Codswallop from Wall Street

Affecting a degree of distance from something is an easy way to belittle it. For example, those Americans who still can’t bring themselves to swallow hard and just say “greenhouse gasses”, love to use the adjective “so-called” when referring to greenhouse gasses, in a last, hot gasp of denial.

This is just what the “Wall Street Journal” did in its editorial on the ills of the Kyoto Protocol and the EU ETS on 14th December 2006. That editorial is breathtaking. Read it.

The editor of the Journal sniffs at Europe’s politicians for the folly of their emission trading scheme. It criticises the typically eurocratic political meddling in trying to influence the behaviour of business through the creation of an artificial market. Far, far better is the US approach of subsidising business through USD 1 bn of tax credits. So the Wall Street Journal thinks that Government subsidy through tax breaks is not an attempt to influence what it calls the “Wisdom of Markets”, but the EU Emission Trading Scheme is. There does not seem to be such a big difference between a scheme where the government imposes a cost of carbon through a market, and a scheme where the government imposes a negative cost of low-carbon through a tax credit. Either way, the government does not trust that wise old thing, the market. And for jolly good reason, if the market is anything to do with Wall Street.

At least in the emission trading scheme, the government leaves it to the market to select the best technology. In the US scheme of tax credit, the wiser government chooses which technologies to support.

The Wall Street Journal also gives a fine example of the Chinese buying US manufacturer Caterpillar’s gas engines for burning coalmine methane as nice proof of the “market” at work without the need for government intervention. Err, hello. Who’s that doing the buying? The Chinese government, in effect. So not the wise old market after all. And what prompts them to buy? Err … Just that confounded European Union Emission Trading Scheme which put the price of carbon high enough to make the coalmine methane deals in China viable. Right.

Why does the editor of America’s iconic newspaper flaunt his ignorance with such confidence? Could it be all the “hamburgers” they eat over there? Or perhaps the result of a free market in education?

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3 Responses to Codswallop from Wall Street

  1. Anonymous says:

    A major paradigm shift happens. Mankind needs to rethink the consequencies of its lifestyle. Never before we experienced that our way of living destroys the possibility to live the same way in 50 years. We either change or disappear. The US consumer society is particularly vulnerable to get accomodated to such a new paradigm.

  2. Anonymous says:

    A question Europeans (and others) might ask themselves when “puzzled” or otherwise trying to understand, applaud, criticize or see the likely motif benind the US government, media, key players’ position is to realize that, per US goverment official data (in 2004) the top 1% of Americans already owned 42% of national wealth (in 1990 it was “only” 38%). With such unprecedent concentration of wealth, how one can think the domestic or international policy, the media, etc. woul look like? Can anyone really believe that the ones who really “call the shots” there care about others, including the majority of fellow Americans who are (rapidly) falling behind their middle-class counterparts in other developed countries. So …pooh poing anything which is now owned by American, not controlled by them, including euro which has been many times labeled by Wall Street “wizards” and WSJ as having “no chance” to suceed and to stand against US dollar. Facing global challenges, from environmental pollution, to China’s challenge, EU and US should stand together. With such concentration of wealth in the US, the social contract in Europe and in the US look often rather different and common position might not be coming.

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