Elizabethan Era Bank Buys First Carbon Credits From the New World

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The venerable British bank, Barclay’s, founded four centuries ago right at the end of the reign of Queen Elizabeth I, and NRG Energy Inc, the largest US independent power producer, have just completed a deal for the very first carbon permits to be offered by California’s planned cap and trade program to reduce pollution in its AB32 climate legislation, according to Bloomberg News.

The permits will be delivered in December 2012, according to the head of US emissions trading at Barclays in the UK, which has been involved in (EU) carbon trading for some time. The trading begins in 2012 for utilities and manufacturers, and by 2015, for vehicles.

(Tesla has already benefited from carbon trading, receiving $13 million from Honda in carbon trades, since electric vehicles reduce greenhouse gases. Honda has been one of the last of the major car manufacturers to move to develop electric vehicles, so by 2015, it may still need permits to produce gas cars.)

The first permits are offered at $11.50 a ton, but by 2020, could reach as high as $30 a ton. Market conditions can only determine the price to pollute, so the cost (to polluters) and the benefit (to innovators) can vary. By contrast, pollution limits are fixed. They cannot be exceeded.

The advantage of cap and trade over carbon taxes is certainty. Pollution is capped and reduced.

The cap: a total pollution allowance, is set in advance and reduced each year, in order to meet greenhouse gas reduction targets.

Carbon tax
With a carbon tax, by contrast, the price of pollution is fixed, but the limit is not, so pollution is not necessarily reduced. Theoretically, the rich could continue to pollute, because a tax is just money, (in the same way that the rich can afford to pile up the speeding fees that the rest of us cannot).

Despite an extremely well-funded and pervasive disinformation campaign by polluters that could end civilization by spoon-feeding lies to make us a nation of climate zombies, Californian voters managed by some miracle to stand up to the fossil industry, and to protect our chance at joining the rest of the world in developing the new clean energy future.

If we can transition to a clean power future, the human race can survive another four centuries, at least. Four centuries is as long from now, as when this image was painted of Queen Elizabeth I. but in only three centuries, half the planet will be too hot to live on by just 2300! In four centuries sea levels will have obliterated all of our coastal cities including of course London, Hong Kong, and New York.

According to the very readable economic historian Fernand Braudel (The Wheels of Commerce), it was in the Elizabethan era that we created the legislative foundations of economic life that continue to underpin modern capitalism in western democracies. Laws governing economic exchanges are the reason that western civilization flourished while more lawless places did not.

The polluters prefer the lawlessness of failed states, so they can pollute till they run out of extractable fossil fuels, which will hit them sometime later in this century. But if we don’t put a cap on pollution in the next few years, there won’t be a much of a world for future centuries.

Wouldn’t it be wonderful if we could have another four centuries of civilization?

If widely adopted, cap and trade would make this possible, by simply capping and reducing the dangerous greenhouse gases that foreclose our future. Queen Elizabeth’s legislative heritage, and the longevity of Barclay’s Bank shows us that good legislation like AB32 builds real civilizations that last.


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