Port Talbot, Tata and the European Union Emissions Trading Scheme

Closing steelworks is a bit like closing coal mines. Steelworks are dangerous places where a special breed of person works in conditions that are physically dangerous and dangerous to health. Some die in work. However, like coal mines, the works form the rationale for a large community and when the works close the rationale for the community ends and towns and villages end up out of work and very depressed. You then have the irony of folk fighting to have the ability to work in unhealthy dangerous conditions, because that is all the work there is likely to be.

Port Talbot now faces the prospect of Tata closing its steelworks. Tata has done quite well out of the Steelworks. It has made money out of steel production but probably made as much money out of the free gift of carbon emission permits estimated to be £794 million of “free money” in the ill designed and fraud ridden European Union Emissions Trading Scheme. I criticised the EUETS when it was being designed and when it came into being in this blog. The EUETS has achieved no carbon dioxide emission savings at all, but did manage to hand out free money to large corporations.

Tata having got its gift of free money from the taxpayers has now decided to close Port Talbot Steelworks because of steel dumping by China, it seems, and because the price of steel is too low to sustain Port Talbot’s steelwork business. Now UK taxpayers will probably have to cough up again if the plant is to be kept going and the livelihoods of the people of Port Talbot to be preserved. They will have to pay someone to take over the plant and probably bail out the Tata pension fund, which seems to have a large black hole, carbon permits or not.

It seems to me that the lesson to draw from what is threatening the lives of a quarter of a million good folk in Port Talbot is twofold. First, never trust the European Union to prevent large scale dumping of any commodity; it will only act when it is too late and secondly, never trust the European Union to design a way of saving carbon emissions by the use of artificial financial instruments.

 

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