ENERGY AS CR
CR stands for Carbon Rights. Energy as CR (Carbon Rights) seems a good model to transit away from a fuel demanding energy system to a fuel-free energy system. The problem is that carbon rights are total virtual assets, with only remote distance to sources and thereby absolutely vulnerable for fraud. The Energy as FIC model is much more better that the Energy as CR model, as the Energy as FIC has the grid as measuring tool and thereby can not be canartisted in any way. Of course some companies likes the CR model: it can be manipulated in many ways. But the CR model is just wind trade: it must make international 'carbon right' trade possible. CRs are not easy to verify value papers. CR trade is just another step in wrong ways of financial engineering: as it makes business not more, but yet less transparent. Another huge downside of the CR model is also designed to subsidize nuclear fission investments, just as the whole CO2 discussion is designed in the '80ties to make environmentalists (who at that time were anti nuclear fission) to change in to nuclear fission energy endorsers and propagandists. The CR model is based on a misconception: that CO2 is bad. This misconception has much more to do with the size of Al Gore's feature movie attributes (the famous CO2 ladder) than with the real effects of CO2. CO2 is nothing more and nothing less than an atmospheric type of fertilizer. The concept of CR is the wrong answer on the wrong question. It is not the surplus of CO2 we should fear, it's the deficit of it. The end of cheap and abundant fossil energy that could cause our economies to decline and our financials and governments to collapse. Fossil energy will be expensive, we don't need the CR model for that: it's just a result of more expensive exploration and refining. We used by the law of economics the easiest to explore and to refine resources first, now we are approaching the more hard second half of the resources. This (that the second half is harder -and thereby more expensive- than the first half is something we don't understand very much as mankind. Just like we don't understand the increasing demand (as in: increasing purchase power) of the emerging nations. The west is quite narcissistic in their global perception. The new reality on purchase power is not landing at all in the west. This has neo-colonial roots: the misplaced superiority feelings steers the Western World in dead-ended energy streets. Concluding: a) the CR model is vulnerable for fraud as it has no direct link (which the FIC model has), b) the CR model will be used to subsidize the parasitic nuclear fission industry (all costs of security, all costs of waste, all costs of destruction are for the society, plus they can get insurance, so pragmatic as governments are: they may operate without it). Germany has demanded from Vattenfall a corporate 'parent guarantee' for a nuclear fission power plant: that's smart behaviour that ends the wrong and not sustainable privatizing profits and socializing loses development. There are other reasons why the CR model is not adequate: it delivers no transition / no alternatives: it just taxes. More tax is not acceptable, we don't need more taxes, we need more changes. We need heading to a renewable energy model. The CR model is thereby no foundation for renewable energy business cases at all. Just due weak foundation of it. The CR model is based on the CO2 myth and the days of the CO2 myth are ending. The Energy as CR model is heading towards less transparency while the economy and thereby financials and governments are under pressure of the market and society are heading towards more transparency. Energy as CR is therefore just the wrong direction. Energy as CR is not capable of generating a massive energy transition investment wave.
Author: Gijs Graafland
Back to index page of Energy Finance
Download the full Energy Finance report in PDF