The Carbon Con-- All pain and no gain

From Andrew Bolt:

The carbon con: all pain and no gain

Monday, December 14, 2009 at 08:50am



A dramatic illustration of how the world-wide emissions trading scheme that Kevin Rudd wants from Copenhagen can just cost us jobs and money without cutting emissions by a single puff:

What is the connection between Dr Rajendra Pachauri, the ...chairman of the UN’s Intergovernmental Panel on Climate Change, and an Indian-owned steel company’s decision to mothball its giant Teesside steel works next month, ripping the heart out of the town of Redcar by putting 1,700 people out of work?…

In 1999, ... much of (Britain’s state-owned steel industry) was sold off to the Dutch firm Corus, which in 2007 was bought by the Indian giant, Tata Steel.

One of Corus’s prizes was the Redcar steel works, once Europe’s largest blast furnace. It is this which is now to be mothballed, according to Corus because of worldwide “over-production”. But this is transparently not the case, since its new owner, Tata, is planning to more than double its steel production in India over the next three years. Furthermore, only last month Corus announced plans to build a 20 million euro plant in the Netherlands, with the help of 15 million euros from the EU and 5 million euros from the Dutch government…

The real gain to Corus from stopping production at Redcar, however, is the saving it will make on its carbon allowances, allocated by the EU under its Emissions Trading Scheme (ETS). By ceasing to emit a potential six million tonnes of CO2 a year, Corus will benefit from carbon allowances which could soon, according to European Commission projections, be worth up to £600 million over the three years before current allocations expire.

But this is only half the story. In India, Corus’s owner, Tata, plans to increase steel production from 53 million tonnes to 124 million over the same period. By replacing inefficient old plants with new ones which emit only “European levels” of CO2, Tata could claim a further £600 million under the UN’s Clean Development Mechanism, which is operated by the UN Framework Convention on Climate Change – the organisers of the Copenhagen conference. Under this scheme, organisations in developed countries such as Britain… can buy the right to exceed their CO2 allocations from those in developing countries, such as India. The huge but hidden cost of these “carbon permits” will be passed on to all of us, notably through our electricity bills.

Thus, at the end of the day, Redcar will lose its biggest employer and one of the largest manufacturing plants left in Britain. Tata, having gained up to £1.2 billion from “carbon credits”, will get its new steel plants – while the net amount of CO2 emitted worldwide will not have been reduced a jot.

And the connection with Dr Pachauri? Directly there is no connection at all. But it just happens that Dr Pachauri’s other main job, apart from being chairman of the IPCC, is as director-general of the Tata Energy Research Institute, funded by Tata, which he has run since 1981.

Brilliant! This is the sort of lunacy the brightest minds on the planet are cooking up to fix a world which hasn't warmed since 1998.