Senator James Inhofe of Oklahoma, who made the trip to Copenhagen to tell delegates the American public is rejecting a national energy tax, opined that the UN climate change conference was a failure in USA Today. The market agrees with him. As expectations for a legally binding treaty to reduce greenhouse gas emissions fell, so did the price of carbon:
“European and United Nations carbon prices fell the most since February after the Copenhagen climate accord didn’t set targets that would boost demand for permits.
European Union carbon-dioxide allowances for delivery in December 2010 declined 8.3 percent to close at 12.45 euros ($17.82) on the European Climate Exchange in London. Today was the first day of trading since the summit concluded Dec. 19.
The agreed targets in the Copenhagen deal amount to a “bunch of negotiation ranges” that investors had already factored in, Trevor Sikorski, an emissions analysts for Barclays Capital, said in a phone interview after returning to London from the Danish capital. “It seems to be below even our modest expectations.”
The fall in the carbon market is very symbolic of the two week climate summit. Drummed up to be the next big climate treaty to globally reduce carbon dioxide emissions, Copenhagen was a failure, both procedurally and in its attempts to create a treaty. Although it will inevitably be spun as a significant step forward, it produced no legally binding agreement but instead an additional 40,500 tons of carbon dioxide. One friend put it like this: “I’ll believe global warming is an imminent threat to our health and the environment when those telling us to reduce our emissions start video-conferencing these summits rather than traveling on their private jets.”
Not only has the market responded to the failure of the Copenhagen conference, but the public is responding with skepticism to global warming – or the lack thereof. The American Enterprise Institute’s Karlyn Bowman summarizes four polls taken throughout the year that shows the public’s waning support for serious action on global warming. She offers the economy, Republicans rallying against Obama and the public’s confusion over the term “cap and trade” as reasons for falling support, and also highlights the public’s contempt for global warming alarmists continuing to cry wolf:
“People may simply be tired of hearing about the coming climate apocalypse. Only 28% in the new Harris poll knew that the subject of a major international conference in Copenhagen was climate change, demonstrating that although they’ve been bombarded with information by a sympathetic press, people just aren’t paying attention. In addition, media credibility is very low these days, and many Americans may simply be discounting what they read about climate change, especially after the recent climategate scandal. All in all, bad news for the activists.”
But good news for the economy and the market. Except the carbon market.
For all of Heritage’s work on Copenhagen, visit our Copenhagen Consequences Web site.