Hi Oliver and CRISIS FORUM,

What annoys me is that Oliver Tickell has jumped into the fray without pausing to consider that his arguments may already have been used and refused by people working on the issue of Carbon control for several decades. If he were to look back, into the annals of evolving Climate Change policy, he will find that the idea of Auctioning Carbon Permits to the Carbon-wealthy has been diagnosed as quite probably leading to great inequalities within and between nations, exacerbating the problems that Climate Change poses, and risking emissions growth in countries and areas without "conventional" Fossil Fuel resources.

Here are more of my comments on my second in-depth reading of Kyoto2 below. As you can see, it's pushing my neurons and causing multiple explosions at the synapses. I've SEEN IT ALL BEFORE, and it's firing strong memories of how proposals such as Kyoto2 are ALL WRONG.

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Comments on a Second Reading of Kyoto2
by Jo Abbess
14th August 2008

PART 4

CHAPTER 3

page 68
-->   "the tragedy of the unregulated commons" : exactly the point.

page 70
-->   "we are locked into a system of 'fouling our own nest' " : that is not strictly accurate. Most individuals are quite careful about their wastes. It is in fact only a small proportion, often the profit-making proportion of social entities that make foul waste.

-->   "the tragedy of the commons as a cesspool must be prevented by...coercive laws or taxing devices that make it cheaper for the polluter to treat his pollutants than to discharge them untreated..." One of the outstanding problems with this concept is related to the Laws of Physics : there are some production and manufacture and trade processes that cannot be cleaned up, no matter how much money you put into them (Nuclear Power perhaps being one of them). Some forms of Energy production need to be closed down : coal, if there is no significant advance in Carbon Capture and Storage, being one of them. Some chemicals, for which we have the Montreal Protocol, are totally banned from production. In come cases, it's not a question of mopping up Carbon emissions, it's a case of cease and desist, which would clearly be cheaper than emitting, but would lose the profits of the business. So guess what happens ? Some production goes on regardless, for nobody can ever pay enough to make it cleaner.

page 71
-->   "elegantly" : yes, and eloquently.

-->   "[Aubrey Meyer and Nicholas Hildyard] rather than setting out the many possible approaches to managing the atmospheric commons to achieve their desired objectives, they leap immediately to their solution:" No, there were years and round after round of discussions regarding the Contraction and Convergence C&C Framework proposal before the core principles were codified and agreed. Also, you have failed to understand a key point about C&C : it's a framework, not a mechanism to achieve a goal. C&C aims to set the goalposts fairly and squarely, measuring up both problem and solution, taking into account the necessity for global participation, taking into account the demands for equal treatment by all in the negotiations, taking into account the scientific boundaries for an acceptable response on Greenhouse Gas emissions. Corporate Energy and Corporate Chemistry would like to carry on burning in remote sites away from public gaze and with no questions asked about the provenance of their products or the wastes and emissions. Governing authorities want to make sure that the people are not being poisoned or the Earth ruined. The Global North wants to carry on with their historical wealth advantage. The Global South wants a chance for economic development even in a Carbon-constrained world. You have to get all parties into the room to discuss these needs and issues. And you need to have an outcome that is acceptable, morally, practically, pragmatically and financially to all parties. C&C is fair shares and a safe sky : equity and survival. You can't have one without the other. Under the umbrella of C&C, following its strictures and shape, you can design any kind of national, regional or global scheme you like, as long as it produces Contraction and Convergence within the timeframes agreed for both. The approaches would probably consist of schemes like : (a) a national management of Carbon Rights within a national quota set internationally; or (b) a national commitment to phase out high Carbon business and high Carbon Energy using a national tax on Carbon; or (c) a global fund, raised from all parties to the Climate Convention (not just the businesses), administered cleverly by a trusted consortium. In those countries where there is electronic money, a Carbon Debit card could be used. In those countries where people do not usually handle money, different systems should be designed, perhaps using regional Carbon accounting to provide access to Carbon Energy for local people. Actually, the approaches are diverse, but you must conduct any Carbon Abatement scheme under the rules of survival and equality, and you must use the disparity in Carbon Emissions of the Global South and the Global North to enable offsetting while adjustment takes place (which would transfer wealth north to south).

page 72
-->   "underlying assumptions...1. greenhouse gases should be regulated at the country level" : this is an obvious level of administration, only beaten by taking it down to the regional level, as European administration does. It's not a criterion made lightly or casually. It's proven, so let's use it. The basic question is, as it always will be : at what level of cooperation do we need to regulate Greenhouse Gases GHGs ? Because we need cooperation, globally, across all sectors. We cannot do this without cooperation. It cannot be self-selecting peoples/groups, or merely voluntary. The best level of organisation may well turn out to be regional, as are the main Carbon fuel resources, and a national level of administration is approximate to that. However we tackle Carbon Emissions we need a good tranche of regulatory measures, to get ACTUAL emissions cuts, and the best level for regulation and enforcement is the nation state.

-->   "underlying assumptions...2. based on the country in which any given emission takes place" : any other kind of accounting would fail to be agreed, as it would be too tortuous to calculate accurately. If required, import/export differential emissions could be included, but most parties would not accept that (except maybe the Chinese).

-->   point 3 "a series of global caps on emissions should be set for given periods" : almost all the schemes for Carbon control that have been thought out include a year-on-year or period-on-period stepdown in Carbon Permits. There is a good reason for this. Staging is a good thing. If the necessary eventual cap is placed immediately, nobody could conform to it.

-->   point 4 "...divided into tradable greenhouse gas permits..." : I think that it is here that you show you have failed to comprehend the full nature of Contraction and Convergence. The trading element only covers those "unused" permits. These remain uncapitalised unless they are needed to cover another's excess. Those who exceed their entitlement should pay for doing so - and buy unused quotas from others. This creates a natural thriftiness. The quotas will not last forever : so the trade in permits becomes like a system of rent as per some of the examples of natural commons management you give on pages 74 and 75 - "rent" other peoples' quotas. They might need them for themselves next year.

-->   point 5 "to be allocated free of charge to national governments" : it's good not to involve money unless you absolutely have to : money has a variable value and is not an absolute quantity or measure. The point is that under C&C there is no charge for Carbon, unless you bust the quota.

page 73
-->   I do not accept that C&C could ever be compared to the Highland Clearances. With C&C the poor are not removed from their Carbon Rights. It's only when rights get sold and traded that the problems begin. There's a Bible story about that : Esau sold his birthright to Jacob for a bowl of soup. That is what a Carbon price does to Carbon Rights. Contraction and Convergence by contrast does not marketise or monetise all the Carbon Rights.

-->   "indicates that there are potential dangers in the approach advocated by C&C" : no, it does not - the whole Carbon cap is not automatically traded to cash. Money is vapid and always devaluing - and you can print as much of it as you like. It's not backed by anything solid or real.  In the example of the Highland Clearances mentioned, the rights were handed over in a deal where there was no choice or possibility of negotiating better settlements - no direct equivalence in value was specified.

-->   "For example, oppressive governments might keep their people in a state of deliberate 'carbon poverty' in order to maintain a supply of surplus emissions rights 'for export' " : but there is a very clear option for a sanction that could be applied if anyone tried this : no value would be given to the Carbon Permits put onto the market from an oppressive country : so no wealth could be made by those who wished to sell them.

page 74
-->  "[C&C] in essence prints money for those in control of the permits" : no, it does not. Carbon needs to be the form of exchange. The actual value in money is not a sufficiently good parallel or proxy. Money does not and cannot substitute for Carbon Rights. The marketable money value of Carbon is not specified under C&C - only Carbon is accounted - all mechanisms that could operate under C&C are flexible.

-->   "song along the Riviera" : if we don't get this problem fixed pretty soon, the Riviera will be long gone.

-->   "Both the contraction and convergence targets are negotiable, not fixed and leave the delivery to trading a global commodity" : C&C can only operate with a negotiated allocation period, during which all things must be fixed. The point about C&C is that you need to get adoption of the framework, then decide the actual C&C pathway - based on the calculations of safe concentrations of GHGs in the atmosphere - based on the current science. You agree to go for a period, say 5 years, following that C&C pathway, and then re-evaluate the science and change the framework parameters accordingly. The negotiation of targets happens at the start of any period, and stay fixed for that period. You need to have SOME fixed points in any solution. Also, admittedly at the start the Minority World (North and West rich countries) will need to avail themselves of the Carbon Trading facilities with the Majority World, but as time goes by the Carbon Trading element will become less and less. Why should it be always assumed that Carbon has to be exchanged for cash for any system to work ? 

-->   "diverse ways of allocating temporary property rights" : for example allotments, where the real "value" of the plot is not rented - only token monies are required. Your examples numbered 2 and 3 are unfair. Example 8 : the licence is only a token value to keep the system operational and to enforce the rules : similar to CPZ controlled parking zones.

page 75
-->   "It would rule out more cooperative international approaches to manage the atmosphere for the common good." I think that statement, besides being incorrect, shows a remarkable lack of understanding : C&C is a framework within we must constrain ourselves to act, based on the science and the constituencies who are negotiating a global solution to Climate Change. That, agreed, is a cage, but a necessary set of boundary conditions in order to approach workable, safe, solutions. With C&C we can make a lot of the trade in the convergence period based not on money by technology and know-how and best practices and examplars of energy efficiency schemes. As long as everyone stays within their allocations, C&C can be done without using money, and the risks associated with monetising Carbon, using other forms of trade and cooperation between the Least Developed Countries and the Highly Developed Countries. Avoiding putting a cash value on Carbon is a genuine safeguard. By contrast, Kyoto2 could not function without using money ! C&C is by its nature a proposal that functions on deep and involved cooperation. And your "more cooperative international approaches" would be what exactly ?

-->   "We need to raise substantial sums of money" : that's a barefaced unjustified assumption if ever I saw one ! We don't need to raise money. Actually, we could print it into being instead. 

-->   "Ordinary aid budgets are already committed" - because no one has raised them or fulfilled their promise to commit certain levels of funding to them. It has been shown that the number and scale of "natural" disasters is increasing with Climate Change, so there should be a revision on how much countries should be paying into the relief and emergency funds. 

page 76
-->   "Give the permits away and the opportunity is lost." Given to WHOM ? BY whom ? Under a C&C regime, the poor stand to gain much in terms of Carbon Permits, as they are low Energy users. That neatly coincides with the higher needs for adaptation to Climate Change. We don't want to be stealing from the poor now, do we ? If we assume the rights of the Carbon-dependent profit-making corporations to own Carbon Permits we are effectively giving rights away to them. The money they use to buy the Carbon Permits at Auction under Kyoto2 will be from the wealth that they have accumulated from burning Carbon. This is perhaps a worse distortion than the "grandfathering" of rights under the EU ETS, because it is not immediately visible.

-->   "to sell the permits to the polluters and to reinvest the funds so raised" : a very inefficient recycling of money if by comparison under a C&C accounting system, non-money technological transfer could be done. It's always going to be more efficient for a rich world country to pay for Green Energy technology that it would be for a poor world country, for example. 

-->   "By contrast, C&C would transfer large sums of money from governments of countries such as the USA, EU nations and Japan, which would need to buy permits, to governments of (mainly populous) countries with relatively low greenhouse gas emissions. This money would then be theirs to spend as they wished." My, your prejudices are showing ! Should not a country which is undeveloped use Carbon Credits in the way that it chooses ? Would a country which is undeveloped suddenly break all known Carbon emissions trajectories just because it received some Carbon Credits ? Do you think that all the people in India, for example, want to consume like Americans ? In fact, the sums of money would only be for overshoots on Carbon Quotas, not for all the Carbon in the developed countries, so the amount of money moving would be smaller than under Kyoto2, and therefore the market would be more efficient.

-->   "This money would then be theirs to spend as they wished." - Not so. Poor countries would not be free to spend their traded Carbon Quotas in any way that they wished. For instance, they would not be free to increase Carbon Emissions. By taking part in the trade, they would be obliged to verify that they used the funds raised by trading away Carbon Quotas in a non-Carbon way. How can this be verified ? It's easy to know how much Carbon fuel and Energy flows in and out of a country. It's not so easy to know how much Carbon fuel and Energy is pulled out of the ground and used inside the same country. For this, you would need a process of inspection at the international level, rather like the Nuclear Weapons inspectorate. But this kind of body is going to be necessary for any method of Carbon control you wish to set up. You did not discuss this, and I think you should.

-->   "hard to see how donor governments would justify the transfers of tens or hundreds of billions of taxpayers' funds to electorates clamouring...for tax cuts and higher spending on health, education, pensions and housing..." The electorates are already making a Daily Mail fuss about Energy price rises. How much higher would it go with Auction-instigated Energy and fuel price rises ? In fact, less money would need to be raised from the citizen consumers with C&C than with an Auction, as not all Carbon would need to be monetised for trade. You pick a number out of the air for the impact of Carbon Trading on a nation's economy, but you don't calculate it. Also, you don't compare it to the impact of your own suggestion, which is potentially an order of magnitude higher in total. Looks like a vain and baseless accusation. Take the straw man out of your own eye first to see the grass cutting in mine, as someone once paraphrased.

-->   "these vast intergovernmental transfers would do nothing in themselves to mitigate or adapt to climate change", but that's exactly the same kind of reasoning I could well level at the Kyoto2 Auction you propose. The point with C&C is that money transfers are only made when pressure has been applied to reduce Carbon which is shown to be failing to reduce Carbon in sufficient quantities. So, for example, the UK puts in place a massive Energy Efficiency program, making it the biggest national effort ever since the war, at the same time ramping up all forms of Renewables, especially at sea to avoid the sensitivities of NIMBY types, and wipes new Fossil Fuel power plant plans off the map. Then, when the accounting is done, it finds it's overshot its national Carbon Quota. Then, and only then, does it need to start sending something abroad. And that something could be direct technological donations instead of money, completely undermining your corruption idea. The point is, have you ever experienced an international fund, apart from the World Food Programme and the Montreal Protocol's that has been free from corruption ? As soon as you trade rights for money, you are open to corruption. C&C is a framework, not a Carbon Trading system. You apply the C&C framework and you can operate any kind of allocation system within it, even money trade if you feel confident that it shall not be corrupted. C&C can best be applied, for reasons of administration, at the national or sub-national regional level.

page 77
-->   Your comment on Cap and Share is "it is a genuine system for allocating rights to the atmospheric commons, with the rights going directly to individuals and communities rather than governments". This makes Cap and Share one type of implementation proposal of the C&C framework. Another is Tradable Energy Quotas, or TEQs, the adaptation of Domestic Tradable Quotas DTQs from David Fleming and Mayer Hillman. In fact, Cap and Share would be administered at the government level, just as any sensible allocation system would be. The rights don't need to be in any sense "owned" by the government administering the system. In both Cap and Share and TEQs there is a proposal to use a Central Carbon Bank. Note, this would not necessarily handle money. If you don't use national and local authorities to manage Carbon allocations, how would you implement a Carbon control system then ? Even if you had to parcel up and administer the proceeds from a Carbon Permits Auction, you would still need to target the cash at the right people and places. And that would fall to national and local authorities, as to set up a parallel system would be inefficient. And as for Cap and Share, can you imagine reaching tribal herdsmen with Production Authorization Permits PAPs and the sale thereof ? I mean, I know tribal herdsmen can cope with mobile phones and so I don't mean they're unable to use or understand technology, it's just that the kinds of tools of administration of PAPs would be absent in the middle of a tribal herdsman's domain.

-->   "emissions are regulated 'upstream' at or close to the point of production of fossil fuels, not at the points of emission". TEQs has an upstream component too, and an Auction of Carbon Quotas to business and industry, but it makes upstream control efficient by having downstream demand-side control. In other words, it squeezes the flow of Carbon at both ends of the pipe. Money systems are relatively stable if supply is cut at the same time as demand.

-->   "the system could initially be adopted by individual countries" - and so could any system operating under the proportionate quota as defined by a global C&C framework, and so could a TEQs system.

-->   "open to new ideas" : this is a sideswipe. The reason why the C&C framework is proposed is to make sure people understand that we are living within constrained boundaries for survival, and that we need to agree a global solution, and that means an equitable one. C&C is not open to alteration, as that would fail the science and society. You can't keep moving the goalposts if you want to win the Climate game. Nature will not allow you to go beyond certain boundaries, as identified by C&C. C&C is not limiting creativity of implementation of its framework, but it is asserting the absolute limits that we need to stay within.

-->   "per capita rather than according to need" : are you suggesting that we have to spend 20 years debating globally about which people deserve how much access to Carbon Energy ? How could we get everyone to agree ? It would end with a "colonialist" patronising imposition. But that may well turn out to be the obvious choice anyway : equal Carbon Rights for all.

-->   "In distributing the rights equally to all global citizens...the benefits offered by Kyoto2...fund to spend directly on addressing the causes and the consequences of climate change are forgone [sic]."
A fund could still happen in the mechanism for Fossil Fuel producers to buy PAPs under a Cap and Share strategy. A kind of "Tobin" tax on the trade in Fossil Fuels. Let's go back to basics again : the majority of the Carbon Dioxide Emissions are in the rich industrialised nations. Some mechanism has to be employed to de-Carbonise these nations and the corporations that operate for the most part within their boundaries. If you start regulating Carbon away, you can have a major impact, but you might still need to employ taxes or Auctions to make up the gap between the results and Carbon neutrality. You can expect British Petroleum BP for example to be willing to pull their wallets out in order to be able to stay in business. That's the kind of response that is required and the soone we realise it, the better. In a Carbon-constrained world, BP will have to mutate or die. It cannot carry on being the kind of Carbon-based company it is now. It could not pay for all the Carbon offsetting it would need. Why set up a fund to pay BP to de-Carbonise, when it should be able to work out it needs to de-Carbonise for its own survival ? BP really should go Beyond Petroleum.

-->   Cap and Share "applies to fossil fuels only" : there is a very good reason for that, the same reason as the Carbon Rationing Action Groups CRAGs only cover the main utilities and fuel bills. It's because it's easy. Fossil Fuels and Electricity are highly controlled and monitored, and there's no confusion about origin or destination. Besides which, a large proportion of European agriculture and forestry and industrial and construction emissions are coupled to the use of Fossil Fuels, so controlling Fossil Fuels will control other emissions as well.

-->   Cap and Share "includes no 'safety valve' system to prevent PAP price spike" : but you need price fluctuations to keep everyone on their toes and adapting, if you exchange all Carbon for money.

page 78
-->   "in particular Ireland is considering adoption of C&S [Cap and Share]..." as far as I understand it, the scheme would only cover road fuel.

-->   Cap and Dividend : "It proposes that citizens never actually receive the permits..." : yes, it avoids the administration cost of Cap and Share, where all citizens would receive through the post a Carbon rights certificate, which they could trade in Post Offices and Banks.

-->   The dividend of Cap and Dividend would go some way to buffer the citizens against price rises which would result from the squeeze on Fossil Fuel, Energy and other companies. However, the funds raised by Cap and Dividend would not be used for de-Carbonising those businesses. You are left with the challenge to finance de-Carbonising corporates. It will not happen without funding from somewhere, and there has to be some means of making it happen from the corporates' own purses.

-->   Note how Cap and Share, Cap and Dividend and DTQs, now TEQs all have per capita foundation.

page 79
-->   "The main disadvantage of a DTQ system is the huge associated accounting exercise." But the fact is, whatever we do about Climate Change we need to count Carbon. At all levels, at all stages. We need Carbon to be the new currency as well as the new commodity. Carbon should be the medium of exchange, so we need to count it. Money is too random in value to be a suitable medium of exchange, just take a look at the Big Mac Index. In the long-run we would hope that Carbon has increasingly less monetary exchange value, so to set up a monetary system to control Carbon will fail.

page 80
-->   "We would, in effect, need to become a nation of carbon currency speculators". No, we would not. If Carbon is the currency, and the medium of exchange, then monetary vagueness is not encountered.

-->   "It is harder to envisage in the UK, however, where government records are in a state of relative chaos and insecurity." So how is it that the TV Licensing authority, the Police and the Local Authorities know how many people there are, and where they are ? No, seriously, in order to control Carbon, you do need to count Carbon, and the end consumer point emitters of Carbon are as important as big business and industry and the power generation sector. There are ways to know how many people there are, and where they are. Everyone that interacts with the Health Service, the utility companies or goes shopping with a Debit Card can be counted. Everyone that votes is on the Electoral Roll, or they miss their opportunity to vote. I know Shaun Chamberlain of TEQs.net is against the idea of using the Electoral Roll to identify people and allot them their Carbon Rations, but he and David Fleming will not be short of ways to ID people, even without the massive proposed Government ID Card project (which, by the way, I could arrange to get done more cheaply and efficiently than the normal accountancy/IT firms, but that's another matter).

-->   "less developed countries, where the very existence of many citizens passes without official record" - how are these countries going to be able to claim from an international Climate Change adaptation fund, then, if they do not know how many people and communities they need to protect ? Just because people aren't in official records does not mean they don't exist or that their needs and contributions don't count. We need a way for people to participate in whatever Climate Change policies are enacted, all people. Even if the governments haven't counted them. National policies that squeeze the amount of energy available to their citizens without denying it altogether will create emerging communities of Carbon and people counters. Energy rations have been put in place in several countries already, due to a variety of factors.

-->   "As a global system carbon rationing with DTQs would be unworkable" : TEQs (ex DTQs) is proposed as an implementation of Contraction and Convergence which is appropriate to the UK, and virtually all rich industrialised countries. It is not intended to make it global. TEQs could be implemented nationally, independently of the decisions that other nations make to manage Carbon. The Carbon Quotas under TEQs would be proportionate to the UK's global Carbon Rights.

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jo.
+44 77 17 22 13 96
http://www.changecollege.org.uk
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