The California Chamber of Commerce sued the state today in a last-minute protest against the historic "cap and trade" greenhouse gas auction set for Wednesday.
In a suit filed in Sacramento Superior Court, the chamber said the auction is really "an unconstitutional tax" on businesses that are affected by the state's global warming act, AB 32.
The suit doesn't seek an injunction blocking Wednesday's debut auction, and the California Air Resources Board, which is running the program, said it expects to proceed with the sale of carbon credits as scheduled.
Beginning Wednesday, the state of California will implement a “cap and trade” system designed to curb carbon emissions and cripple the state’s economy. Well, actually, it’s just designed to curb carbon emissions. Crippling the state economy is merely a nifty byproduct.
Now the Chamber of Commerce is suing the state, saying that the carbon trading system isn’t really a trading system – it’s a tax, unconstitutional under state law. Of course, they’re correct. The state claims that the cap and trade system, which regulates how much companies can emit unless they pay the state extra cash – sort of like environmental indulgences – is just a big regulatory fee. Except that the state creates the necessity for the auction, and punishes you if you don’t take part. The state is looking to raise some $500 million to $1 billion. Which will pay for the union employees across the state for a few weeks.
About 600 companies fall under cap and trade. Companies will spend millions to comply. And they’ll lay off employees, involuting the economy and destroying the tax base. Well done, Jerry Brown!
CA Implements Cap and Trade Tomorrow
Cap and trade is one of the main forms of emissions trading (the other is offsetting). Under cap and trade schemes, governments or intergovernmental bodies set an overall legal limit on greenhouse gas emissions in a certain time period (“a cap”) and then grant industries a certain number of licenses to pollute (“carbon permits” or “emissions allowances”). Companies that do not meet their cap can buy permits from others that have a surplus (“a trade”). In theory, this provides a cheap and efficient means to limit greenhouse gas reductions within an ever-tightening cap. In practice, it has rewarded major polluters with windfall profits, while undermining efforts to reduce pollution and achieve a more equitable and sustainable economy.
Some of the key problems with cap and trade are:.........................................
Cap and trade
Carbon trading can be a useful tool in reducing dangerous emissions. But voluntary emission reduction credits are unregulated and pose a threat to the entire system. World Finance investigates how rogue traders are taking advantage of investors
The FSA has been passively monitoring the situation for some time. An unregulated section of the carbon credit trading market has been raising red flags all over the country. The watchdog says it has received an abnormal number of carbon trading schemes that purport to sell environmentally friendly, certified carbon credits, but in reality might be selling little more than empty promises.
When the UN Clean Development Mechanism came into practice in 2005, as dictated by the Kyoto Protocol, carbon credits worked to reinforce targets for countries to reduce their emissions of greenhouse gases. The Kyoto Protocol rightly predicted that some countries would miss their targets while others would go beyond them, and that this would generate a high-value market for the surplus credits. Global emission targets are reduced over time, so that by 2020 they will be 21 percent lower than in 2001, according to the EU Emissions Trading System. Together with partners like the European Commission, the UN Kyoto Protocol signatories have been under close scrutiny as they trade or use up their carbon credits every year. These regulated credits are known as certified emission reductions (CERs). Trade is diligently monitored by the appropriate bodies, the UN and its partners like the EU ETS, and credits can only be bought or sold between countries. As such, credits generally maintain a high market value..............
Carbon trading in need of regulator attention
The world's only global system of carbon trading, designed to give poor countries access to new green technologies, has "essentially collapsed", jeopardising future flows of finance to the developing world.
Billions of dollars have been raised in the past seven years through the United Nations' system to set up greenhouse gas-cutting projects, such as windfarms and solar panels, in poor nations. But the failure of governments to provide firm guarantees to continue with the system beyond this year has raised serious concerns over whether it can survive.
A panel convened by the UN reported on Monday at a meeting in Bangkok that the system, known as the clean development mechanism (CDM), was in dire need of rescue. The panel warned that allowing the CDM to collapse would make it harder in future to raise finance to help developing countries cut carbon............
Global carbon trading system has 'essentially collapsed'