cap and trade versus a carbon tax

[ThePythonicCow]

Re: cap and trade versus a carbon tax

crony bankers vs inefficient bureaucrats.

Unfortunately, it's probably not one or the other, but rather both, one controlled by the other.

Free markets work well if there are sufficient ground rules to insure a relatively level playing field and sufficient competent referrees enforcing the rules who are not "interested" parties to the transactions. That's not what we have here.

[c1ue]

Re: cap and trade versus a carbon tax

I have a better explanation on how it will work.

1) Carbon credits are an artificial construct. This is important because there is no such thing as 'failure to deliver' and thus better even than CDS's

2) By law there is a forced market for them. The population of this forced market are not traders but rather are tradesmen types.

3) There is a limited supply via government fiat

4) Be part of the creation of the scheme so as to be in on the ground floor

Given these 4 important factors, there are a number of plays:

a) Buy up enough of the carbon credits to induce artificial demand. Since the tradesmen must have them to comply with the law, it is easy to model scenarios where spending 'x' amount to monopolize 'y'% of available credits yields 'Z' profits when prices go up 'XX'% or more

b) Induce enough volatility in the market that the tradesmen give up and hire you to manage their carbon credits for them. Job security baby

c) Create a market for derivative offerings: i.e. futures in carbon credits. Lots of trading potential and fee potential

d) Be part of the mechanism for distribution of said credits or 'smoothing' of prices. Fees forever as market maker.

e) Include a) and c) in your M & A work. I.e. under the right scenarios, buying up entire utilities or what not can be done to lever up carbon credit monopoly - or in turn induce carbon credit crashes. c) necessary for the latter.

There are indubitably many more targeting specific aspects once the market gets going.

[Starving Steve]

Re: cap and trade versus a carbon tax

"There is no way Goldman-Sachs doesn't make serious money out of this."

All I can say is this kind of legislation is what happens when you let radical environmentalists and outright eco-frauds take-over the Democratic Party in the U.S.

Where is the liberalism that the Democratic Party was supposed to be all about? And what does radical environmentalism, the junk science of man-made global warming, not to mention this gobbly-gook kind of cap-and-trade legislation have to do with liberalism?

Great to see that Helen Thomas, the old bull-dog reporter from half-a-century ago in Washington is now attacking the rather phoney news conferences that the Obama Administration is holding daily. She called the questioning, scripted.... She spoke-up this week at one of the administration's latest news conferences.

Meanwhile, the economy seems to be worsening. That may spell the end of Bernanke and eventually this whole bunch in Washington.

Why was Bush's man, Bernanke, kept at the Fed? That alone is an interesting question that no-one dares ask.... Maybe Helen Thomas, now approaching 90 years of age, will bring that question to one of the Obama Administration's heretofore scripted and managed new conferences?

[radon]

Re: cap and trade versus a carbon tax

There is no way Goldman doesn't make serious money on this.

I wonder if this doesn't have the potential to be abused and extended. It reminds me a bit of the interstate commerce clause. In the same way that it is hard to find something that cannot be bought or sold it is hard to find something that has nothing to do with carbon.

Seems like a good way to get for the banking cabal to get their foot in the door and expand their influence later. Now that banks are to be the new industry regulators are carbon credits going to be the new dollar? They always wanted a second currency anyway.

[ThePythonicCow]

Re: cap and trade versus a carbon tax

I wonder if this doesn't have the potential to be abused and extended. It reminds me a bit of the interstate commerce clause. In the same way that it is hard to find something that cannot be bought or sold it is hard to find something that has nothing to do with carbon.

Yes, this is definitely a concern. Us high carbon emitting cows are especially worried.

[santafe2]

Re: cap and trade versus a carbon tax

I have a better explanation on how it will work.

1) Carbon credits are an artificial construct. This is important because there is no such thing as 'failure to deliver' and thus better even than CDS's

2) By law there is a forced market for them. The population of this forced market are not traders but rather are tradesmen types.

3) There is a limited supply via government fiat

4) Be part of the creation of the scheme so as to be in on the ground floor

Given these 4 important factors, there are a number of plays:

a) Buy up enough of the carbon credits to induce artificial demand. Since the tradesmen must have them to comply with the law, it is easy to model scenarios where spending 'x' amount to monopolize 'y'% of available credits yields 'Z' profits when prices go up 'XX'% or more

b) Induce enough volatility in the market that the tradesmen give up and hire you to manage their carbon credits for them. Job security baby

c) Create a market for derivative offerings: i.e. futures in carbon credits. Lots of trading potential and fee potential

d) Be part of the mechanism for distribution of said credits or 'smoothing' of prices. Fees forever as market maker.

e) Include a) and c) in your M & A work. I.e. under the right scenarios, buying up entire utilities or what not can be done to lever up carbon credit monopoly - or in turn induce carbon credit crashes. c) necessary for the latter.

There are indubitably many more targeting specific aspects once the market gets going.

Excellent stuff c1ue. I'm not sure anything is better than a CDS if your uncle Hank has got you covered when your insurance company goes under but that's another topic. It's your outline for gaming the system that I found the most insightful.

[oshbo]

Re: cap and trade versus a carbon tax

Sheeple, listen up. Cap & trade is yet another example of a scam to take your money (property) and gain more control (power).

There has been no real debate or verdict on global warming, yet apparently everyone accepts the premise as fact? Shame on us.

[thedanimal]

Re: cap and trade versus a carbon tax

Sheeple, listen up. Cap & trade is yet another example of a scam to take your money (property) and gain more control (power).

There has been no real debate or verdict on global warming, yet apparently everyone accepts the premise as fact? Shame on us.

*yawn*

To say there has been no real debate indicates you haven't been paying attention.

[bill]

Re: cap and trade versus a carbon tax

A 100 yrs ago we had the opportunity to produce a carbon free economy, oil had other ideas. http://en.wikipedia.org/wiki/Nikola_Tesla
Now here we are with a policy of carbon reduction begging for a non carbon economy. My research over the last 5 yrs concludes we are about to change into a non oil/non carbon economy. In order to make such a economy change we continue to struggle with oils grip on today’s economy. Oil will be and has been over years a beneficiary of high oil prices. As we change over to a non carbon economy, oil wealth will make the transition and be a beneficiary of low/non carbon technology and energy. Oil will position itself to collect massive amounts of carbon tax flow from government in order to make the change over to a low carbon economy. The current legislation HR2454 will fail to deliver sufficient alternatives to make real change to a low carbon economy, it is designed as carbon tax revenue for government. This could go on for years as oil and government collects revenue as we make the change over to a low carbon economy. With massive revenue collections from oil and tax incentives, oil companies will begin to control more low carbon technology and implement it with help from government as necessary. Whom controls low/non carbon energy/technology extracts revenue globally for the next 100 years.

[radon]

Re: cap and trade versus a carbon tax

A 100 yrs ago we had the opportunity to produce a carbon free economy, oil had other ideas. http://en.wikipedia.org/wiki/Nikola_Tesla
Now here we are with a policy of carbon reduction begging for a non carbon economy. My research over the last 5 yrs concludes we are about to change into a non oil/non carbon economy. In order to make such a economy change we continue to struggle with oils grip on today’s economy. Oil will be and has been over years a beneficiary of high oil prices. As we change over to a non carbon economy, oil wealth will make the transition and be a beneficiary of low/non carbon technology and energy. Oil will position itself to collect massive amounts of carbon tax flow from government in order to make the change over to a low carbon economy. The current legislation HR2454 will fail to deliver sufficient alternatives to make real change to a low carbon economy, it is designed as carbon tax revenue for government. This could go on for years as oil and government collects revenue as we make the change over to a low carbon economy. With massive revenue collections from oil and tax incentives, oil companies will begin to control more low carbon technology and implement it with help from government as necessary. Whom controls low/non carbon energy/technology extracts revenue globally for the next 100 years.

Can you describe some of this research? What replaces petrochemicals in manufacturing and agriculture? What happened to coal?

If the current legislation will be ineffective at forcing companies into low carbon alternatives they won't bother until they are forced to by economics.

[cindykimlisa]

Re: cap and trade versus a carbon tax

Picked up this litttle gem from the EPA website

2009 and 2016 EPA Auction results for Cap and Trade type credits

Drum roll please

2016 winner is

JPM & Co.


Clean Air Markets

Recent Additions | Contact Us Search: All EPA This Area

• You are here: EPA Home
• Air & Radiation
• Clean Air Markets
• Allowance Trading
• Annual Auction
• 2009
• 2009 EPA Allowance Auction Results

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2009 EPA Allowance Auction Results

Allowances Available for Auction
Origin of Allowances	Spot Auction (First Usable in 2009)	7 Year Advance Auction (First Usable in 2016 )
EPA	125,000	125,000
Privately Offered	0	0
Total	125,000	125,000

Spot Auction Results
Allowances	Number of Bids	Number of Bidders	Bid Price
Bid For: 892,343	Successful: 18	Successful: 11	Highest: $500.00
Sold: 125,000	Unsuccessful: 59	Unsuccessful: 11	Clearing: $62.00 (the clearing price is the lowest price at which a successful bid was made)
	Total: 77	Total: 22	Lowest: $0.06
			Weighted Average of Winning Bids: $69.74

7 Year Advance Auction Results
Allowances	Number of Bids	Number of Bidders	Bid Price
Bid For: 624,916	Successful: 6	Successful: 6	Highest: $200.00
Sold: 125,000	Unsuccessful: 19	Unsuccessful: 9	Clearing: $6.63 (the clearing price is the lowest price at which a successful bid was made)
	Total: 25	Total: 15	Lowest: $1.03
			Weighted Average of Winning Bids: $6.65

Spot Auction Winners
Bidder's Name	Quantity	Percentage of Total Allowances	Amount Paid
Ohio Valley Electric Corporation	75,000	60.000	$5,414,500.00
EMMT	48,415	38.732	$3,181,730.00
Macquarie Cook Power Inc.	1,500	1.200	$98,295.00
Denver City Energy Associates	60	0.048	$18,000.00
Acid Rain Retirement Fund	10	0.008	$770.00
Green Country Energy, LLC	8	0.006	$2,928.00
M. M. Latham & Family	3	0.002	$225.00
University of Tampa Environmental Protection Coalition	1	0.001	$500.00
Society of Environmental Engineers	1	0.001	$400.00
Bates College Environmental Econ A	1	0.001	$85.76
Bates College Environmental Econ B	1	0.001	$73.01
TOTALS	125,000	100%	$8,717,506.77
7 Year Advance Auction Winners
Bidder's Name	Quantity	Percentage of Total Allowances	Amount Paid
JP Morgan Ventures Energy Corporation	124,984	99.987	$828,643.92
Green Country Energy, LLC	8	0.006	$1,328.00
University of Tampa Environmental Protection Coalition	3	0.002	$600.00
Rutgers Prep School Environmental Club	3	0.002	$495.00
Bates College Environmental Econ A	1	0.001	$40.65
Bates College Environmental Econ B	1	0.001	$32.28
TOTALS	125,000	100%	$831,139.85
		Total Auction Proceeds	$9,548,646.62

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Last updated on Tuesday, April 14th, 2009.
http://www.epa.gov/airmarkets/tradin...09summary.html
Print As-Is

[ThePythonicCow]

Re: cap and trade versus a carbon tax

There is a good (in my view) report on global warming and proper policy initiatives at A Rational Look at Climate Change Concerns and the Implications for U.S. Power Consumer.

It claims for example that if the United States shut down entirely all carbon emitting sources, including all gas and coal power, all gas and diesel trucks and cars, and so forth, we could make a few hundreth's of one degree difference over the next century. Sending America back to the pre-industrial age is not sufficient justification for such a minor difference.

What's worse, since a country like China emits perhaps four times as much CO2 for a given industrial output, simply forcing any manufacturing to move to China that hasn't already moved would quadruple human caused CO2.

What's even worse, the papers estimates of the cost of the "carbon credits" needed by a typical coal or gas electric power generating plant are roughly equal to the entire revenue of such plants ... not profit ... revenue. They would basically have to double the price they charge for electricity, so they could spend half their revenue on carbon credits. Many such plants that lack the financial flexibility and good management to make such a cost structure transition will go bankrupt.

These carbon credits are a screaming outrage!!

[TheServant]

Re: cap and trade versus a carbon tax

"Carbon credits are like taxing life itself."

Came across that phrase somewhere, perhaps even within iTulip. Thought it was rather fitting.

[santafe2]

Re: cap and trade versus a carbon tax

What's even worse, the papers estimates of the cost of the "carbon credits" needed by a typical coal or gas electric power generating plant are roughly equal to the entire revenue of such plants ... not profit ... revenue.

Cow, the guy is the CEO of a coal fired power plant. Of course he'd like to keep polluting without consequence. As US cap and trade is currently written, the cost is about 3 cents per kWh. The revenue stream for a coal fired power plant is closer to 8 cents a kWh. The revenue for a natural gas fired plant is 13-20 cents per kWh.

[ThePythonicCow]

Re: cap and trade versus a carbon tax

Cow, the guy is the CEO of a coal fired power plant. Of course he'd like to keep polluting without consequence.

I just won a private wager with myself. I expected that one of the first replies to my post would point this out.

Of course, anything a CEO of a coal fired plant says on this topic can be dismissed :rolleyes::rolleyes:.

I might have misprepresented the revenue streams, as I only read his article quickly. But he has a number of points regarding the global warming claims which are I believe valid. Of course, since he is the CEO of a coal fired plant, it would be a waste of your time to even consider his other points. :rolleyes:.

Is this what they call an ad hominem argument?