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    Thursday, July 27, 2006

    EU Emissions Trading Scheme - Hot Air Money Machine

    In 1956, a young, glamorous Fabian intellectual, Anthony (Tony) Crosland published "The Future of Socialism" which was to become the Bible for the Labour Party post war revisionists.

    A central argument was not that the State owned - had legal title - but what mattered he argued was that it had Control.

    In an age of Privatised industry, global markets, where major sections of the economy are owned and operated from foreign boardrooms for purposes, that do not agree or are at odds with national political objectives ... there is a strong belief by the politicians and their Financial Puppet Meisters in the City, that this control is still possible.

    The Kyoto Protocols, the EU Emissions Trading Scheme is the most insane example of how the politicians vainly believe that by State or Supra State (EU) regulation this socialist nirvana is still acheivable.

    Nowhere has this been more in evidence than in the UK where guided by the preposterous notion that, the entire cause of global warming is anthropogenic, and therefore reversible - by act of human will - these dreamers, aided by the simpleton academics who cannot reliably forecast next weeks weather, have set about destroying the UK industrial base.

    It leads to the the sort of nonsesne spouted recently by Chris Rowland ( who left Dresdner Kleinwort Wasserstein in a huff) and has re-appeared at Ecofin a "Utilities investment company". He spoke at Environmental Finance Publications EU Emissions Trading conference in Brussels on 10th July.

    The EU Emissions Trading Scheme (ETS) he said (against the backdrop of the recent shambles in the market) will only succeed if there is increased competition on Europe's natural gas market.

    "If we don't get gas cpmpetition, we are in trouble" he said portentously as he had just noticed that the EU gas market relied on three sources of natural gas Norway, Algeria and Russia and was in the hands of very few companies (which will reduce dramatically within the next 2 years).

    In a hail of ersatz forecasts and models with insupportable assumptions he projects that if competition is not encouraged electricity prices are set to rise to Euros 70 Megawatt Hour (Implying an allocation cost of Euros(EUA) 50 per ton )- with increased competition it could be Euros 45/50 MWh and EUA at Euros 15/20 ton.

    Within ten years.

    But don't worry says this star crossed forecaster, having consulted his chicken entrails, says the 2003 Gas Directive will encourage more gas competition.

    This is the sort of BS these merchant bankers spew to maintain the beief that they may not own, but they can control by some ever increasingly complicated regulatory system, which the hard headed Russian/ Algerian / Norwegians will ignore and which an energy hungry world will learn to love.

    The same guys who saw the EUA price collapse 60% overnight (literally), didn't know why then and still can't agree why now.

    It is extraordinary that this whole EU ETS is based on this hot air and receives no criticism from any direction, yet your bank, pension provider, hedge fund, managed Fund, ISA scheme, is betting your future, and your hard earned cash on this house of cards.

    Open the Financial pages of your paper, look who pays for the advertising, funds the paper ... are the Press going to blow the whistle ? Can TV news, catering for those with an attention span of 35 seconds explain this whole charade, simply or easily?

    Who foisted this nonsense on the UK ? - Tony Blair and his henchwoman Margaret Beckett who has moved upward and onward to not understand Foreign Policy either.

    The answer. Simple. A straight energy tax on consumption - OK it's regressive, But it will rapidly force cuts in consumption, impact on energy saving - it doesn't cream off money to the City.

    Meanwhile Centrica have followed E.ON with another whopping price rise today - and the others will follow - result - the consumer gets screwed and the decisions about the future energy policy get shelved again - as the politicians discover ...that they have no control over the market whatsoever.


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