It’s all over and not a single one-world government in sight.
What a lot of fuss about nothing.
It makes one thing pretty clear. The threat of Climate Change really can’t be as bad as the pollies have made out. I mean, if doing nothing really will lead to catastrophic flooding and the near-end to the world then you’d think they’d come to some sort of agreement.
Anyway, aside from that, the outcome of the Copenhagen Conference at least proves that if Climate Change does exist then it most certainly won’t be ‘cured’ by politicians at conferences.
In fact, the Copenhagen Conference provides a perfect example of how consensus politics will always lead to failure, and how the only solution to Climate Change – if one is required – is to leave it to a free and un-manipulated-by-government market.
How so? Well, let’s look at a comparison of a market place and consensus politics.
If you think about it logically, in theory they are both similar.
Consensus politics involves a bunch of people getting together and thrashing out ideas. You get people from the right, the left, the middle and all others from right across and beyond the political spectrum.
They each put forward their ideas – no government involvement, maximum government involvement, no taxes, high taxes, no subsidies, high subsidies, etc.
Then they negotiate on it for several days and weeks until they come out with a statement such as the following that was released at Copenhagen:
“1. Decides to extend the mandate of the Ad Hoc Working Group on Long-term Cooperative Action to enable it to continue its work with a view to presenting the outcome of its work to the Conference of the Parties for adoption at its sixteenth session;
2. Requests the Ad Hoc Working Group on Long-Term Cooperative Action to continue its work drawing on the report of the Ad Hoc Working Group on Long-term Cooperative Action presented to the Conference of the Parties at its fifteenth session,1 as well as work undertaken by the Conference of the Parties on the basis of that report;
3. Mandates the host country of the next session of the Conference of the Parties to make the necessary arrangements in order to facilitate the work towards the success of that session.”
In other words, “Since nothing has been decided on at the fifteenth session of the Conference of the Parties (COP15), we’ll all meet again at another conference, how about we call it the sixteenth session of the Conference of the Parties!”
And on it goes. All the time the world is warming and cooling and doing whatever else it does.
So, apart from the fact that bureaucrats get to go to another fancy location, the result of any political conference built on consensus, is that everyone – yes, everyone – walks away disappointed.
Those that wanted less will be disappointed the whole sorry affair is still going. Those that wanted more will be disappointed they haven’t got what they came for.
I mean, no-one will have gone to Copenhagen looking to achieve this exact outcome – apart from the pen pushers.
Is there anything that’s been achieved? From what we can make of the Copenhagen Accord, the one thing it has done is to put Western nations on the hook for USD$100 billion each year by 2020.
And that “A significant portion of such funding should flow through the Copenhagen Green Climate Fund.”
In other words, the United Nations has managed to get funding for another useless body that will receive billions of dollars, be accountable to no one, and will be rife with corruption, mismanagement and fraud.
The UN oil for food programme is a perfect example of fraud, corruption, theft and any other criminal activity you can think of.
All in a day’s work for any publicly funded organisation really.
Anyway, back to our comparison. If that’s the best the pollies at a conference can come up with when everyone is sat down trying to knock together a deal, what chance does an uncoordinated ad hoc free market have?
After all, a free market is just a bunch of people doing their own thing and just intermittently interacting with others. Surely nothing could be achieved using that method.
That’s the difference though isn’t it? Because where as no one walks away happy from a deal made through consensus politics, in a deal hatched out under a free market almost everyone walks away satisfied.
But before I take the comparison any further, let’s make one thing clear. We’re talking about a proper free market without the interference of governments and bureaucrats. We’re not talking about the manipulated and distorted un-free market of Wall Street bankers and central banks setting interest rates where they feel like it.
No, I’m talking about a proper free market where no one is compelled to get involved. Where people only get involved when they believe they can get an acceptable deal.
In a free market buyers and sellers can meet and negotiate a deal on their own terms that are satisfactory to the buyer and seller.
If the buyer isn’t happy then they can try and negotiate with another seller.
We can use the stock market as a reasonable example. I’ll agree it’s not completely free of manipulation, but in terms of being able to see buyers and sellers meet in a market place it’s as close as we’ll get.
Below is a summary of the market depth on BHP Billiton this morning:
In one way you can say the market has reached a consensus that BHP is fairly priced around $41.135. It’s a price at which many buyers and sellers are prepared to transact.
However, the difference in a free market compared to a political consensus is that no-one is forced to agree to the price. In a free market if you believe $41.20 is a better price to sell at then you can wait for someone to pay up.
The problem at Copenhagen is that the desire to get something which everyone could agree to means that nothing was done. Nothing has been transacted because no one is prepared to pay the “price” on offer.
You can see from the market depth of BHP above that all sorts of investors have a different idea about what is a fair and reasonable price. Imagine if shares could only be bought and sold if every single buyer and seller had to agree on one price with no exceptions.
Not surprisingly there would be a deadlock. There would never be any trades.
That’s the problem with Copenhagen. The participants would have had similarly different ideas about what makes a fair and reasonable outcome.
The trouble is, under a manipulated system such as that at Copenhagen there isn’t a free market where the parties are free to strike deals among themselves. It’s an all or nothing deal.
Unless a “price” can be agreed upon by everyone then nothing gets done. Compare that to the price of BHP where it only takes two people at any one time to come to an agreement and a transaction can be made.
And that’s exactly the point we’ve made all along. Your editor is clueless about whether Climate Change is genuine or not. But there is one thing we know as a fact, and that’s if the pen pushers, pollies and Stable Climate Deniers really do want a solution to Climate Change the only way to achieve it is to allow a free market to determine the price of everything.
Once that happens, the market (that is, individuals) will determine how serious a threat Climate Change is.
If, as opinion polls tell us that the majority believe Climate Change is genuine then the majority will make free and informed decisions on how they resolve it.
And even the non Climate Change believers will benefit as well. Even if you don’t believe in Climate Change, odds are you’d start to use ‘green’ fuels if they became cheaper than fossil fuels.
Everyone would be able to make a free decision to use non fossil fuels. Businesses involved with ‘green’ energy would receive more private funding rather than having to suffer the whim of politicians who one minute provide a government subsidy then the next take it away and give the subsidy to the coal and gas industry.
It’s no wonder ‘green’ fuels make such a pathetic contribution to energy. Why would anyone invest in the industry when you know the entire future of ‘green’ energy can be destroyed at the stroke of a bureaucrats’ pen?
As we’ve mentioned before, very few people intentionally choose to pollute the environment. Given a free market choice between polluting your own air and not polluting it, only a mentalist would choose the latter.
It’s because of the involvement of government, high taxes and the lobbying of big businesses with vested interests that individuals are forced to consider the cost to their wallet first and the cost to the environment second.
Push the government aside and reduce the tax burden, suddenly the power of the lobbyists is destroyed and the individual can make a true free market decision.
What are the odds on that happening? Somewhere north of 1,000 to 1 at the moment.
That’s why you can look forward to the same hullaballoo as COP16, COP17… COP42, etc,. waste more time, effort and taxpayer money and end up achieving absolutely nothing.
Cheers.
Kris.
60-Second Market Round Up
by Shae Smith
The S&P/ASX200 closed down by 0.42% to 4,650.50. A positive lead from the US has seen the Aussie market open 20 points up this morning. Being the time of year it is, volumes will be pretty thin for this week.
The Dow Jones Industrial Average finished higher on Friday night, up by 20 points to 10,328.89. Technology stocks were the main leaders with Microsoft [NYSE: MSFT] and Hewlett-Packard Co [NYSE: HPQ] adding about 2.9% each. Find out else was up in the US here.
In UK on Friday, the major banks dragged the FTSE down, closing at 5,196.86, lower by 20 points.
The Nikkei finished the day down to 10,142.05 lower by 21 points.
Gold is higher this morning, but it is still experiencing choppy trading sessions.
The price of spot gold in Australian dollars is trading at $1,249.56 while in US Dollars it is trading at $1,112.50. The price of silver in Aussie dollars is $19.43 and in US Dollars it is $17.30.
The Aussie dollar versus the US dollar is trading at USD$0.8890, and against the Japanese Yen JPY80.48
Crude oil has been slowly sneaking up higher, closing at USD$73.36. Tension between Iran and Iraq has increased since Iranian troops have crossed into Iraqi oilfields.
For the biggest movers on the market yesterday click here…
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That’s true, CB. There are probably dozens of energy solutions out there that could put us on the path of better sustainability. But the point is that they are going to struggle for oxygen as long as oil is plentiful and cheap. With peak oil, it will still be plentiful, but it won’t be as cheap.
This is where I think something like a carbon price could be useful. If the market was left to its devices, we’d continue to burn oil, coal and gas with gay abandon because nothing else approaches them in terms of energy efficiency. The market would only contemplate switching to other alternatives when the price of fossil fuels becomes ridiculously high and/or it’s patently obvious that supply is clogging up. Renewables don’t get a look in at the moment because oil and coal are just so cheap in comparison.
Nothing wrong with that, except for the fact that it’s taken us 200 years to evolve our economy to where it is now based on fossil fuels. If peak oil hits around 2050 (for example), I don’t like our chances of re-tooling the economy in less than a quarter of the time we’ve taken to get where we are today.
Tim – what are you on about?
Are you some kind of left wing lunatic?
Ralph – I want you to take a hammer and chisel and put a mark on the wall because this is probably the first time we have been in complete agreement…..
It’s not a matter of getting it right the first go, it is a matter of putting the rewards and punishments in place to force industry to invest in cleaner energy, and then allow some smart guy to devise a way.
If you guys remember the “oil crisis” of the seventies and the new “California Vehicle Emission Standards” of that era. It was a sham and quite hopeless at first. They actually pumped air into the exhaust system to dilute emissions to get them to comply to the CO2 level requirements. But from that absolute farcical beginning we now have serious family vehicles that use less than 5 litres per 100 KLM. I know because I drive one and they are getting better daily.
The carrot and a stick method works every time.
Yes, and such a scheme would be best if every now and then a sackful of the extra money you are all happy to pay was posted directly to me. And, just for kicks, I would make sure to get meself a car that ran on water……….., with a pinch of salt for good taste, but that’s all.
The expectation is that in NSW we are going to be hit with higher power bills of some 60+% over the course of the next three years. This, at a time when real household incomes are either stagnating or falling. If such be the case, then I certainly would want to know at the very least that my money is going to go directly into R&D, not redistributed by politicians as political bribes and sucked up and syphoned off by bankers, brokers, and other gangsters, bureaucrats and other parasites, which is exactly what would be happening with an ETS of the sort we nearly had to have.
Sometimes there is only a fine line between a decent scheme and a stinky scam, and proposals put forward so far by our politicians definitely stink, and they stink through and through. Show me something decent and genuine and show me how it is going to make us all better off, and I will support it.
I’m cheering!! Peter and I are in agreement. I suspect that agreement is not what we are always seeking, simply because we visit a site like this which deliberately aims to cut against the grain somewhat. But it is nice to see eye to eye every once in a while.
Good result Ralph.
Bye guys I will take a break from the fray, but a merry Xmas to you all, and yes even to you Kris Sayce, I hope you have a good year in 2010.
Thanks for not “kicking out” the fairies who live at the bottom of the garden just because we all disagree on almost everything. We must surely provide you with some stories to dine out on at times.
Have a good 2010 guys…
Thanks, PF. Likewise to you, and all.
and from me as well gentlemen a happy and safe Christmas and may the new year bring you and yours good health.
sorry Sandra, that includes you and all the lady readers.
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