why buy costly permits to keep a coal plant running when you can put the cash into clean power instead?

All this only works as the carbon price lifts. As with 1924 Château Lafite or Damian Hirst's diamond skulls, scarcity and speculation create the value. If permits are cheap, and everyone has lots, the green incentive crashes into reverse.

  • As recession slashes output, companies pile up permits they don't need and sell them on. The price falls,

The result is a system that does nothing at all for climate change but a lot for the bottom lines of mega-polluters such as the steelmaker Corus: industrial assistance in camouflage.

"I don't know why industrials would miss this opportunity," said one trader last week. "They are using it to compensate for the tightening of credit and the slowdown, to pay for redundancies."

A lot of the blame lies with governments that signed up to carbon trading as a neat idea,

  • but then indulged polluters with luxurious quantities of permits.
  • The excuse was that growth would soon see them bumping against the ceiling.

Instead, exchanges are in meltdown: a tonne of carbon has dropped to about €8, down from last year's summer peak of €31 and

The lesson of the carbon slump, like the credit crunch, is that markets can be a conduit, but not a substitute,

They only work when properly primed and regulated.

  • and that if growth stops, demand drops too.

There is not much time to rescue the system.

  • Obama backs what Americans call cap and trade. Australia wants to try the same thing.

It should be at the heart of a deal at the Copenhagen summit this winter. But both are hesitating, given Europe's mess.

  • The market must be unashamedly rigged to force supply below demand. The obvious way would be to cut the number of permits in circulation, but in a recession no government will be brave enough to do that. And private initiatives such as Sandbag, which encourages individuals to buy and lock away permits, can exert little pressure on price in a market awash with them.

Europe can choke off tomorrow's supply, however, without hitting business today. First the EU must stop importing permits from countries such as Russia - a bonus for a paper transaction. No one really believes that 15m tonnes of imported permits will not still be emitted by a steelworks somewhere east of Novosibirsk.

Second, it must publish plans to crack down on the surplus of permits when the recession is over.

  • Warnings of famine ahead, when the scheme enters its third stage in 2012,
  • would raise prices now, if believed.
Like medieval pardoners handing out unlimited indulgences, governments have created a glut. Reformation must follow. Wanted - a modern Martin Luther to nail a shaming truth to industry's door: Europe's whizz-bang carbon market is turning sub-prime." via

Wednesday, February 11, 2009

'WE ARE ALL SOCIALISTS NOW'...Newsweek cover, Feb. 2009

Above, 2/16/2009 Newsweek cover

Following from Newsbusters, 2/11/09:

"This is a remarkable declaration from the liberal media. They disparaged the Republicans as they told the voters that Obama would install socialism, and then when he begins to do that, media elites say well, "we are all socialists now" any way and demand that conservatives get on the bandwagon of "reality" instead of trying to resist:
'If we fail to acknowledge the reality of the growing role of government in the economy, insisting instead on fighting 21st-century wars with 20th-century terms and tactics, then we are doomed to a fractious and unedifying debate. The sooner we understand where we truly stand, the sooner we can think more clearly about how to use government in today's world.'
Liberals are forever whining about being called liberals – lamenting "20th century terms and tactics." How is it that socialism is the 21st century vogue, and free markets are a vestige of the past? The obvious answer is the election returns (and the strong socialist flavor of our media establishment). That does not mean in a free society that conservatives can't try to reverse the vogue, just as it happened in 1980 and 1994.
  • It's cute to argue that since this latest phase of socialism started under a lame-duck Republican president, that the time for "unedifying debate" is over, and that somehow conservatives weren't resisting socialism then....
The only Newsweek cover that would be more obviously untrue would be
  • "We Are All Objective Journalists Now."" image



Sunday, February 01, 2009

'President Oxybarama,' per Spengler

1/22/09: "United States President Barack Obama "signaled a commitment to pragmatism not just as a governing strategy but as a basic value",
  • Washington bureau chief David Sanger.
Pragmatism, of course, is not a value, but rather the triumph of expediency over values. To call pragmatism a "basic value" is an oxymoron, a contradiction in terms, like "studied ignorance", or "impassioned apathy". Obama had plenty of that today, too.
  • "[Obama's] appearance on the Capitol steps was so historic that
  • the address became larger than its own language, more imbued with meaning than anything he could say,"
  • added (NY Times') Sanger,
which is to say that Obama said nothing memorable. Just what was historic?
was not imbued,
  • but rather hued, with significance.
  • His melanin carried the meaning, which is to say that
  • in a precise reversal of Martin Luther King Jr's famous phrase.
America's African Americans,
  • hailed this carpetbagger as a savior.
For a generation of white liberals raised on the notion that skin-color aversion is the original sin of American politics, the confusion is understandable.
  • The African Americans in attendance should have known better. In a way, they did.
  • If not for Aretha Franklin, the day would have been a total loss.
Words failed not only Obama, as Sanger noted, but his preacher and poetess as well. The Reverend Joseph Lowery, an old civil rights campaigner of Martin Luther King's generation, concluded his benediction with a jingle: " ... help us work for that day when black will not be asked to give back, when brown can stick around, when yellow will be mellow, when the red man can get ahead, man, and when white will embrace what is right." There was depth in Lowery's triviality....

It just wasn't their day. I mean that literally: it was a day on which
  • a dark-skinned man became president who had nothing to do with them.
  • The son of a Kenyan economist and an American anthropologist walked off with
  • the blood-stained mantle of seven decades of civil rights struggle.
If the black poets and clergy offered a counterfeit of real emotion, it is hard to blame them. They were just the extras on Obama's stage set.
  • Oxybarama's inauguration has been compared to John F Kennedy's, when the 87-year-old poet Robert Frost recited The Gift Outright. ... It is not one of the great poems in the language, but it is classical in construction, Biblical in evocation, and beautifully turned out.... Sadly, Yale University's Alexander measures up to Frost
  • about as well as Obama measures up to John F Kennedy.
When Kennedy warned that Americans would bear any burden and pay any price in the cause of freedom, he faced a ruthless and powerful contender in the Soviet Union, whose power still was ascending. Obama observes that "our power alone cannot protect us" (something else than power is supposed to protect the United States?). He added oxymoronically that "our power grows through its prudent use", and through "the tempering qualities of humility and restraint".
Obama's America is everything to everyone, and nothing to anyone.
  • Where Frost evoked a land that had yet to possess a people yet to be born through sacrifice, Obama's America is "Here Comes Everybody": "For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth."
It is one thing to include everyone in America, but quite another to think of the country as a "patchwork"
  • rather than as a land to whom many belonged before they were adopted into it, the sense of its national motto, E Pluribus Unum ( Out of Many, One).
There is no "there" in Obama's address.
  • Instead, there are nods in so many directions that the compass needle spins.
  • Oxymorons abound because Obama is struggling to hold together so many disparate elements that their incompatibility pops to the surface now and again.
We fear at every moment that he will fly apart like the inventor Coppelius' dancing doll of E T A Hoffman's story. " by Spengler from Asia Times, 1/22/09