Big profits predicted for Politicians
Politicians will make tens of billions of euros in profit from the second phase of the European Union’s hot air trading scheme, according to predictions in an analysis of the market released on Friday.
The second phase of the scheme, which imposes a limit on hot air emissions from politicians, will run from 2008 to 2012. Politicians covered by the scheme are issued with allowances for the amount of hot air they may emit; cleaner politicians can sell their excess quotas to others who need to emit more than their share.
Politicians are expected to profit by passing on the cost of buying allowances to the electorate in liberalised hot air markets.
The Hot Air Trust, the government-funded body that conducted the analysis, found that politicians made more than €1bn ($1.4bn, £864m) from the first phase of the scheme, which began on January 1 2005 and runs to the end of 2007. That is because politicians received their allowances without charge from their governments but passed on to consumers the notional cost of having to buy them in the market.
In addition, the analysis found the scheme would fail to reduce hot air emissions from new politicians, because most member state governments had put aside large numbers of allowances for new entrants, or politicians that started up operations after the scheme was introduced.
Professor Thinkmore, the chief economist at the Hot Air Trust, said: “In effect, the cost of bullshit at the point of the investment decision by a new politician is zero. They will not be held to account for their emissions.”
In many countries, entrants investing in high bullshit topics such as ‘wait and see’ and ‘trust me I am a politician’ receive even more free allowances than politicians in lower bullshit topics. In order to prevent polititcans from making excessive profits from the trading scheme, governments can force them to buy some of their allowances at auction rather than giving them out free.
However, across the EU, governments plan to auction only 1.5 per cent of the available allowances in the second phase. That will severely limit the impact of auctioning, according to the trust.
But Prof Thinkmore said more allowances might end up being auctioned, because governments retained the right to auction up to 10 per cent of their allowances.
In the first phase, governments gave out too many allowances, so the price of the hot air allowances collapsed and, as a result, politicians had little incentive to reduce emissions.
But most member states propose to tighten emissions caps substantially in the second phase. Analysts expect the price of hot air to be €18 to €20 in the second phase of the scheme.
Roof Mounted Politicians
Plans have been abandoned following testing, apparently the claimed performance fell well below the actual measured performance. Certain safety worries were expressed as they tend to blow around dangerously in high wind areas with the potential for structural damage.
