Wednesday, October 15, 2008

Getting Rid Of CO2 Costs Money So We Will Keep It


There are a lot of people who are happy to spend your money on "saving the world." The decade of the 90s were the golden years for the global warming brigands. But, increasingly, during this decade the scientific evidence has been accumulating that the "unstoppable global warming" was little more than another climate oscillation caused by a convergence of factors from solar activity to ocean currents... and had little to do with carbon dioxide.

Still, politicians are willing to spend your money to... ostensibly... save the planet, but in reality to have a political platform to power. In Europe, that is changing. We can only hope that will change here as well.

From the Guardian:
EU climate pact in crisis ahead of summit

• Friction over methods to meet agreed targets
• Sarkozy proposals face UK and German opposition

French attempts to craft a global warming pact to make the EU a world leader in tackling climate change are gridlocked, with governments unable to agree on how to share the pain and costs of slashing greenhouse gases by 20% within 12 years.

A European summit tonight in Brussels will fail to agree on the means to the end of meeting the EU's ambitious targets, warned diplomats and officials.

The deal has to be struck by the end of the year for the package, which was agreed unanimously by European governments 18 months ago, to become European law.

But senior officials and diplomats doubt whether that will be possible despite the fanfare that accompanied the unveiling of the policy last year.

"The targets have been agreed and we have presented them all over the world," said José Manuel Barroso, the European Commission chief. "There will be a real problem of credibility for Europe."

He added: "Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis."

Nicolas Sarkozy, France's president and current EU president, has been told that his proposals for tonight's summit have no chance of being supported, with some of the 27 countries arguing that the financial crisis means that the Europeans can no longer afford the huge costs entailed.

"In this difficult situation, it's only natural that governments become more defensive and prudent," the European Commission chief said.

On Monday, Franco Frattini, the Italian foreign minister, told a meeting of his European counterparts that, with Europe heading into recession, the entire complex package should be renegotiated.

The foreign secretary, David Miliband, opposed the Italian demands, arguing that if Europe was grappling with the credit crunch, it also was confronting a "resource crunch" that made the climate change package all the more urgent.

But while British ministers say they support the plan, they are also trying to water down some of its key provisions. The energy and climate change secretary, the foreign secretary's brother, Ed Miliband, last week failed to get the rest of the EU to exempt the aviation sector from a central element of the climate change package - that which obliges Europe to obtain 20% of its energy mix from renewable sources by the 2020 deadline.

Sarkozy's effort to build a consensus has already seen him scale back his ambitions, according to sources. But he has still encountered a wall of insuperable opposition on several fronts.

The heart of the plan is the so-called emissions trading scheme which forces European industries to buy permits to pollute, encouraging them to save money by becoming cleaner.

But amid furious objections, particularly from Germany, Sarkozy has proposed that especially energy-intensive industries such as the steel, aluminium and cement sectors be awarded their pollution permits for free to prevent them abandoning Europe and moving their business elsewhere. Britain and others reject the blanket exemption for these sectors.

However, there is also widespread concern that Europe will simply export jobs and businesses without making any difference to carbon dioxide emissions.

HT Benny Peiser:


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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)