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Implications Stemming From Copenhagen

BY ROB KIRBY | december 14, 2009

The United Nations’ sponsored Climate Change Conference is currently underway in Copenhagen, Denmark [Dec. 7 – 18, 2009]. The expressed purpose of the meeting is to get a new global climate treaty signed by the 192 countries attending – supplanting the UN's 1997 Kyoto Protocol.

Central to the proposed ‘new treaty’ is the reduction in CO2 emissions under a system coined as cap-and-trade:

Emissions trading (also known as cap and trade) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

It’s All About “New Taxes” – But to Fund What?

Cap-and-trade was proposed to work is a follows: A central authority (like the United Nations) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of credits which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emission allowance must buy credits from those who pollute less. The funds raised by such a scheme were initially widely purported to be a means to redistribute wealth from the industrialized world to the disadvantaged, developing third world.

The conference has attracted more than its fair share of controversy after hundreds of e-mails surfaced between climate scientists at the centre of the climate change apparatus - University of East Anglia in Britain. There is some debate whether these e-mails were ‘leaked’ or ‘stolen’ but the gist of these e-mails show that important data behind the climate change debate has been manipulated.

Bait and Switch and Who Really Gets the Dough

Additional skepticism arose last week when it was revealed by Britain’s Lord Christopher Monckton [member of Britain’s Upper House of Parliament] warned that the secretive draft version of the Copenhagen climate change treaty represents a global government power grab on an “unimaginable scale,” and mandates the creation of 700 new bureaucracies as well as a colossal raft of new taxes including 2 percent levies on both GDP and every international financial transaction.

The London Guardian states things a bit more strongly, reporting;

“The draft hands effective control of climate change finance to the World Bank.”

So it now appears that this massive new system of global taxation will be paid not to the UN, as originally sold [as in a ‘bill of goods’], but directly into the coffers of the World Bank.

This has all the appearances of being the funding mechanism of a World Government run by Banks – not elected and not accountable to anyone.

Perhaps none of us should be surprised. Bankers do claim they are doing “god’s work”, don’t they?

If Signed By President Obama: The Implications for America

From here I would like to shift everyone’s attention to the erudite observations of researcher / writer Mark J. Lundeen and his Dec. 11, 2009 commentary which explains the ramifications of President Obama's proposal that the U.S. cut CO2 emissions by 17% of 2005 levels by 2020:

The White House also announced [Nov. 25, 2009] that, in the context of an overall deal in Copenhagen that includes robust mitigation contributions from China and the other emerging economies, the President is prepared to put on the table a U.S. emissions reduction target in the range of 17 % below 2005 levels in 2020 and ultimately in line with final U.S. energy and climate legislation.

Lundeen’s work outlines how the “dirty little secret” about reducing America's emissions of Carbon Dioxide by such an amount is that it can only be accomplished by driving the American's Economy into a second Great Depression, or worse:

Anyone with even an elementary level of understanding in Electrical theory can prove this point by using Ohm's Law.

For those who don't want to read my brief technical explanation of Ohm's Law relationship [linked] with Carbon Dioxide production, feel free to skip it. But if Ohm's Law is new to you, you should make the effort to understand its "Global Warming" implication. Because what President Obama is committing the United States to, during his visit to Copenhagen, is promising in an economic collapse deeper than the Great Depression's.

The critical point people need to understand is that Ohm's Law tells us that the Electrical Utilities only control their distribution network's Voltage, which by necessity is always fixed and constant. So crafting government regulations from the "Save the Planet" point of view, exactly what would they have the utility do to comply with Carbon Dioxide limiting regulations? Consolidated Edison will be providing current at the same Voltage, in a business as usual manner, before, during and after Carbon Dioxide limiting regulation is enacted. So by necessity, the actual intent of "Global Warming" regulations has to be directed at the consumers of Electrical Power, those who turn electrical devices on and off. "Global Warming" regulation is intended to force the private sector to turn things off, and keep them off.

Lundeen points out: “If President Obama commits the US to a 17% reduction of Carbon Dioxide below its 2005 Levels. This can only be accomplished by reducing Kilo-Watt consumption by 17%. And this can only be accomplished by regulating consumers of Electrical Power, not the Utilities. The successful implementation of "Global Warming" regulations will result in a reduction of economic activity not seen since the Great Depression.”

Here’s what the current recession has done to America’s consumption of electricity to date:

And here’s what President Obama’s proposed 17% CO2 reductions would MANDATE for U.S. electricity consumption by 2020 for comparison purposes:

The implications of President Obama signing on to the proposed Climate Change Treaty in Copenhagen – committing the U.S. to 17% CO2 emissions reductions by 2020 – do not imply a robust economic picture for America going forward. If the treaty is signed “as proposed,” it’s quite likely there will be little to no power to fuel an American economic recovery or expansion.

Today’s Market

Overseas equity markets began the week on a quiet note with Japan’s Nikkei Index losing 2 points to close at 10,105. North American markets fared better with the DOW ahead 29.5 to 10,501, the NASDAQ up 21.79 to 2,212.10 and the S & P gaining 7.70 to 1,114.10. NYMEX crude oil futures fell .19 to 69.68 per barrel.

Benchmark 5 yr. government bonds ended the day at 2.29% while the 10 yr. bond finished the day at 3.55%.

On foreign exchange markets, the U.S. Dollar Index dropped .23 to 76.35.

Precious metals did better across the board with COMEX gold futures adding 9.00 to 1,125.10 per ounce while COMEX silver futures added .21 to 17.37 per ounce. The XAU Index added 1.84 to 174.28 while the HUI Index gained 5.67 to 449.33.

On tap for tomorrow, at 8:30 a.m. Nov. PPI data is due – headline number expected +.6% vs. prior +.3%. Core PPI expected +.1% vs. prior -.6%. Also at 8:30 a.m. Dec. Empire Manufacturing data is due – expected 21.00 vs. prior 23.51. Then at 9:00 a.m. Long-term TIC flow data is due – expected 38.7B vs. prior 40.7B. At 9:15 a.m. Nov. Capacity Utilization data is due – expected 71.4% vs. prior 70.7%. Also at 9:15 a.m. Nov. Industrial Production data is due – expected +.7% vs. prior +.1%.

Wishing you all a pleasant evening!

Rob Kirby
Registered Representative

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Rob Kirby
Kirby Analytics Newsletter | Toronto, Ontario, Canada
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