California cap and trade puts 'caring' guys like Deutsche Bank, already raided in European cap and trade scandals, in a perfect spot

Deutsche Bank was one of 68 big investors to finance the California cap and trade bill (FT article linked in FP article). If they 'care' about climate, that means they're 'good,' right? "Deutsche Bank, RWE raided in German probe of CO2 tax."Lehman Brothers put all their might into pitching climate 'investments' and they're now bankrupt.

12/17/10, "Cap-and-Trade tosses an anchor to drowning California," IBD by Chuck DeVore

"The eventual selling of greenhouse gas allowances opens up an avenue for abuse. New York, New Jersey and New Hampshire are part of the Regional Greenhouse Gas Initiative (RGGI),

• a mirror of California's Western Climate Initiative with six other states and four Canadian provinces.

Rather than spend gas allowance funds on energy specific projects, as intended, all three Eastern states have raided climate funds for a more mundane purpose: balancing their budgets, with the total diversion to date exceeding $158 million.

• Given California's budget history, cap-and-trade will soon become cap-and-tax.

The Western Climate Initiative itself offers an opportunity for fraud on a massive scale. Its purpose was to decrease the cost of reducing emissions by letting each region play to its strengths:

• the Northwest has abundant hydropower while California has strong solar energy potential, so it makes sense to exchange the two.

Or so the theory goes.

In practice, British Columbia, through its government-owned utility BC Power, has been

• scamming California consumers.
  

BC Power, hit with a fine for its role in California's Enron-era electricity scandal,

• has been selling "green" hydropower to California for years.

Then, in an act of electron-laundering, has backfilled its electricity deficit with coal-fired power from Washington state and Alberta. This lets Californians feel good about their electricity

• while netting Canadians a healthy profit.

Another misapplication of California's cap-and-trade effort will come in the guise of

• "environmental justice."
  

Since cap-and-trade's main purpose will be to increase the cost of energy, this increased cost

• must be borne by California's consumers.
  

Environmental justice's purpose would ensure that favored political groups will have these higher energy costs subsidized by state programs

• to insulate them from the pain.

Los Angeles lawmaker Kevin De Leon tried such an approach with last year's AB 1405. Vetoed by Gov. Arnold Schwarzenegger, De Leon's bill sought to set up the California Climate Change Community Benefits Fund, its purpose being to skim money raised by selling GHG allowances to give to socioeconomically "disadvantaged communities."

• CARB appears set to let up to 8% of the greenhouse gas reductions be met by purchasing "offset credits."

These credits would likely be bought when firms find it difficult or costly to purchase allowances from within California.

• The trouble arises in that these credits
  

• may be purchased from developing nations.
  

Experience shows that such transactions are rife with fraud, as

• the Third World lacks the transparency and rule of law needed to ensure compliance.

In addition, offset credits will encourage the flow of capital out of California, where it is needed to create jobs,

• and into often unproductive uses in developing nations."...(like graft, ed.)
  

"Lastly, to be successful, California's greenhouse gas reduction effort

• must drastically overhaul transportation.
  

California's GHG emissions challenge is unique among the states in that only 20% of California's emissions come from the electrical sector

• while 50% are generated by transportation.

With its benign climate, California is America's most electrically efficient state and

• gets only one-sixth of its electricity from coal
  

• compared with the national average of 50%.
  

On the other hand, Californians don't live in dense urban centers; they like their cars and their freedom to travel. As a result, CARB's proposed regulations hit oil refiners

• and drivers particularly hard.

Under AB 32, California refiners must begin to comply with a low carbon fuel standard in 2011, reducing the "carbon intensity" of transportation fuels by 10% by 2020.

This can be done by increasing the amount of ethanol used in fuel (and, when generated by corn, likely has a net negative impact on the environment), by increasing hydrogen-powered vehicles (extremely costly), placing more electric cars in service or by reducing the carbon intensity of the crude oil used in refining.

• This last alternative entails reworking California refineries so they can lower carbon-intense, non-California crude for their feedstock, a vastly expensive and uncertain proposition that may force the closure of some California refineries.

Finally, due to burdensome reporting and compliance requirements, California refiners will be at a disadvantage to out of state and foreign refiners, putting added pressure on these big in-state employers

• to shift their operations out of California and making California more reliant on energy imports.

With California's adoption of its low-carbon fuel standard, some analysts are forecasting a

• gasoline price shock of 30% to 80% in five years.

With Congress appearing set to end corn ethanol subsidies, this cost may go higher, hitting California families for an additional

• $570 to $6,500 per year, according to the George C. Marshall Institute.

CARB's new cap-and-trade rules will place yet another load on California's teetering economy. Yet with AB 32 the law of the land, CARB has little choice, other

• than encouraging an ambitious program to build modern nuclear power plants to reduce California's carbon footprint.

A likelier course will be the repeal of AB 32 before the end of the decade as Californians come to realize that the Golden State's go-it-alone approach to reducing transportation-fuel carbon intensity

• isn't immune to the laws of economics or physics."

"• DeVore served in the California legislature from 2004 to 2010. Before his election he was an aerospace industry executive. He is a retired Army lieutenant colonel. He was a candidate for the Republican nomination to the U.S. Senate in California this year."

Deutsche Bank buys and installs 'carbon counter' as catastrophic sales aid in midtown Manhattan to advance their financial interests in 'climate.' 6/18/09, Reuters and photo.

• From the Reuters article, MIT person says the 'carbon counter' it's a new way of "communicating climate science to the public."

• (As for MIT's involvement, some of their geniuses lost big money in the Madoff scandal).

• As of 6/19/09, Google had over 29,000 entries for Deutsche Bank's carbon trading investments.

The very rich people supporting this takeover of the United States got rich not by being good people. There is at least one convicted criminal among them. They're bullies without conscience who have sold a pitch to weak, emotionally vulnerable people. There isn't enough money in the world for them. ed.

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via Tom Nelson