Thursday, July 20, 2006

Credit card carbon

According to the Daily Telegraph, UK Environment Secretary David Milliband has proposed carbon “smartcards” whereby people would have a set allowance of carbon which you would need to use (or buy more from others) to spend on energy, transport and well anything I guess. He doesn’t say anything, even though he should. After all, a tin of pineapples could well have used more energy in its production and transport than a drive to the shops.
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As usual, the analysis is one sided. Carbon dioxide emissions are bad and must be stopped. It isn’t asked WHY the emissions happen. You’re emitting carbon dioxide now, should you pay for that?
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Milliband says that people on low incomes would benefit because they could sell credits. Sell them to do what? They can’t have a car, or travel, or buy an appliance that uses energy. Marvellous – they might be able to buy a turnip. Then there are those buying them. What happens if it is your work that flies you overseas, does a company get credits or does work buy credits off of someone else, or use yours and if it can’t, can you not go inspect that project underway?
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For starters, it isn’t carbon per se, it is carbon dioxide, and that is not the only “greenhouse gas”. Methane is another significant one, but let’s not have the science get in the way of a great way for government to control what you buy.
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Secondly, who is going to value the “carbon content” of what you buy. What regulatory body will carbon rate shoes made in Indonesia (were they shipped or flown?), bread made in the local bakery (did they use gas or electric, do they get credits for selling products made using carbon like GST or is it double counted, so that the power generation carbon is paid by the power company, the bakery and the bread buyer?), Sky TV transmissions, or how about that bus when you’re the only passenger (do you pay marginal costs or total costs, will it vary per trip?).
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Thirdly, what happens to migrants and the new born. Do children get an allowance too, is it the same? Does it encourage people to breed (yay we can use the new kids carbon allowance to pay for the new car) which is hardly environmentally friendly? When do they get control of it, does everything you buy for someone else have to use your carbon credits or theirs, if yours does that mean the end of gift buying (Happy Birthday Mum, I bought you some plants because it’s the only thing I could get credit to come visit you in my car).
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Fourthly, what happens to exports and imports? Does it kill off exports because it would make them uncompetitive? Do imports get hit even though you may have no idea what carbon content there is for something made in Peru? Does it create a new class of smuggler?
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Fifthly, do people or companies undertaking activities that remove carbon dioxide (e.g. planting trees) get credits? If so, do inspectors come round and assess the value of your tree? Does it mean major companies will buy up forests en masse? Does it mean the government owning national parks has credits it can dish out to its friends or spend on things it likes doing? What if the government hasn’t enough, does it tax you some credits as well?
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Finally, do energy companies have to buy credits if they discover more hydrocarbons? If so, does it mean the hydrocarbon industry may as well give up now, what are the consequences for global wealth and income?
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You see it is part of the Green religious faith that the main problems in the world are transport and energy, ignoring that these are also two of the most fundamental pieces of infrastructure for civilisation to function. Without energy, it’s cold (or hot) and dark with little way for people to control their environment, without transport you are stuck with what you can get within walking distance. The “twin evils” are in fact what makes the world go round – unless you are living as a subsistence farmer in Africa, in which case you would dream about having such things. It might be nice if they stopped interfering in the energy and transport markets in ways that promote the retention of inefficient technology and practices - that might make a bit of a difference.

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