Yet Another Example of How Financializing Policy Screws Things Up

Case in point, the collapse of the UN's global cap and trade system:

The world's only global system of carbon trading, designed to give poor countries access to new green technologies, has "essentially collapsed", jeopardising future flows of finance to the developing world.

Billions of dollars have been raised in the past seven years through the United Nations' system to set up greenhouse gas-cutting projects, such as windfarms and solar panels, in poor nations. But the failure of governments to provide firm guarantees to continue with the system beyond this year has raised serious concerns over whether it can survive.

A panel convened by the UN reported on Monday at a meeting in Bangkok that the system, known as the clean development mechanism (CDM), was in dire need of rescue. The panel warned that allowing the CDM to collapse would make it harder in future to raise finance to help developing countries cut carbon.

Joan MacNaughton, a former top UK civil servant and vice chair of the high level panel, told the Guardian: "The carbon market is profoundly weak, and the CDM has essentially collapsed. It's extremely worrying that governments are not taking this seriously."

The panel said that governments needed to reassure investors, who have poured tens of billions into the market, by pledging a continuation of the system, and propping up the market by toughening their targets on cutting emissions, and perhaps buying carbon credits themselves.

Yep, we need to bail out the banksters in order make this policy work.  Our government has to manipulate the market for their benefit.

The real reason that the "very serious people" support cap and trade over a carbon tax is because they went to the same elite schools as the people at the big banks, so they have to structure this policy so to allow their friends to stand athwart the goal of reducing emissions and extract rents.

If you applied a carbon tax, and applied it to imports in the same way that the VAT is applied to imports, you would get the same result, only you would not have the parasites in Wall Street and the City taking a slice from the rest of us.