From Recession To Depression? Think Green

[Annie]

Lawrence Solomon: Green market risk - FP Comment

...Think we have learned our lesson about creating artificial securities, divorced from the real world and highly leveraged, so volatile and inscrutable as to be capable of sending markets into even worse hells, and entire economies into real depressions?

Think again.

To the layers of confusion that now exist in our financial markets we are about to add another, as opaque and volatile as the others, and as unhinged from the real world — a carbon currency. President-elect Barack Obama wants it, Prime Minister Stephen Harper wants it and their European counterparts, to some extent, already have it.

Europe’s Emissions Trading System (ETS) is the world’s largest trading exchange for carbon dioxide and other greenhouse gases. If ambitious Kyoto-style plans come to fruition, ETS will morph to account for, among other things, the carbon content of all industrial and biological processes, and the carbon carrying capacity of all the real estate on our planet. Because carbon is a building block of life, and because we live in a carbon-based planet, carbon prices will become more ubiquitous than the U.S. dollar. It would become, in effect, a globally traded currency tied to gaseous commodities that until recently were nowhere traded.

What might this commodity-based currency be like? A week ago, the commodity traded on the ETS -- EU allowances of greenhouse gas emissions -- plummeted in value by 20%, after falling 20% three months earlier. This comes just two years after the ETS exchange had its first major collapse -- a 70% decline on rumours that some governments were about to give their industries extra emission rights, followed by even steeper declines that virtually wiped out the value of the allowances. Prior to the declines, the allowances had seen a steep climb in value....

 

[Neubarth]

The ETS is corrupt in concept and in practice.

Amazing what we come up with when laws and morals are lax.

 

[BaronVonBigmeat]

And now we see why there has been such a huge push in global warming hysteria in recent years. I have said before that Wall Street is licking it's chops over the prospect of trading carbon credits, while governments are lusting after a new gigantic source of revenue and control.

Yesterday I read something about an international currency conference among the world leaders, to be followed up with an announcement in January; I wonder if an international carbon currency is what they have in mind?

 

[Annie]

And now we see why there has been such a huge push in global warming hysteria in recent years. I have said before that Wall Street is licking it's chops over the prospect of trading carbon credits, while governments are lusting after a new gigantic source of revenue and control.

Yesterday I read something about an international currency conference among the world leaders, to be followed up with an announcement in January; I wonder if an international carbon currency is what they have in mind?

It would be a terrible idea under any circumstances, but to do this soon will lead to a depression.