The Wall Street Journal editorializes here on the crisis gripping the EU’s cap-and-trade scheme in the wake of the EU parliament’s rejection of an attempt to further rig this bogus market. The editorial concludes as follows:
This failed political intervention also gives the lie to the claim that cap and trade is a "market solution" to climate change. Proponents only like the market in permits when it keeps carbon emissions prices high. Cap and trade is an attempt to use brute political force to limit the supply of carbon energy.
All of which vindicates the Bush Administration and others who opposed cap and trade in the Kyoto Protocol. Aided by Al Gore, Europe tried to turn cap and trade into a global policy. The hot air started to go out of Kyoto after its early backers refused to implement job-killing legislation to meet emissions targets. It lost further support when it became clear that financial firms were gaming the system.
With the U.S. shale fracking revolution, it's now clear that the fastest way to reduce greenhouse gases is to let private drillers expand natural gas production. When even Europe recognizes the folly of artificially raising energy prices, the anticarbon obsessives have lost in their own climate-change temple.
Sadly, the Journal is too optimistic. Not all of “Europe” sees things that way. Writing in the Sunday Telegraph, Christopher Booker explains what’s going on in the UK:
Events last week again highlighted how ludicrously Britain’s energy policy is going off the rails. The first was a shock vote in the European Parliament, carried by Tory MEPs in defiance of David Cameron’s orders, further exposing a massive miscalculation by [Chancellor of the Exchequer] George Osborne that puts British industry at a huge disadvantage against its European competitors and will eventually double the bill we all pay for electricity.
On Tuesday, by just 19 votes, MEPs threw out a European Commission bid to save the EU’s Emissions Trading System (ETS), the world’s largest “carbon market”, which since 2005 has forced electricity users to pay hundreds of billions of pounds for the carbon dioxide they emit. When, back in 2010, Mr Osborne announced that, on top of this, Britain’s electricity companies would, from this month, have to pay an additional “carbon tax”, increasing the cost of emissions to a “floor price” of £16 a ton, rising to £70 by 2030, he assumed that the ETS price would also be racing upwards. So the additional cost of his “carbon tax” would not be very great.
Since then, however, the ETS market has collapsed. Last Tuesday’s vote, just after Mr Osborne’s tax had come into force, sent the price per ton plummeting to a record low of just £2.25, meaning that Britain’s electricity users must now pay far more for “carbon emissions” than anyone else in Europe. And this is a gap due to widen rapidly, to nearly £30 by 2020 and £70 thereafter. On the basis of the CO2 emitted by Britain’s coal- and gas-fired power stations, this alone will eventually almost double our electricity bills.
So what is the Government’s game in imposing such a crippling tax on those fossil-fuel power stations that currently provide more than two thirds of our electricity? According to the verbiage emitted by the Government, it is to incentivise a massive switch to “low carbon” energy sources, such as wind farms and nuclear power.
But these are already so much more expensive than energy from fossil fuels that no one would build them without colossal subsidies. The French state-owned company EDF insists that it will only build two nuclear reactors in Somerset if it is guaranteed nearly double the current market price for their electricity. The only reason largely foreign-owned firms are pouring billions into the 32,000 wind turbines the Government wants to see built is that they are given subsidies that almost double – in the case of offshore wind, treble – the price of the power they so unreliably generate.
And now, as last week’s other piece of news, we also learn that the German-owned nPower has paid no corporation tax at all on its recent £766 million profits in the UK, because all this can be offset against the money they are shoveling into wind farms to milk that ever-rising flood of subsidies.
So, in every direction, the rest of us must pay to support a policy designed to double our bills and drive millions more households into fuel poverty. And all this supposedly to “save the planet”, when, as [Tory MP] Peter Lilley pointed out in a superb speech in Westminster Hall on Thursday, the increase in China’s CO2 emissions alone in 2011 was 200 million tons more than the total emitted by the UK. As Mr Lilley reminded his fellow MPs, locked in their sad little bubble of make-believe, “those whom the gods wish to destroy, they first make mad”.