Final Word from Monday, July 2, 2007

When governments want to raise taxes quietly, one indirect way is to print money; when they want to raise the profits of industrial companies and utilities, one direct way is to print carbon credits. These vouchers are issued free and give producers the right to emit a certain level of CO2. Some utilities argue that since the credits can be sold for cash, any that aren't sold and are instead put toward electricity production must bring the same economic effect. Hence they want to raise the price of electricity by the value of the free carbon credits. German Environment Minister Sigmar Gabriel said this is the height of audacity. It hasn't been a big issue in the CR so far, but HN's report today that carbon credits are the source of a shareholders' dispute at Pražská teplárenská heating company suggests that it soon could be. It's probably only a matter of time before we hear that "scarce" carbon credits are one reason for the 20-30% jump in electric rates next year.[Czech Republic ČEZ emissions carbon dioxide Hospodářské noviny]


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