The Emissions Trading Scheme Debacle, i.e. “The Carbon Tax.”

Before I start with the meat and potatoes of this month’s article, I do want to publically state that I am not a believer in the ‘Sky is Falling’ point of view regarding ‘Global Warming.’ So before any reader starts to berate me for having a biased point of view, or acting like an ostrich by sticking my head firmly into the ground to avoid seeing what is going on around me, please allow me to at least explain why I take this stand of non-belief:

When I was attending my local Comprehensive Secondary Education High School back in Rural England in the nineteen seventies and eighties, I distinctly remember the world’s scientific community trying to whip up the public’s attention and concern regarding the then great fear that we were on the edge of a modern Ice-Age and all life on Earth was in mortal danger thanks due to ‘Global Cooling.’ Now today, thirty five years later, scientists are proclaiming that the planet is now in massive danger thanks to ‘Global Warming.’ Apart from saying “I wish that they would make their minds up” I do know that much of the data created by both Mr. Gore and his scientific cronies was either misinterpreted, misrepresented, and/or hyped beyond the value of what it can tell us (Please watch The Great Global Warning Swindle, that was produced for Channel Four in Britain in 2007, as well as exhaustive research and documentation that is available on the counter-view against Global Warming.) You know the phrase: “79% of all statistics are pulled out of someone’s rear-end.” I know that there are many indications of a change in nature, but obviously the Global Warming activists do not believe in the ability of the earth to manage its own environmental systems better than mankind will ever be able to.

Okay, with that said onto the main feature...

The European Commission, a cabinet government that consists of twenty seven bureaucrats who conduct their legislative assembly in Brussels, are an executive arm of the European Union (E.U.) The Commission has taken on the perceived issue of climate change as one of their top priorities. Their belief is that the production of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride and their release into the earth’s atmosphere by humanity is the principle cause of global warming due to a greenhouse effect. They have mandated that all E.U. member countries starting in 2013 must cut their carbon emissions by 30% of what they were measured to be in 1990, within the next eight years (year-end of 2020.) When that milestone is reached, further reduction shall be mandated.

This mandated reduction will be achieved by the E.U. by requiring their member states to require all greenhouse producers (i.e. all companies that operate in the E.U.) to measure, monitor and record their averaged historical production of carbon dioxide, and then dispense a wallet of Carbon Trading Credits to them all in an amount that is equal to 85% of their credit need, as well as selling credits to make up the 15% shortfall and also to non E.U. members who shall be emitting greenhouse gases within the borders of the E.U. These wallets all go into effect next year (2013.)

Even though most of the documents available at the Commissions website regarding the Emissions Trading Scheme, are peppered with the phrase ‘un-due burden’ as references to the many legal challenges against the scheme, the commission believes that ETS is as a simple, fair and cost effective measure against global warming, as well as recognizing that it is creating a brand new commodities market that is based entirely on the trade of unused ETS credits. The credits are loosely labelled by the E.U. as ‘financial instruments’ and frighteningly as far as I see it, they are viewing the trading of credits as a new creator of venture capital that will be injected into the economies of the E.U. member states, further shoring up the damage wreaked upon them by the Global Financial Crisis. Officially these credits are also called European Union Allowances or EUA’s. One credit (EUA) and shall have an opening price on January 1st, 2013 of €25 or approximately $33.50 at today’s rate of exchange.) 1 Credit = 1 Metric Tonne of Carbon Dioxide release.

Jet-A apparently, has 21.537 pounds of carbon dioxide locked up inside one U.S. gallon. This is released when it is burnt.

A typical current production, mid-size business jet is purported to emit 6.2 LBS of carbon dioxide per NM. For a flight from the Midwest U.S. to London or Paris, the total carbon dioxide emission shall equal 24,800 LBS (12.4 Short Tons or 11.272 Metric Tonnes.) At the rate of $33.50 per Metric Tonne, the Carbon Tax shall equal $377.62. It is predicted however, that due to speculating traders and government meddling, the cost per credit will go up by as much as 700 times the initial offered value, i.e. almost $24,000 per credit. Never say never regarding this not happening, because no-one ever expected a change in the Italian government that occurred recently, whereby the new Prime Minister and his cabinet are implementing a residency tax on all private aircraft per visit that can amount to almost $400,000 per visit for a Gulfstream sized aircraft as an example.

By reading the ETS legislation that is applicable to aviation, you will find that no aircraft is exempt if it produces more than 10 Metric Tonnes per annum. As you have seen, this allowance is pretty-much obliterated on the first flight across the pond from the U.S. to Europe.

The ETS legislation that targets the aviation industry reads as follows:

Aviation Flights which depart from or arrive in an aerodrome situated in the territory of a Member State to which the Treaty applies. This activity shall not include: (a) flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a country other than a Member State, where this is substantiated by an appropriate status indicator in the flight plan; (b) military flights performed by military aircraft and customs and police flights; (c) flights related to search and rescue, fire-fighting flights, humanitarian flights and emergency medical service flights authorised by the appropriate competent authority; (d) any flights performed exclusively under visual flight rules as defined in Annex 2 to the Chicago Convention; (e) flights terminating at the aerodrome from which the aircraft has taken off and during which no intermediate landing has been made; (f) training flights performed exclusively for the purpose of obtaining a licence, or a rating in the case of cockpit flight crew where this is substantiated by an appropriate remark in the flight plan provided that the flight does not serve for the transport of passengers and/or cargo or for the positioning or ferrying of the aircraft; (g) flights performed exclusively for the purpose of scientific research or for the purpose of checking, testing or certifying aircraft or equipment whether airborne or ground-based; (h) flights performed by aircraft with a certified maximum take-off mass of less than 5700 kg; (i) flights performed in the framework of public service obligations imposed in accordance with Regulation (EEC) No 2408/92 on routes within outermost regions, as specified in Article 299(2) of the Treaty, or on routes where the capacity offered does not exceed 30000 seats per year; and (j) flights which, but for this point, would fall within this activity, performed by a commercial air transport operator operating either: fewer than 243 flights per period for three consecutive four-month periods, or flights with total annual emissions lower than 10000 tonnes per year. Flights performed exclusively for the transport, on official mission, of a reigning Monarch and his immediate family, Heads of State, Heads of Government and Government Ministers, of a Member State may not be excluded under this point."

Is there any way to avoid the Carbon Tax?

Our only hope is that the 26 or so countries that include the U.S.A., China, Russia and India, that all oppose this legislation that is being foisted upon all visitors to Europe, will manage to defeat it through trade embargos and other means. With as much financial strife that the Eurozone is feeling now especially with Greece, let’s not allow this Euro-Tax scheme to become cause for a military war.

So, what do you think about all of this? Do you think ETS/Carbon Tax is a good thing, or do you find it demonstrable like I do?