One problem among many with the “Green Energy Transition” is that it was always a watermelon, green on the outside and red on the inside. It wasn’t market-driven, it was designed, and hyped, by people who didn’t care what people actually wanted to buy and indeed, in many cases, who actively believed that consumer preferences were inefficient and unenlightened. As when Bloomberg Green worries about “What a Clean Cookstove Company’s Bankruptcy Means for Carbon Markets”. Why one company’s bankruptcy should mean anything for “carbon markets” is less clear even than what a “clean cookstove” would be. One where you sprayed and wiped the backsplash as well as the main surface? But both are clearer than “carbon markets”. You just can’t go into a store and buy carbon. What are they talking about? Why, another face-plant by central planning, of course.
According to the article, in case you weren’t independently aware of it:
“This year was supposed to be a turning point for carbon markets, with the United Nations’ long-delayed country-to-country trading system coming into force and airlines preparing to enter a mandatory program to offset their emissions.”
Before we get to “a turning point for carbon markets” let us give a bit of attention to “supposed to be”. Supposed by whom? Perhaps people who think the United Nations was an efficient central planner, or some subset of them. But we’ll bet that nobody normal ever said to you, or anyone else, in the course of a chat last year, “2026 will be a turning point for carbon markets”. Nobody.
Also, who was going to compel airlines to enter a “mandatory program”? Laws are made at the national level, not internationally. Turns out it’s the UN too, via the International Civil Aviation Organization, so no one was going to bungle or cheat, obviously. What could go wrong?
Aha. Glad you asked:
“Koko Networks Ltd., which sold cooking stoves and clean-burning ethanol to about 1.3 million households in Kenya, folded in January amid concerns it was issuing more carbon credits than its products warranted, a claim the company has denied.”
Never heard of it, huh? Neither had we. And frankly while we have the normal human sympathy for people in Kenya, or anywhere, buying stoves and ethanol and selling them provided it’s all voluntary, we did not and do not regard it as a mainstay of the global economy. (Nor do we understand why ethanol is the best cooking fuel since nobody we know uses it and there’s a reason.) But the problem, of course, is the dreaded “carbon credits”.
Seriously. Someone wanted to create a global economy based on selling the right to emit something you can’t see or measure in Kenya to people in who-knows-where with no way to check. Compared to which getting sunbeams back out of cucumbers sounds blue-chip. Backed by the World Bank which means funded by governments. And the punchline is:
“The bankruptcy has had a ripple effect across projects selling carbon credits, companies buying them and the marketplaces on which those offsets are traded.”
Why? If a company selling stoves went bankrupt in Peoria, would it cause people in Kenya, or Patagonia, or Tokyo to reconsider the whole issue of applying heat to transform food and decide that stoves, food or both were overrated? No. Of course not. The problem here is that this whole business of carbon credits was flummery.
First you made an estimate of how much harm carbon dioxide did which was nonsense. Then you made an estimate of how much CO2 some activity would release that was also nonsense. And then you made an estimate of how much CO2 some activity would not release (in this case cooking with ethanol in Mombasa) that was also nonsense. And on that basis you proposed to link the worlds of high finance, aviation and having stuff generally to a system that would have been economic rubbish even if it weren’t flashing a big bright sign “Defraud the gullible foreigners HERE!!!” Which it was.
Mathiness being in vogue, Bloomberg Green has a colourful chart explaining that “Cookstove credits are expected to become more important from 2027” that deserves as much respect as the journalistic passive voice typically does. Or perhaps even less.
The story also says:
“Prices on Corsia, the marketplace for airlines where Koko was looking to sell its credits, fell as low as $12.25 from about $15 just before the firm’s collapse, according to data compiled by Bloomberg, and now sit at $12.85.”
As prices for tulips softened abruptly in the Netherlands in 1637. Except at least there really were tulips and markets for same. Corsia is not a marketplace. It is, instead, the ICAO’s (remember: the International Civil Aviation Organization) “Carbon Offsetting and Reduction Scheme for International Aviation”. As if ethanol stoves in Kenya, a land of some 53.3 million people who presumably only eat three meals a day on average, could offset the vast clouds of so-called “carbon pollution” that travellers, including the big-carbon-footprint bigmouths who lead most western countries, emit every day. The whole thing is speculation piled on ignorance atop mismeasurement built on the sand of dishonesty. What could go wrong?
Also, what’s a “country-to-country trading system”? Trade is carried on between individuals and firms, internationally as well as domestically, with governments frequently getting in the way. And yes, many governments including the Canadian mistakenly believe instead that they are trading with other governments, and rush about signing endless memoranda.
As noted above, there aren’t “carbon markets”. Which only matters to people who take economics seriously, a group that does not include very many politicians. Not even, it seems, Canada’s prime minister who has a PhD in the subject that he might as well have burned to boil his kettle for all the good it has ever done us, though he’s made quite a career of trendy pseudoeconomic views. Including that his infamous Memorandum of Misunderstanding with Alberta made boring stuff like actually building pipelines to get our oil to market hostage to a massive carbon capture boondoggle which will allegedly “collect up to 12 million tonnes a year of CO2 from various well sites in the Fort McMurray, Alta., region” and ship them by pipeline (the one thing we seem able to get into new pipelines is the thing nobody wants) “into deep underground rock formations near Cold Lake, Alta., thereby eliminating the emissions associated with the oil they produce.” Or not, since Canada’s annual GHG emissions are around 700 million tonnes of carbon of which “up to 12 million tonnes” is a drop in the bucket.
Well, every bit helps, right? No. Because the punchline here is that this project was meant to cost $16 billion but, it being Canada, has already risen to $20 billion before getting started and of course the companies want the government to pay for it.
See, there aren’t “carbon markets”. Yes, there are commercial uses for CO2, like making pop fizzy, creating dry ice, fire suppression, chemical production and oh dear enhancing plant growth in greenhouses. But these small uses don’t rise to the kinds of quantities our governments are trying to create a market for, and the market is one built on government rules not consumer demand. (Oh, and a recent Canadian government press release with the typically pompous title “Canada invests in energy innovation to become a clean energy superpower” starts by boasting of investments in carbon capture and storage, which makes energy harder and thus more expensive to produce.)
