I'm puzzled that there hasn't been more objection to the EC's plans to give away ("grandfather") carbon emission permits to existing polluters (mainly coal-fired power generators). Apart from a WWF-commissioned report in April which pointed out that this will be a 60 billion euro windfall to the polluters, I can't find any sign that European environmentalists realise how much of a scandal this is.
The economic argument here is that polluters will simply cut their output and sell off some of their free permits until the price of the permits and the marginal cost of lost output come into balance. To put it another way, polluters can cover the cost of emission permits by raising their prices, and the ability to sell off unused permits is a pure windfall.
Another way to think about it is that paying for emission permits is like paying rent for use (or abuse) of the atmosphere - this rent should go to the owners of the atmosphere. In the US this idea has been worked up as a detailed policy proposal called Sky Trust or cap-and-dividend: anyone bringing fossil fuel into the economy should have to buy emission permits, and the proceeds should be distributed equally to each citizen. More details at
http://www.capanddividend.org/
Campaigning on this could be a vote-winner for whichever party takes it up first: it would be a sort of poll tax in reverse, in which everyone would get a thousand euros or so, and the heaviest users of fossil fuel energy would pay the most. The French would come off best. With enough pressure, the EC could be forced into a U-turn.
I'd be interested to hear if anyone is interested in trying to get this on the political agenda either at national or European level..
The EU Emissions Trading Scheme : Total Compromise !
The European Union Emissions Trading Scheme has been dogged by compromise from the beginning, responding to continued pressure from - guess who - large companies and their lobbying groups.
The only reason that "grandfathering" was allowed was to keep the big Point Emitters quiet. Their argument was : "if we're going to have to operate under a Carbon Cap (their part of the National Allocation), then there's NO WAY we're going to pay for the Quotas. We're going to be losing business, so we're going to be losing profit : at least we should have the right to have the Carbon Permits free."
Another one of the big compromises has been that the National Allocations Plans have been set too high : countries, speaking on behalf of their business lobbyists, have campaigned for Carbon Caps that are higher than their emissions. Cute.
The next major part of the total compromise is that the Energy companies have been jacking up their prices to customers on the basis of a "virtual" cost of the Carbon Permits - in other words - protecting their price regimes into the future. In the future they will have to pay for at least some of their Carbon Permits - and they'll naturally have to unburden those costs onto the consumers, so they're getting started with their price increases in now.
WWF are not the only group to have reported on this : FEASTA and the nef have made big shakes about it :-
http://www.feasta.org
http://www.neweconomics.org
Cap-and-Dividend is not the only alternative. There's also Cap-and-Share that might even get to go on Transport in Ireland :-
http://www.capandshare.org
http://en.wikipedia.org/wiki/Cap_and_Share
cap and share
jo - cap and share is identical to cap and dividend but the FEASTA campaign proposes applying it only to transport - they take it for granted that the EU emissions trading scheme, which excludes transport, will go ahead with grandfathering till 2012. Can't this be stopped? we still campaign against the biofuels directive, even though it's already implemented.
I think this is worth campaigning on because the ETS means that consumers will be paying more for their electricity anyway (unless the cost of permits falls to zero). The cap-and-dividend campaign can focus simply on who gets the money from selling the permits. A campaign to increase the cost of transport fuel (which is what FEASTA proposes) is unrealistic at the moment - better to focus on upgrading the railways. .
Grandfathering and the ETS
In the next phases of the ETS they are going to phase out grandfathering. The EU commission intervened to try to save the ETS from being such a total disaster it would undermine the whole carbon trading idea for ever more (which wouldn't have been a bad thing in my opinion), so they are going to tighten it up a bit, and it might start achieving something rather than nothing. Grandfathering was a total scandal, it was really just a massive bribe to get the corporations to agree to the whole thing.
I have many problems with carbon trading, but one of them is just the extent to which it undermines the public understanding of climate change and energy issues. Although the physical energy stuff is complex, people who want to can get a grip on it, and energy is not a totally alien concept. But the bureaucracy of carbon trading is so complicated and confusing and all in business language that it is working to totally exclude and confuse the public.