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« How to create global warming | Main | Disguises »

Carbon trading

The man from Whitehall, we have been told, really does know better - not a conjecture that's borne out by this story in the FT.

The government department spearheading Britain's effort to reduce carbon output is driving companies and individuals towards paying for emissions cuts that do not take place.

The Department for Environment, Food and Rural Affairs is also about to publish final details of a trading scheme that was set up to encourage companies to reduce their greenhouse gas emissions which led to only four taking £111m of taxpayers' money between them.

And this isn't the half of it. The FT is mistaken when they say:

Defra is also set to publish soon details of the UK Emissions Trading Scheme, which was set up with £215m government funding to encourage 34 participating companies to cut their emissions.

This is not actually true. At the time the grant was made from the Treasury, DEFRA were telling them that they expected the financial benefits of the scheme to outweigh the costs for between 420 and 3100 firms. The clear implication was that this was the number of participants they expected. So the £215m was to encourage between 420 and 3100 companies to take part, not 34.

When DEFRA got round to actually asking companies if they wanted to be involved they got the grand total of 30 (!) responses from the 5000 questionnaires they sent. Now, confronted by this problem, you or I would scale back our demands for cash from the Treasury proportionately. A memo would have been sent saying that we now only needed £215m x 34/3100 = £2.3m, a saving of some £212m.

But in the crazy world of Whitehall, this isn't the way things happen.  The money was simply divided between those who bothered to apply, with the amazing payouts to the favoured four outlined above as the result.

And, as is traditional in the mandarinate, Brian Bender, the civil servant in charge of the DEFRA, came out of it all with a knighthood and the top job at the DTI. It's not clear if this reward was for the £212m he wasted on the carbon trading scheme or for his great triumph, the farm payments fiasco, which clocked in at an impressive £500m. If it takes the best part of a billion to get a K, it makes you wonder how much Robin Butler threw away to get his P.

The man from Whitehall really does know bugger all about anything. Except perhaps blowing money and building personal empires.

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