The more I learn about cap and trade the less impressed I become. Objective reality says we need to reverse the process of carbon exhumation, but the political reality in America today says something far different. Instead of creating and collecting a tax, which our government has a long and glorious history of doing fairly well, we’re going to let the Goddamn Swindlers be the house for the Climate Change Casino, trying to blow the last, greatest bubble before our civilization implodes.
There is some case to be made for some sort of trading system as this could be used to engineer a flow of funds from existing, entrenched polluters to clean running innovators, but our government needs revenues rather than another poorly understood synthetic market, and there are other means that could accomplish the changes envisioned with cap and trade that don’t enable further shenanigans from Wall Street.
Let me say this right up front – I have some operational hopes that we’ll see renewable ammonia in use as both fertilizer and fuel, but this is more likely to happen in Cascadia, the Republic of Lakota , the Great Lakes Compact, or in a new, greatly enlarged incarnation of the Republic of Vermont rather than in an intact United States. The southwest I expect to see in disorder due to climate change and friction between Caucasian and Hispanic America, while the southeast seems on track to form the breakaway Republic of Redneckistan any minute. No civilization survives the loss of its resource base and these divisions post collapse seem sensible if you examine the cultural and environmental foundations of the various regions of the U.S.
Goddamn Swindlers had a large hand in the end of the United States’ empire. The deregulation of the banking sector a decade ago set off the same dynamic that brought us the Great Depression, but computers and globalization allowed a truly towering Ponzi scheme with them taxing with their right hand each and every stock transaction through the criminal magic of front running while the left hand sliced, diced, and fluffed junk debt, slathered on a AAA rating, and forever beggared the American taxpayers with the fallout of this scam.
We have three trillion dollars in debt that is going to have to be serviced. We have a strategic need to get ourselves and the global economy free of the fossil carbon exhumation craze while paying down this burden. This is a mess on many levels. China owns 24% of our debt, Japan 21%, and the oil exporting states come in a distant third with 6%. Each has a different opinion on what is best and our military might does the same thing for us that having a shotgun does for a homeowner facing eviction and a sheriff’s sale. We’re a neutered, collapsing empire and we’re going to have to swallow a tremendous dose of multilateral decision making.
Getting honest about the condition of our banking sector is the only way we get better internally, but doing so would require admitting that they’re collectively bankrupt, that fuels the deflationary cycle, and that’ll slosh over on to the value of our sovereign debt. One of these days soon all the smoke and mirrors in the world won’t be able to hide it, then we see the mother of all yard sales with our creditors descending to buy what they can with our shaky sovereign debt.
The only financial solution to the scenario I describe is another bubble – and there are the usual suspects, fattened first on the epic fraud of securitization, then fattened again on taxpayers providing welfare for Wall Street in the form of the mismanaged and misapplied TARP program, standing ready for one more shot at raiding America’s collective balance sheet before it all comes apart like a soup cracker in a sandstorm.
There is, of course, a plausible explanation for what cap and trade is supposed to do, but do you trust the front running welfare queens at Goldman Sachs to handle this in a forward looking, civic minded fashion, or will they make a mess in the second quarter of any given year for the sake of obscene, fraudulent profit in the first? That seems to be a trend with them.
Burgundy over at The Oil Drum describes our three sided trap of economy, energy, and environment as the Triumvirate of Collapse. It seems like we can’t solve for any one without making the other two worse, and the implication is that our 70% consumption based economy using 2kw of electricity and 35% of the global oil supply isn’t going to survive. Yes, I mean 35% - 25% directly within our borders with the gutting and offshoring of American manufacturing means another 10% of the global oil supply is being used elsewhere to feed our consumption.
The game changed today with the International Energy Agency pretty much admitting that peak oil is right here, right now.
In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.
Those who pay attention to environmental issues have probably already caught Kossack billlaurelMD’s ongoing coverage of the cryosphere. Prognostication in this area comes thick and fast. Consensus? Climate change is right here, right now, and it’s bigger, badder, and hairier than anyone predicted five years ago. That, like Wall Street’s penchant for private profits and socialized losses, is a firm and expanding trend.
A solution to the Triumvirate of Collapse is the great mystery of our time. As a famous fellow once said, It is a riddle, wrapped in a mystery, inside an enigma; I don’t think Goddamn Swindlers’ sticky paws on the tiller are part of the answer. A market might be a fix, but it seems we’re incapable of producing and regulating one that isn’t corrupt; doing so in this arena at this time is throwing dice with our children’s future.
I’d place a lot more trust in Dr. Stephen Chu and the Department of Energy’s grant program to drive the basic innovations needed for us to turn the corner on fossil fuel depletion and climate change, with a strengthened Environmental Protection Agency regulating carbon dioxide emissions and turning that activity into a federal tax revenue stream.