The fraudulent 'to big to fail' Carbon Ponzi scheme setup

[Letsbereal]

The fraudulent "to big to fail" Carbon Ponzi scheme setup (Lesson 1: How to steel big time?)
U.S. cap and trade plans risk European mistakes
15 May 2009, by Gerard Wynn and Pete Harrison - Analysis
http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE54E4EZ20090515?sp=true

LONDON/BRUSSELS (Reuters) - Plans by the United States to tackle climate change through a cap and trade scheme must learn from the mistakes of Europe if they are to avoid giving away multi-billion-dollar windfalls to industry.

American lawmakers are at the first stage of drafting a cap and trade scheme, in a larger climate bill which could transform how the United States produces its energy and boost the chances of agreeing a new ambitious global pact to fight climate change.

Fierce lobbying by industries and some legislators to dilute the impact on fuel bills, especially during a recession, could undermine carbon cuts, European analysts say.

"The U.S. debate is really U.S.-centered. There is so much focus on buying the 60 (Senate) votes needed, and each senator's vote that is bought comes with something attached, some type of concession for a sector or for trade unions," said Susanne Droge of the German Institute for International and Security Affairs.

The European Union scheme, launched in 2005, has struggled to shake off two early mistakes: handing out too many permits which removed the requirement to buy them, and giving them to power plants for free.

Analysts say utilities pass on the price of carbon permits to consumers regardless, making billions of euros (dollars) in windfall profits across the sector as a result.

And because there were initially too many permits the EU carbon price crashed to zero two years ago, relegating the first trading phase of the scheme from 2005-07 to an experiment.

As well as paying higher power prices under the EU scheme, industries such as metal makers, chemical plants and paper mills have their own carbon quotas, implying a double cost.

DRAFT

U.S. details are far from finalized in a process which needs approval of both houses of congress and is now only at committee stage.

The chairman of the Energy and Commerce Committee, Representative Henry Waxman, said on Thursday his panel would debate and pass the bill by the end of next week.

That would clear it for other panels to consider before a debate by the full House, probably by August.

The legislation faces more uncertainty in the Senate.

European academics implore lawmakers to resist the pressure of industry lobbyists, for example for free handouts.

So far the U.S. plans appear aware of the risks -- allocating free permits for example to the steel sector according to average emissions -- meaning if you pollute less you'll still get the same number of permits, and a surplus to sell as a reward for being clean.

The ruling Democrat plans would also avoid some of the risks of EU-style windfall profits, because in the electricity sector the permits would go to local distribution companies regulated by states which could limit how far utilities pass on costs.

"The difference between this and the EU is that they go to regulated entities that have to pass the value directly to consumers," said Tony Kreindler, spokesman for Environmental Defense Fund.

But not passing carbon costs to consumers could limit the incentive for them to trim electricity use and therefore emissions.

U.S. President Barack Obama had wanted all of the permits to be sold, but has indicated flexibility. Under the latest proposals, utilities would get free permits amounting to about 90 percent of their emissions initially.

Trade-vulnerable industries such as steel, cement and glass would also get a certain portion of free allowances.

"The whole point really is to try and set a carbon price which makes companies think carbon's going to be more costly, and the more free allowances you hand out the more diluted that signal is," said Michael Grubb, chief economist at the UK-funded Carbon Trust and chair of the Climate Strategies research group.

Another advantage of selling permits is that this raises cash for the public purse, relieving the need for carbon taxes.

But the U.S. plans may avoid a repeat of an EU-style price crash by allowing companies to "bank" surplus allowances for use through 2050, avoiding a glut in any one year, a U.S. analyst said.


(Additional reporting by Timothy Gardner in New York; writing by Gerard Wynn; editing by James Jukwey)

The fraudulent "to big to fail" Carbon Ponzi scheme setup (Lesson 1: How to steel big time?) http://tinyurl.com/qx338x

[Letsbereal]

Obama to Set New Vehicle Rules, First Carbon Limit (Update2)
18 May 2009, by John Hughes and Kim Chipman (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajTSTwOhpOfw&refer=worldwide

May 18 (Bloomberg) -- President Barack Obama will announce new vehicle-emission rules tomorrow, setting the first-ever nationwide limit on greenhouse-gas pollution from autos, said people familiar with the plan.

The move would force automakers to meet a fuel-economy standard for 2016 models of slightly less than 35.5 miles a gallon, a target Congress has said wouldn’t have to be met until 2020, according to one of the people, who asked not to be identified until the plan is made public.

The action is the “biggest single step to curb global warming” and mirrors California’s proposed standard to cut emissions 30 percent by 2016, Dan Becker, director of the environmental group Safe Climate Campaign, said in an interview.

The federal plan settles the question of whether states can set their own rules for regulating tailpipe emissions, granting the wish of automakers for a single, federal standard rather than what they call a patchwork of rules across the U.S.

“What the auto companies need is certainty,” said Roland Hwang, San Francisco-based vehicles policy director for the Natural Resources Defense Council, an environmental group. “The longer there is lack of clarity about whether there will be 14 states with the California program and what the stringency of greenhouse gas and fuel economy standards will be, the more difficult it is for them to make investments.”


2012 Models

The proposed federal rule would start with 2012 models, and the emissions regulation would be tailored to fit with fuel- economy standards already set by the Transportation Department, according to one of the people familiar with the plan. The standard for 2011 models is 27.3 mpg.

The Transportation Department would continue with plans to set differing requirements depending on the attributes of vehicles, such as size and weight, an approach that automakers back, according to the person.

The Washington-based Alliance of Automobile Manufacturers, whose members include General Motors Corp., Chrysler LLC, Ford Motor Co. and Toyota Motor Corp., didn’t immediately comment on the plan.

A law enacted by Congress in 2007 required automakers to raise fuel-economy standards by at least 40 percent, forcing them to hit a target of 35 mpg by 2020.

U.S.-based automakers would have to work hard to achieve the target sooner, said K.G. Duleep, managing director of consulting firm Energy & Environmental Analysis Inc. in Arlington, Virginia.


Eight-Year Cycle

The companies will have to redesign their vehicles faster than planned, “and that makes for a lot of expense because you can’t recoup the cost for whatever you’ve invested,” Duleep said.

California has been seeking a federal waiver to set a greenhouse-gas emissions standard under legislation signed into law by Republican Governor Arnold Schwarzenegger in 2004.

Former President George W. Bush turned down the waiver request, only to have Obama, during his first week in Office, direct the Environmental Protection Agency to reconsider the decision.

California still may need to get its waiver so the state could regulate emissions while the federal regulation is developed, Becker said.

To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net; John Hughes in Washington at jhughes5@bloomberg.net.


Obama to Set New Vehicle Rules, First Carbon Limit http://tinyurl.com/r5ahnm