The dollars and nonsense of carbon trading

A company in Regina has started paying farmers and ranchers $1.00 per acre to do nothing.  If you own 5000 acres of ranch land in Saskatchewan, land that neither grows stuff or is used for more than just the occasional cattle grazing, then you can get paid $5000 by a company called C-Green Aggregators.  C-Green sees green in the fact that your previously-ignored land does not generate carbon or green house gases (GHG) and what used to be called the Back-Forty is now called a Carbon Credit.  Why do they pay you for Carbon Credits?

Those $5000 in credits will in turn be sold to companies, such as the Oil Sands folks who produce millions of tonnes of GHG and carbon each day.  Rather than cleaning up their act, the producers will be offered to purchase the credits accumulated by C-Green to offset the amount they pollute - on paper.

So look at it this way; through this simplified example, On Day Zero, your 5000 acres of land produced no units of carbon but Oil Sands produce 10000 units of carbon.  On Day One C-Green pays you $5000 for the 5000 credits associated with your land.  On Day Two they sell those 5000 credits to Oil Sands who in turn apply those credits thereby reducing the amount of their carbon outputs on paper.

So the net total reduction ON PAPER is 5000 units of carbon but the net total reduction of carbon in real life is ZERO.  How does that clean up the environment?

You can see why the farmers and ranchers buy into this money-shifting scheme but what is in it for C-Green?  The make the GREEN, the moolah, the dinaro.  The credits for which they paid the farmer $5000 will be sold to Oil Sands for $50,000.  These credits are currently sold on the Chicago Exchange  and will eventually be traded on the Montreal stock market.

It is expected that the largest purchasers of these credits will not be the polluters however.  According to the C-Green web site, purchasers will include hedge funds, investment companies and speculators.  Carbon and green house gases to those folks are the same as toothpaste - a commodity to make money off.

This scheme is called CAP and Trade.  It is what the Conservatives and the NDP want to install.  Carbon is currently priced at $4 per tonne.  The NDP web site expects it to be worth $35 per tonne.  Now that is growth.  C-Green is currently fighting with the government over whether the credits will be exposed to GST.  So if the Cons and NDP get their Cap and Trade scheme, there will be very little effect on GHG or carbon but the GST coffers will swell as well as the coffers of their buddies on Bay Street.

Isn't democracy wonderful?