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Generational Dynamics Web Log for 16-Dec-07
UN Climate Change conference reaches a compromise agreement

Web Log - December, 2007

UN Climate Change conference reaches a compromise agreement

The two-week conference at the Bali beach resort ended Saturday, with the United States caving in on some of the demands of the "developing nations," resulting in a compromise agreement.

The worst of the demands, setting numerical requirements on carbon emissions, was avoided by means of the persistent refusal of the US delegation to accede.

As we described a couple of days ago, investment bankers have been lobbying for these demands, because the resulting "carbon credit" system could be turned into money-making scam like the subprime mortgage securities. Apparently the financial engineers at these banks, led by Louis Redshaw at Barclays Capital in London, have figured out a way to turn these carbon credits into derivatives. I don't know the details, but it's probably something like derivative securities that "bet" on whether or not a particular country will meet its emission targets by some date. The financial engineers would then turn these into AAA rated CDOs. The banks would make billions by taking fat commissions off the top, and everyone else would get screwed, same as with mortgage-backed securities.

The numerical targets were NOT agreed to, infuriating the "developing nations," who have been hoping to use "climate change" as a political vehicle to demand money from the United States. Last time, we quoted a bitter, angry spokeswoman for environmental groups saying, "There is a wrecking crew here in Bali led by the Bush Administration and its minions. Those minions continue to be the governments of Canada, Japan, Saudi Arabia and others, with unfortunately Australia shadowing that group of minions."

As I said the last time, this banking scheme doesn't have a snowflake's chance in hell of being approved, largely because investors will not fall this scam after falling for the subprime mortgage scam.

Another demand was for an "Adaptation Fund," where the US would pay "developing nations" to curb emissions. This fund is supposed to start in 2008, but it's a lot smaller in scope than the carbon credit scheme.

As I understand it, the turning point in the conference came when the South African delegation bitterly denounced the US for refusing to compromise. Now, the sainted Nelson Mandela has been going around comparing Bush to Hitler, and so as far as I'm concerned the South Africans can take their denunciations and shove them.

Nonetheless, the South Africans' denunciations were met with wild applause by the other "developing nations" delegates, and the US finally acceded on this point.

It's highly doubtful that anything will come of this farce. In the end, the compromise agreement was more an agreement to have more conferences in 2008, with a final agreement to be worked out in 2009. It'll be interesting to see which politicians sign on to these nutty proposals during the Presidental campaign.

In the meantime, despite all the sunning and surfing and bickering and political one-upsmanship, this isn't about anything but money. There isn't a single credible proposal for any country to reduce its carbon emissions by any amount at all. (16-Dec-07) Permanent Link
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Generational Dynamics Web Log for 16-Dec-07 UN Climate Change conference reaches a compromise agreement

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Generational Dynamics Web Log for 16-Dec-07
UN Climate Change conference reaches a compromise agreement