A Fool and His Folly Not Easily Parted

Unbelievable Rorts

Cap and Trade (and its associated carbon taxes) has to be the perfect example of a scheme thought up by the Mad Hatter. Everywhere you look, the naive government-planned schemes, created by legislative fiat, are in tatters. Recently, President Nicolas Sarkozy of France dumped his country's intended introduction of a carbon tax upon domestic energy and road fuels.

This, we believe, heralds the beginning of end of the cap-and-trade scheme in Europe--which is the only one functioning in the world of any significance. ("Functioning" we hasten to add is, in this case, a very generous description.) The German government had already backed right away: it has begun to experience the rorts implicit in the system. Sarkozy has just experienced a significant electoral defeat: knowing that the imposition of carbon tax would mean even more job losses and would threaten an ailing economy, he has pulled the plug on the Mad Hatter madness. (This, you remember, from the President who lectured the entire world on the vital global importance of cap-and-trade, and insisted upon the Euro-zone introducing a carbon tax throughout the region.)

Meanwhile, Christopher Booker, writing in the Telegraph, has documented the nefarious plans of WWF, one of the most notorious environmental groups, to rake in billions of dollars from the nascent global cap-and-trade rort. Now wonder they pushed to hard for its introduction.

The rort would have run like this: WWF would claim a remote (but vast) area of Amazonian rain forest as its special responsibility to protect as a carbon sink. This would have "generated"  billions of dollars worth of carbon credits, which would then be sold to polluters in Europe and elsewhere to enable them to continue emitting carbon dioxide. The upshot would have been that carbon output would have remained the same, but WWF would be incomparably richer. Booker writes:

If the world’s largest, richest environmental campaigning group, the WWF – formerly the World Wildlife Fund – announced that it was playing a leading role in a scheme to preserve an area of the Amazon rainforest twice the size of Switzerland, many people might applaud, thinking this was just the kind of cause the WWF was set up to promote. Amazonia has long been near the top of the list of the world’s environmental cconcerns, not just because it includes easily the largest and most bio-diverse area of rainforest on the planet, but because its billions of trees contain the world’s largest land-based store of CO2 – so any serious threat to the forest can be portrayed as a major contributor to global warming.


If it then emerged, however, that a hidden agenda of the scheme to preserve this chunk of the forest was to allow the WWF and its partners to share the selling of carbon credits worth $60 billion, to enable firms in the industrial world to carry on emitting CO2 just as before, more than a few eyebrows might be raised. The idea is that credits representing the CO2 locked into this particular area of jungle – so remote that it is not under any threat – should be sold on the international market, allowing thousands of companies in the developed world to buy their way out of having to restrict their carbon emissions. The net effect would simply be to make the WWF and its partners much richer while making no contribution to lowering overall CO2 emissions.

The conspiracy to defraud has now fallen apart. Copenhagen did not proceed--so international recognition and agreement to play by the Mad Hatter rules die not eventuate. Moreover, whilst Europe had already decided to exclude Brazilian rainforest from its own (now threatened) cap-and-trade mess, WWF was hoping that the US would pass its own cap-and-trade legislation, which in turn would have created an enormous demand for carbon credits, which, voila, WWF would have been able to supply, as the price ratcheted up and up, pulled by strong US demand. But, oh-so-sadly, the US has not passed cap-and-trade. It is stalled in the Senate.

Just as alarming to the WWF and its allies, who were hoping to make billions from Brazilian forests, has been the failure of the US Senate to approve the cap and trade bill championed by President Obama. Since the EU has excluded the rainforests from its own cap and trade scheme, bringing the US into the net is vital for the WWF’s hopes of finding “money growing on trees”. The price of carbon on the Chicago Climate Exchange has just plummeted to its lowest-ever level, 10 cents a ton.


The WWF’s dream has been thwarted – but the revelation that it could even be party to such a scheme may have considerable influence on the way this richest of all environmental campaigning groups is viewed by the world at large.

Meanwhile, NZ is going to be introducing its own cap-and-trade in July. There is no longer any justification for this, political, economic, social, global, scientific: nothing at all to justify our pathetic little small country going out on such a rotting limb. No justification, except the hubris and stubbornness of a Mad Hatter government, intent on doing damage to everyone, in the name of a utopian phantasmagoria.

Fonterra, the world's largest exporter of dairy products, has just announced that cap-and-trade will cost it and its shareholder-owners $25m over the next twelve months, rising annually thereafter. New Zealand has become the last and final refuge of the Mad Hatter.