Monday, 1 November 2010

Why Are We Not Surprised?

The Return of Tetzel

Carbon credits. Actually this is a misnomer. It should be carbon "discredits" or "non-carbon credits" since carbon dioxide--the great lifegiving gas--the most "green" gas of all has been indicted not just as a pollutant but as a poison. It will kill the planet we are told. Ah, the madness of man when he sets himself up as ruler of all.

But Man is Lord, right? Nowadays, when virtually everyone, everywhere employs the nouns "lord" and "god" in profane speech, "good lording" this, and "oh my godding" that, they are really genuflecting before man as god and humanity as lord, since the vast majority of these profane speakers acknowledge no god or deity whatsoever. Man it is. Humanity is all that there is. We are on top of the vast evolutionary pyramid, lord and god of all we survey, we are constantly told. There is no being higher than Man. When Unbelievers take the words "god" and "lord" on their lips they are really invoking Man or Humanity or themselves in a nauseous, self-congratulatory arrogance. What else could secular humanists mean when they invoke a "god" and a "lord"?

It is part of the power and competence of deity to create, out of nothing, by a word. So, when Unbelief is faced with the self-diagnosed apocalypse of global warming which ostensibly threatens to attenuate or even destroy all life, watch the pretensions to deity emerge. By deploying an all-powerful law-word, mankind will declare carbon dioxide an evil to be got rid of. Not emitting carbon will have a nominal or notional value because the government says it will. That notional paper value can then be sold to concerns which use or emit carbon dioxide, as a permission or indulgence for their sins. The mere legislative act will create value out of nothing. The mighty secular humanist god will save the planet and the species.

It is no small co-incidence that this central-planning-by-legislative-fiat has gone down so well in the co-called "free world". Human freedom can only be sustained by societies which explicitly and effectually deny the sovereignty of man. But when a society begins to believe that man is god, inevitably governments begin to act oppressively and tyrannically. They want to plan and organise things. They inevitably move toward a command and control economy. Government begins to put on the garb and trappings of deity.

We have an abundance of historical evidence, if we needed it, to demonstrate repeatedly that centrally planned command economies fail. Passing laws and regulations trying to create something out of nothing do one thing, and one thing only. They impoverish everyone. With one exception. Those who are resourceful and smart enough to use "black market" tactics to exploit the system become fabulously wealthy. Artificially engendered, human-legislated shortages become an underground trader's gold-mine. Demand is strengthened, shortages increase, and prices and profits rise for those prepared to trade illicitly. The only thing that grows under a command-control economy is the black market. And, oh yes, crime and criminal gangs. 

So, the world has dabbled once again in command and control. This time it is an attempt to command and control carbon dioxide. The humanist deities have determined and decreed that we all need less of it, so by legislative fiat carbon dioxide can now be bought and sold, not actually, but artificially. It is a paper, notional good only. If someone buys a carbon credit, no material good is actually delivered to the factory forecourt. (It's rather hard to deliver "no carbon dioxide" after all.) This makes the carbon credit command and control scheme very different from synthetic financial instruments, such as futures and options. All those require, at the end of the day, delivery of actual goods, such as oil, or soya beans, or milk powder. But carbon credits, by their very nature, require no delivery of anything. It is simply a paper fiction, which the government has declared to have a certain value.

This system is a black marketeers paradise. It is an irresistible temptation to exploitation and fraud. It enables sharp operators to sit back and fleece the stupid gods. That is why the following report in the Sydney Morning Herald does not surprise us at all.
BRUSSELS: The European Commission is planning to clamp down on a €2 billion ($2.8 billion) carbon trading scam involving the deliberate production of greenhouse gases which the fraudulent manufacturers are then paid to destroy.

The Climate Change Commissioner, Connie Hedegaard, says the use of these carbon permits, from industrial gas projects in China, could be banned because of their ''total lack of environmental integrity''. Billions of euros worth of the controversial permits were used between 2008-09 in the European Union's emission trading scheme, in which companies must exchange pollution permits for emissions produced.

The scheme allows some of those permits to be bought in from developing countries. The most popular of these so-called offsets come from projects that destroy the greenhouse gas HFC-23, a byproduct of the manufacture of the refrigerant gas HCFC-22.

The Environmental Investigation Agency said in June that many Chinese chemical companies were manufacturing HCFC-22 primarily to earn money from destroying HFC-23, which can be five times the value of the refrigerant gas the plants are ostensibly set up to create. In 2008-9, 134 million permits (84 per cent) of offsets used in the scheme were from industrial gas projects in China and India, according to data from the carbon trading think tank Sandbag.

Buying this amount of permits in the scheme would cost €2 billion at today's prices. British companies used 7.6 million of these offsets in 2008-9, worth €116 million, instead of cutting emissions from their own operations.

The gas offsets have attracted criticism, with suggestions some plants exist only to earn money from the offset scheme. ''If you finance an HFC-23 project to reduce the equivalent of a tonne of carbon dioxide, it costs close to nothing,'' Ms Hedegaard said. ''Why should the Chinese put a stop to these projects if they get money for continuing to create HFC-23? Here we have a perverse incentive.''
You don't say, Connie. When men and governments are foolish enough to take to themselves attributes of deity, then a fool and his money are inevitably and quickly parted. The only responsible question left to ask is, How can we get in on this? Oh, that's right. We forgot. Hundreds of New Zealand farmers already have. They are being paid to let their farms go back to manuka and scrub--that is, do nothing and let their farms go to waste. It is more profitable, they say, than growing weed. But in this particular case, we are all the patsy. We, the citizens, are suffering the indignity of government expropriating our property and handing it over to indolent farmers. But you can't blame the farmers. They are just maximising their utility and exploiting a government created opportunity. While they sit on their decks and smoke wacky backy. The fool and his money are quickly parted. But in this case we are the fools.

However, there must be plenty of ways to rort the system. Let's get to it. We could become rich overnight. Let's create all sorts of carbon credits which those patsies in Europe are just desperate to buy. Money for jam. Medieval indulgences are back in fashion. On a grand international multi-billion scale. Watch the Tetzel's come out of the cockroach nests. How diverting!

No comments: