Weekly Comic: The Herculean Tax of Slaying Carbon Emissions

21 Tháng Bảy 2021
Weekly Comic: The Herculean Tax of Slaying Carbon Emissions © Investing.com

By Geoffrey Smith

Investing.com -- The carbon dioxide trade is going global.

The European Union and China both took big steps last week toward imposing heavier costs on greenhouse gas emissions, the single biggest driver of man-made climate change.

Right on cue, the initiatives came in the same week that devastating high-energy floods hit both Europe and China, reminders of the destruction that the new measures aim to avert.

In the long term, analysts say, the measures may yet deliver what they promise, creating a better set of incentives for energy production and consumption (and broadening a tradable asset class that has delivered handsome returns in the last couple of years).

But in the near term, their impact is likely to be minimal, weakened - if the past is any guide – by lobbying and the subsequent dilution of such regulations. Those hoping to make a quick buck on carbon permit futures will need an exhaustive knowledge of the small print of local regulation as it evolves.

The EU’s ‘Fit for 55’ emissions reduction strategy published last week, is much more wider-reaching, but it is China’s that is more important, given the country's status as the world's largest current polluter.

“Without sufficient reduction by China, the goal of 1.5 degrees is essentially impossible,” U.S. envoy John Kerry said in a speech on Tuesday, referring to the Paris Climate Accord’s key aim of limiting average temperature growth worldwide.

Despite promising to reduce its emissions from 2030 onward and be carbon neutral by 2060, China is still building coal-fired power stations - a living, belching embodiment of the ‘carbon leakage’ phenomenon, by which polluting industrial activity simply moves to countries with laxer regulation.

So it’s good to see the Chinese trading scheme starting with the power sector – over 2,000 power companies that account for some 14% of energy-related emissions worldwide. However, the prices paid for emissions credits on Friday’s debut day in Shanghai – less than $8 a ton – are nowhere near the $50 level that the International Monetary Fund says would be compatible with Paris.

The truth is that the only long-term useful scheme is one that hurts, and President Xi Jinping’s record in this context is not encouraging: repeatedly, he has watered down or retreated from ambitious structural reforms once their short-term economic cost has become evident. Key polluters such as the petrochemicals industry have three years to lobby the government before they pay a penny for their emissions, and there is no direct reference in the ETS plans to an actual reduction in emissions over time. The risk of backsliding is all too clear.

However, in this case, China may have no alternative. The EU’s plan for a Carbon Border Adjustment Mechanism will make it easier to punish producers who pay a lower price for their emissions. U.S. Senate Democrats – on the lookout for ways to dress up Donald Trump’s import tariffs in greener clothes – are now also reportedly working on a similar mechanism. There is no future for much Chinese industry without access to both those markets, so some kind of demonstrable progress will have to be made.

There are obvious risks of the EU and U.S. schemes being used for protectionist purposes, but the World Trade Organization’s rules can at least mitigate them, by making sure that the West doesn’t cut more slack to other polluters who they see as less of a geopolitical threat, such as India or Brazil.

In the end, though, policing climate change policies internationally may be less of a challenge than securing acceptance for them domestically.

The EU’s ETS, argue Claus Vistesen and Melanie Debono of Pantheon Macroeconomics, amounts to “a large, and sustained, tax increase on energy consumption over the next 20-to-30 years,” which is likely to be fall more on the poor than on the wealthy, in the absence of other measures. The argument would hold just as true for analogous U.S. or Chinese measures.

In France, Emmanuel Macron’s eco-taxes created the ‘yellow vest’ movement. In the U.S., the energy transition lends itself only too easily to manipulation by extremists of both left and right, as the winter storms in Texas showed.  The politics of energy taxation in China will hardly play out any more amicably, for all the Communist Party’s efforts to keep a lid on protest.

Indeed, the difficulties of implementing such policies could make you think that the only thing capable of keeping all three committed to their Paris obligations will be ever more frequent and ever more extreme weather events.

On that score, at least, there seems little risk of disappointment.

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28-07-2021 13:58:49 (UTC+7)

EUR/USD

1.1807

-0.0008 (-0.06%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Sell (8)

EUR/USD

1.1807

-0.0008 (-0.06%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (8)

GBP/USD

1.3872

-0.0002 (-0.01%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (0)

Sell (7)

USD/JPY

109.86

+0.10 (+0.09%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (2)

Sell (8)

AUD/USD

0.7355

-0.0006 (-0.07%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Sell (7)

USD/CAD

1.2586

-0.0014 (-0.11%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

EUR/JPY

129.70

+0.03 (+0.02%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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EUR/CHF

1.0812

+0.0010 (+0.09%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (2)

Sell (7)

Gold Futures

1,803.65

+3.85 (+0.21%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Silver Futures

24.835

+0.186 (+0.75%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Copper Futures

4.5475

-0.0123 (-0.27%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Crude Oil WTI Futures

71.95

+0.30 (+0.42%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Brent Oil Futures

73.77

+0.25 (+0.34%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

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Natural Gas Futures

3.915

-0.003 (-0.08%)

Summary

Neutral

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (6)

Sell (2)

US Coffee C Futures

204.93

-2.87 (-1.38%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (8)

Sell (1)

Euro Stoxx 50

4,064.83

-37.76 (-0.92%)

Summary

↑ Sell

Moving Avg:

Buy (0)

Sell (12)

Indicators:

Buy (1)

Sell (8)

S&P 500

4,401.46

-20.84 (-0.47%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

DAX

15,519.13

-99.85 (-0.64%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (7)

FTSE 100

6,996.08

-29.35 (-0.42%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (2)

Sell (5)

Hang Seng

25,339.00

+278.13 (+1.11%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (7)

US Small Cap 2000

2,189.73

-27.19 (-1.23%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

IBEX 35

8,699.20

-76.00 (-0.87%)

Summary

Neutral

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (2)

Sell (6)

BASF SE NA O.N.

67.060

-0.480 (-0.71%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

Bayer AG NA

50.59

-0.81 (-1.58%)

Summary

Neutral

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (2)

Sell (6)

Allianz SE VNA O.N.

210.28

-0.62 (-0.29%)

Summary

Neutral

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (2)

Sell (5)

Adidas AG

309.00

-2.95 (-0.95%)

Summary

Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (3)

Sell (5)

Deutsche Lufthansa AG

9.904

+0.057 (+0.58%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (2)

Siemens AG Class N

133.33

-1.23 (-0.91%)

Summary

↑ Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (0)

Sell (8)

Deutsche Bank AG

10.605

-0.055 (-0.52%)

Summary

Sell

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (1)

Sell (7)

 EUR/USD1.1807↑ Sell
 GBP/USD1.3872↑ Sell
 USD/JPY109.86Sell
 AUD/USD0.7355↑ Sell
 USD/CAD1.2586↑ Buy
 EUR/JPY129.70↑ Sell
 EUR/CHF1.0812↑ Sell
 Gold1,803.65↑ Sell
 Silver24.835↑ Sell
 Copper4.5475↑ Sell
 Crude Oil WTI71.95↑ Sell
 Brent Oil73.77↑ Sell
 Natural Gas3.915Neutral
 US Coffee C204.93↑ Buy
 Euro Stoxx 504,064.83↑ Sell
 S&P 5004,401.46↑ Buy
 DAX15,519.13↑ Sell
 FTSE 1006,996.08Neutral
 Hang Seng25,339.00↑ Sell
 Small Cap 20002,189.73↑ Buy
 IBEX 358,699.20Neutral
 BASF67.060↑ Buy
 Bayer50.59Neutral
 Allianz210.28Neutral
 Adidas309.00Sell
 Lufthansa9.904↑ Buy
 Siemens AG133.33↑ Sell
 Deutsche Bank AG10.605Sell
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,660/ 5,715
(0/ 0) # 693
SJC HCM5,650/ 5,720
(-10/ -10) # 698
SJC Hanoi5,650/ 5,722
(-10/ -10) # 700
SJC Danang5,650/ 5,722
(-10/ -10) # 700
SJC Nhatrang5,650/ 5,722
(-10/ -10) # 700
SJC Cantho5,650/ 5,722
(-10/ -10) # 700
Cập nhật 28-07-2021 13:58:51
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,804.59+4.710.26%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-IV2178022210
RON 95-II,III2168022110
E5 RON 92-II2049020890
DO 0.05S1637016690
DO 0,001S-V1672017050
Dầu hỏa1539015690
ↂ Giá dầu thô thế giới
WTI$72.05-0.24-0.34%
Brent$74.80-0.28-0.38%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.880,0023.110,00
EUR26.503,7027.882,80
GBP31.128,4532.428,70
JPY204,22214,93
KRW17,2420,98
Cập nhật lúc 13:54:56 28/07/2021
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