The following is an excerpt from OpinionJournal.com’s “Best of the Web” written by the editor, James Taranto.
It’s Always in the Last Place You Look
“Iowa Kmart Workers Open Tin Can, Find $10,000”–headline, Associated Press, Dec. 7
Kill Jobs, Get Rich–What’s Not to Like?
The EU Referendum blog has a fascinating story on how Cap’n Trade–or, as it’s called in Europe, the “emission trading scheme”–works. It seems that the Corus Group, a London-based steel maker that is a subsidiary of India’s Tata Group, is shutting down one of its plants–a plant the company bought just two years ago “as part of its strategy to give it better access to European (including UK markets) [sic].”
Closing the plant, the site explains, will give the company an ETS jackpot:
With redundancy and decommissions costs, very little of that can actually come from the process of closing down the Redcar plant. But, with a capacity of 3,000,000 tons of steel, closure of the plant will deliver further “savings” over 6 million tons of carbon dioxide, worth an additional £80 million per annum at current rates but around £200 million at expected market levels.
This, even for a company the size of Tara steel, is a considerable windfall, over and above the money it will already make from the EU scheme. But, with a little manipulation, the company can still double its money. By “offshoring” production to India and bringing emissions down – from over twice the EU level–to the level currently produced by the Redcar plant, it stands to make another £200 million per annum from the UN’s Clean Development Mechanism.
Thus we see Indian plants being paid up to £30 a ton for each ton of carbon dixoide “saved” by building new plant, while the company which owns them also gets gets paid £30 for each ton of carbon dioxide not produced in its Redcar plant. That gives it an estimated £400 million a year from the closure of the Redcar plant up to 2012–potentially up to £1.2 billion. And that is over and above benefitting from cheaper production costs on the sub-continent.
So the company gets a windfall for moving jobs from Britain to India, and the new plant will produce no less carbon than before. Brilliant, isn’t it? We can’t wait till America has such a policy.
For more “Best of the Web” click here and look for the “Best of the Web Today” link in the middle column below “Today’s Columnists.
