Sunday, June 17, 2007


by Martin Rojko

When the EU officials, hardcore environmentalists and other global warming alarmists (similar to Nobel price nominee Al Gore) talk about „doing something“ about global warming, two ways are discussed. One is trading permits to emit carbon dioxide and other greenhouse gases. Second is taxing on carbon emissions from gasoline or electricity use. Both approaches are different in tools considered, but common in final result. If they cut something, it´s not for sure emissions but economic growth.

Some economists believe the best way to deter people from using carbon products is to tax them. Beside writting a treatment on detrimental effects of taxing for any „great and noble“purpose, one result is more than clear. High (Pigou) tax would burden the poor and hamper economic growth. Low tax would lead to probably zero emissions reductions.

The Kyoto protocol was signed in 1997. Participating countries (including EU) have made a serious commitment to cut emissions. Since this time they have in reality increased in every one of the EU-15. In fact, EU-15 emissions have been rising faster in percentage terms than in the USA (which is not bounded by Kyoto), where emissions have been going up about one point for every three points of economic growth. The U.S. Energy Information Agency estimates U.S. carbon-dioxide emissions dropped 1.3 percent in 2006. At the same time overall European emissions went up by more than 1 percent. This doesn´t bother politicians for just a minute as they continue in rhetoric exhibitionism of decreasing.

Emissions trading is not working. Evidence can be found not just in increasing emissions, but also in collapse of carbon price. Because of surplus of allocated permits the price fell from 30 eur in start of 2006 to 0,30 eur in these days. Post-communist countries has nowadays a large surplus of trading permits, which could be turn into cash by selling them to West European companies. This reality is well known in both West and East part of continent. And Belarus government know it also. Lukasenko´s regime had been refusing Kyoto for a long time untill the last year when emissions („hot air“) trading started.

The Newsweek magazine published the article on global earth cooling in 1975. It cited a few scientists warning against possible catastrophic results. It has taken more than 30 years till the Newsweek has admitted that it „has been considerably wrong in a short-time forecast.“ Stern´s sensational conclusions are condemned to the same act. But probably without his excuse.

Society functioning depends mostly on carbon nowadays. This substance can´t and won´t be substituted by swinging of magical stick in hands of politics which desire to handle a reality. If we need to do something about global warming, it is to shift from talking about forcibly reducing emissions and search for solutions compatible with market capitalism. A rich world will be better than one made poorer through overpriced carbon constraints. Only capitalism and freedom can help get us from carbon dependence.

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