The European Union set up an Emissions Trading Scheme as a market solution to deal with pollution. Pollution is of course, overwhelmingly generated by big business (‘market’) activities. Now the scheme has turned around to bite them.
As a result of the crisis, polluting companies have found themselves strapped for cash. So they’ve cashed in their carbon credits for short term readies.
Mark Lewis, carbon analyst at Deutsche Bank, explains: “(The ETS )was not designed to give corporate cheap short-term funding options in the face of a credit crunch meltdown where banks are not lending, but that appears to be what’s happening.”
The ETS scheme is ridiculous, and has been shown to be so. Business pollutes the planet, and contributes to global warming through carbon emissions, because it doesn’t cost them a penny. We pay for their noxious emissions, through our ill health and our deteriorating quality of life.
What should happen is that big business ought to be taken over and run in the interests of the working class. We would put a stop to emissions that threaten human life on the planet. Instead the EU gives polluting firms a permit. It accepts that they can carry on polluting. Firms can sell these firms to one another, so if a capitalist cuts emissions from his factory, he gets a reward. But of course the firm that buys the permit has the right to keep gushing out smoke. That is what they pay for.
Oscar Reyes, researcher with Carbon Trade Watch, adds: “The ETS has bowed to corporate self-interest at every stage of its design and implementation, so there is no surprise that it is now being used as a cash cow to see firms through a difficult financial phase.”
Cash strapped firms are dumping their permits just to claim the money. The result is that the ‘price’ of carbon emissions is collapsing, so it’s now cheaper for other firms to pollute.
There have been plenty of scandals in the past when credits have been given away and firms have been given credits that they did not need as a pure windfall. But the whole system is flawed, as everyone can now see.
The ‘market’ (capitalism) is not the solution to environmental degradation. It is the problem.