Carbon dioxide a gov't-made commodity

Monday, November 26, 2012
 | 
Becky Yeh - California correspondent (OneNewsNow.com)

According to one analyst, a cap-and-trade market creates a government-made commodity out of a naturally occurring gas to regulate and tax businesses.

The California Air Resources Board has announced that a ton of carbon sold for $10.09 at the state's first private cap-and-trade auction of "pollution allowances"-- a few cents higher than the $10 minimum set by the board. Officials call the auction, which kicked off the state's cap-and-trade market, a success. In total, roughly $290 million was spent on carbon credits.

Borelli, Tom (FreedomWorks)Tom Borelli, a senior fellow at Freedom Works, thinks the auction was pointless.

"Carbon dioxide is a natural-occurring gas; there's nothing really special about it -- it's ubiquitous," he points out. "And now because of government action, they are trying to make this have a value.

"But the value is only due to the state of California's decree. There's no inherent value in carbon dioxide. It's not like a diamond; it's not like gold; it's not like copper -- even pork bellies or coffee."

Borelli is uncertain whether the price of a ton of carbon will remain $10, as it is possible that California's entire cap-and-trade market could eventually fall apart.

"If the whole system falls apart, because again it's due to government action, then the billions of dollars, the hundreds of millions of dollars that are being used to buy these credits -- they could turn out to be worthless," the analyst poses. "So at the end of the day, companies could … really get stuck with this certificate of nothing that's worth … any value, because it's essentially hot air."

During the first auction, companies bid as much as $90 for a ton of carbon. The state's new cap-and-trade system is a provision of a global-warming law passed in 2006 that seeks to cut emission of greenhouse gases.

We moderate all reader comments, usually within 24 hours of posting (longer on weekends). Please limit your comment to 300 words or less and ensure it addresses the article - NOT another reader's comments. Comments that contain a link (URL), an inordinate number of words in ALL CAPS, rude remarks directed at other readers, or profanity/vulgarity will not be approved. More details

SIGN UP FOR OUR DAILY NEWSBRIEF

SUBSCRIBE

VOTE IN OUR POLL

Who won the first presidential debate Monday night?

CAST YOUR VOTE

GET PUSH NOTIFICATIONS

SUBSCRIBE

LATEST AP HEADLINES

  Israel mourns as preparations begin for Peres' funeral
NAACP head wants people to ignore Keith Lamont Scott's past
Black man charged in racially-motivated Charlotte parking deck assault on white man
  Deal reached to keep US government running, help Flint
9 states to vote soon on expanding legal access to marijuana
California blaze burns aggressively across steep terrain
  Moore goes before ethics panel on gay marriage order

LATEST FROM THE WEB

The real agenda behind Charlotte's 'peaceful' protests: Anti-white, anti-American values
Lester Holt learns his Lauer lesson
The Ferguson effect in Ferguson
Hillary, interrupted
Black man who dislikes cops stunned by white trooper's action

CARTOON OF THE DAY

Cartoon of the Day

REASON & COMPANY

NEXT STORY
Hospitals will see massive layoffs, decline in 2013

Hospitals are expected to cut some 93,000 jobs in 2013 in anticipation of ObamaCare. A former presidential candidate and conservative advocate says America needs to prepare for major changes in the medical industry.