Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (54925)	10/26/2004 6:59:45 PM
From: Snowshoe	Read Replies (1) \| Respond to of 74559

>>Got to hand it to the Europeans<< Actually, the U.S. proposed the carbon-credit marketplace. We're the home of free market, supply side economics you know! But then Bush backed out of the deal, so Europe is stuck with it. Given all the distortions it causes, I'm sure there will be a series of "adjustments". And probably something akin to the Federal Reserve Board, run by a Eurocrat located in Brussels. With a governing board that sets annual atmospheric carbon percentage targets. With regular monthly reports that will have energy futures traders around the world poised at their terminals, waiting to unleash buy/sell orders based on the latest statistics. To meet the targets in an orderly fashion, I envision this board stepping into the market to buy or sell carbon credits. Just the way the Fed adjusts interest rates to control inflation. Big quarterly increase in atmospheric carbon? Wham! The board sucks up carbon credits, and it artificially gets more expensive to burn coal. So utilities switch more production from coal to gas. But wait a minute! Tommasso up in Alberta is burning huge amounts of gas to cook his tar sands. Because of the increased demand for gas, his costs just went up 10% so he has to cut the dividend payout on his Can-Roy. That's not all! Down in Illinois Ish can no longer afford the carbon credits to burn the coal to evaporate the water from his latest batch of corn ethanol. You can see where this is going... -Snow

To: energyplay who wrote (54925)	10/26/2004 7:01:09 PM
From: Taikun	Read Replies (1) \| Respond to of 74559

EP, Imagine your firm is a major with big CO2 output in, say, Germany. What you do is before any vote on Kyoto or greening you and your industry buddies (we won't use that word 'collusion') ramp up the cost of the carbon credits to show what a huge cost to industry Kyoto is. You show the numbers to the environmentalists who point and say that environmentalism works. You bemoan scrubbing technologies and contemplate layoffs and plant closures. Then, after the measure fails due to political pushback from your jurisdictions, you let prices settle down and pull your bids. Maybe you throw some more credits into the system that your environmental engineers unexpectedly turn up. Carbon credits traders...the future bond traders of the world. David EDIT: That is exactly what is being reported as happening. It is a new market, thinly traded, with even thinner regulation.