Friday, June 01, 2007

Emission Admissions

It’s almost humorous to hear the campaign pitches of some of the presidential wannabe’s on the trail. Sen. John Edwards is the latest to reveal in public his lack of understanding of basic economics, and in particular how the energy industry works, calling for an investigation of Big Oil for an answer to high gasoline prices.

Quick—what’s an eight letter synonym for politician?

Edwards is playing to the crowd, like any good politican, and ignoring some fundamentals of supply and demand…and a history of 20-such investigations of Big Oil in the past.
These politically-motivated witch hunts have yielded only proof and more proof that the government is the biggest factor in raising gasoline prices, thanks to onerous restrictions, regulations, and creation of an environment not conducive to building additional refinery capacity in the US.

It's ironic, don't you think, that one environment is not conducive to another?

President Bush, with deep roots in the "awl bidness," is now doing an about-face with his stand on the theory of Global Warming…calling for emission-reduction goals for industrialized nations—a topic to be discussed at the upcoming G8 Summit. This has boosted Carbon Credits trading in Europe…

Regardless of where you stand on the whole Global Warming theory thing (I am not convinced, for the record--how arrogant of mankind to presume to have the power to alter the global balances of hydrological, meteorological, and photosynthetic cycles), there is money that can be made from the friction this issue is creating:
A classic example of this is the emerging marketplace for Carbon Emission permits. In reality, carbon permits--which give companies license to spew into the air what they've been belching all along--are an artificial answer to an organic problem. The question of cleaner emissions is solved mechanically, not politically.

But the other reality is that these ecological farces are here to stay, and can be traded for fun and profits. The European Climate Exchange, which trades such permits, got a nice 3.9% boost by President Bush's remarks yesterday. Permits hit nearly 24-euros/ton after he said he was willing to reign-in US industry in order to lower carbon emissions.

The supreme irony would be if he was only blowing smoke.

No comments: