With 94% of the world’s oil supply locked up by foreign governments, most of which are hostile to the United States, the relatively puny American oil companies do not have access to enough crude oil to significantly affect the market and help bring prices down. Thus, Exxon Mobil, a small oil company, buys 90% of the crude oil that it refines for the U.S. market from the big players, i.e, mostly-hostile foreign governments.

http://www.powerlineblog.com/archives2/2008/05/020589.php

The World Resource Institute (wri.org) estimated this domestic subsidy was $300 billion annually — before Gulf War I. This figure includes things like the depletion allowance (a write-off for oil producers), road not paid for by gasoline taxes, and the military protection provided for oilfields and pipelines overseas (estimated at $50 billion pre-Gulf War I). This last item is essential since the U.S. imports nearly 70% of what it consumes.

For those of you without calculators, $300 billion is 600 times larger than $.5 billion

I’m open to alternatives to the U.N., but it would be a huge improvement just getting rid of current subsidies to U.S. petroleum producers. I’m not sure the U.S. government qualifies as more or less corrupt than the U.N., but so far, U.N. is not nearly as corrupt as a public policy apparatus that would give petroleum producers a gift orders of magnitude larger than anything the Russians managed to steal from the U.N.

But here’s the real question: How would you manage reducing global carbon emissions without a public policy apparatus of some kind? You know, a government, a United Nations, etc. I have no easy answers, but know that dismissing all such things because “the U.N. is corrupt” is straining at a gnat while swallowing a camel.

So keep the indignation — it’s certainly deserved. Just don’t suggest no collective action is possible. That may be true, but if it is, then we’re all sunk, and we might as well stop rearranging the deck chairs, ’cause this baby’s goin’ down.

Even if we needed to reduce carbon emissions (we don’t), and we needed government to do it, the UN would be the worst possible choice. It is an utterly corrupt organization, using the naive faith of internationalists (such as Obama supporters) and the coercive power of member governments, to generate profit for companies, individuals, employees and countries.

Case in point: the Chicago Climate Exchange.

This appears to be a rent-seeking market, nothing more.

There is little to no translation from price of a “contract” to the underlying instrument. I’m unable to identify an underlying instrument, other than “anti-carbon,” for which there is no uniform method of accounting or audit, despite claims to the contrary on their website. There are also many problems hedging the underlying mechanisms of supposed CO2 sequestration.

It is extremely illuminating that the benefits of the exchange are:

Be prepared: mitigate financial, operational and reputational risks
Reduce emissions using the highest compliance standards with third party verification
Prove concrete action on climate change to shareholders, rating agencies, customers and citizens
Establish a cost-effective, turnkey emissions management system
Drive policy developments based on practical, hands-on experience
Gain leadership recognition for taking early, credible and binding action to address climate change
Establish early track record in reductions and experience with growing carbon and GHG market

Notice that carbon reduction is not the first and painfully obvious raison d’etre (supposedly) of this “exchange,” rather it is reputational protection, as though smear campaigns are somehow worse than actual CO2 emissions/global warming.

i think you are looking at this the wrong way. everyone knows that that is what is going to happen. they are counting on it. it’s how they built their “consensus”. you give paper companies tax breaks for replanting forests they were going to replant anyway. in exchange, they support your carbon policies and you get to say “even the paper companies agree”. the same is true in finance. goldman sachs has been a huge supported of carbon trading? why? because they have pole position to establish the carbon market. so “even wall st agrees”.

this sort of spreading the filthy lucre around for conforming to the issue du jour is nothing new. “big green” has become a HUGE business. they buy off the opposition (generally using government money or regulation) to keep the gravy flowing.

One thing struck me: Even the people getting money from these credits don’t understand the financial movements behind them. Multiple times, they conflated carbon credits with charity. And they did not seem to understand that the additional cash flows from a project belong to the original investor.

So this is when it dawned on me: The only way to legitimately offset credits with those projects is to establish a separate company that reinvests its entire profits into further carbon reductions. Otherwise you are going to end up with wealth transfers to people who a) want the project anyway, b) benefit from reduced costs of the project, or c) otherwise siphon off the cash flows from the capital investments. I cannot believe I’m the only one who’s realized this, so I have to assume there are some restrictions in actually creating such a company. I’m curious whether you have any further insight as to why the inefficient and corrupt model has succeeded where this one has not.