All round the world thousands of greenonomists recommend a “free market solution” to our so called pollution problem. But as I keep saying: this “free market” isn’t free. It’s a pale pathetic imitation: a “managed market”.
In Europe, if a factory produces CO2 (what factory doesn’t?) it can pay people in China and India to not produce an-equivalent-amount-of-CO2. Sounds sort of fine in intent except that paying people to not do something they were-going-to-do depends on knowing the future (and reminds us of a process known as extortion). That’s loophole number one. Officially it’s called “additionality”, which is a fancy way of saying people wouldn’t do something-in-particular to reduce emissions unless they got paid in carbon credits.
The Chinese and Indians, not being stupid, immediately gamed the system. Why wouldn’t they?
The irony of unintended consequences. Here’s how it goes: HFC-23 is the godfather of greenhouse gases: it’s 11,700 times as powerful at warming as CO2 is. The chemical makers are paid as much as $100,000 in carbon credits for every ton they destroy… Suddenly making-and-then-destroying HFC-23 is very valuable business, so people rush to fill this “demand”. HFC-23 is a [...]