Rewarding Polluters to Pollute
The European Trading Emissions Scheme (ETS) was designed by a rather unintelligent bunch of European bureaucrats back in 2005 with the intention to discourage green-house gases and furthermore encourage cleaner energy forms. However, it has done the opposite, it has rewarded polluters rather than punishing them. It has been about as useful as pockets in your underpants.
The ETS covers five main industries and with those five industries there were 13,000 factories or businesses that were considered serial polluters – the ones that have no morals when it comes to big smoke stacks with lots and lots of black smoke. These polluters were given pollution trading vouchers, like Myer’s vouchers, except you can sell them to others factories that want to do some more polluting. Business that wanted to do more polluting had to buy some vouchers from the 13,000 polluters. Illogical you might say, as the pollution is only traded from one polluter to another. But it gets worse, the 13,000 polluters can also buy vouchers from a large number of developing countries and then continue to pollute in the same way they polluted before. Based on the Koyoto treaty, the Clean Development Mechanism (CDM) was established. Developing countries, when they have approval from the UN, they can sell their pollution vouchers to EU companies.
Here’s how the polluters are rewarded. One of the 13,000 polluters lowers it’s pollution levels and passes the cost on the consumer. Our EU polluter then sell the vouchers to another EU company for $90 a tonne (the ETS is measured in tonnes of pollution). Because our developing country maybe in the process of getting approval or the ETS voucher is more easily available at a cheaper price - our EU polluter will be able to buy the same voucher as low as $45 a tonne. Hence by buying cheap CDM’s , our EU company can go back to polluting, pass on extra cost to the consumer and keep the $45 profit per tonne on the voucher they got for free for being a chronic polluter. Only a lunatic would think of a more stupid scheme!!
The ETS covers five main industries and with those five industries there were 13,000 factories or businesses that were considered serial polluters – the ones that have no morals when it comes to big smoke stacks with lots and lots of black smoke. These polluters were given pollution trading vouchers, like Myer’s vouchers, except you can sell them to others factories that want to do some more polluting. Business that wanted to do more polluting had to buy some vouchers from the 13,000 polluters. Illogical you might say, as the pollution is only traded from one polluter to another. But it gets worse, the 13,000 polluters can also buy vouchers from a large number of developing countries and then continue to pollute in the same way they polluted before. Based on the Koyoto treaty, the Clean Development Mechanism (CDM) was established. Developing countries, when they have approval from the UN, they can sell their pollution vouchers to EU companies.
Here’s how the polluters are rewarded. One of the 13,000 polluters lowers it’s pollution levels and passes the cost on the consumer. Our EU polluter then sell the vouchers to another EU company for $90 a tonne (the ETS is measured in tonnes of pollution). Because our developing country maybe in the process of getting approval or the ETS voucher is more easily available at a cheaper price - our EU polluter will be able to buy the same voucher as low as $45 a tonne. Hence by buying cheap CDM’s , our EU company can go back to polluting, pass on extra cost to the consumer and keep the $45 profit per tonne on the voucher they got for free for being a chronic polluter. Only a lunatic would think of a more stupid scheme!!
