Reuters wrote:[...] the European Parliament's environment committee backed an EU executive Commission plan to wipe out utility windfall profits from carbon trading and transfer up to 30 billion euros ($40.76 billion) to member state coffers.
An Emissions Trading Scheme is supposed to present some dynamic efficiencies, providing incentives for polluters to further reduce their emissions up to a point where the cost of reduction equals the profits from selling permits.
The EU grandfathers the permits - gives them away based on historical trends for each polluter - instead of auctioning them. This way, companies get essentially an asset for free, so they like it. It's a give away.
Now, under this proposal, the profits from the trading are going back to government's coffers? Pardon? What's the point of financing potato producers, then wiping out their gains when the potato prices rise unexpectedly?
Is this a way forward for governments to raise revenue for future projects, to finance the current Keynesian trend in Economics. Is the (promised) American take on tradable permits going to mimic this?
Note: I was going to post this under Environment, but it's the sheer economics of it that's puzzling me; any moderator disagreeing, please accept my apologies and move the post to the right place.
