Skip to main content

CCX, the Short Happy Life of CO2

It became clear to Professor Richard Sandor that Global Warming offered a great opportunity to investors to decrease carbon dioxide and make a profit. Since CO2 is in everything, energy would have to be decreased. How is this to be done? By permitting the voluntary trading of carbon credits by buyers and sellers.

Manufacturers emitting CO2 would need a permit to increase the CO2 they needed to produce. Firms having a surplus of permits, having no need of the surplus, would be able to sell the surplus in the free market to the manufacturers needing it.

So Richard Sandor, professor of business at Northwestern University in Chicago, applied to the Joyce Foundation in Chicago for a $1.1 million start-up grant for voluntary buying and selling permits-to-emit carbon dioxide. Between 1994 and 2002, Barack Obama sat on the Board of the Joyce Foundation.

Sandor’s voluntary exchange system would be available and might become mandatory—and profitable—with the passing of a Cap-and-Trade bill. The exchange might become very valuable, and might ultimately involve $10 trillion. (Environmentalists thought $500 billion.)

Sandor, for his creativity and ingenuity, was named “Hero of the Planet” by TIME Magazine in 2002 and “Hero of the Environment” in 2007.

The prospect of such a system of exchanges attracted ALGore’s Generation Investment Management and several former partners of Goldman Sachs. Goldman Sachs itself bought a 10% stake in it in 2006. Motorola, DuPont, Ford, and hundreds of other investors joined in, seeking a seat at a new capacious Global Warming table. Franklin Raines, CEO of Fannie Mae, figured out how to extend carbon-trading on the exchange to include residences. He purchased it and got a patent on it.

The Waxman-Markey Cap-and-Trade bill passed the House. But by the time the Kerry-Boxer Cap-and-Trade bill was to be brought to the Senate, the recession had begun and ClimateGate was emerging. The ClimateGate scandal developed as e-mails from the Climate Research Unit of East Anglia University divulged the manipulation of data to conceal the decline in global warmth.

The Senate was unlikely to pass the bill. The two biggest losers were AlGore and Goldman Sachs, according to Investors Business Daily.

Sandor sold his 16.5% interest in what had become his Chicago Climate Change Exchange (CCCX) for $98.6 million, making him the hero of still another population subgroup, the “take the money and run,” records the Investors Business Daily.

How well did ALGore and Goldman Sachs do on balance? Steve Milloy, blogger of Pajamas Media and the source of this intelligence, does not hazard an answer.

On October 21, the Chicago Climate Exchange announced the end of carbon trading. The Exchange was sold for $600 million to the Intercontinental Exchange, which is traded on the New York Stock Exchange. The price had fallen to ten cents for a ton of CO2. (The highest price ever reached was $7.)

The failure of the CCCX was completely overlooked by the media. They never even mentioned it, as a lexus-nexus search has indicated. The news was ultimately published in a short editorial, “Cap and Retreat,” in The Wall Street Journal of November 20-21. (Whether any other medium mentioned CCCX’s failure between the time of the lexus-nexus and November 20-21, is not known.)

That’s not the end of climate exchanges, however. A climate exchange exists in Europe (ECX). It exists in countries that have signed the Kyoto Protocol, for that document mandates carbon caps. The U.S. never signed the Protocol.

So too does the selling and buying of permits-to-emit CO2 exist or potentially exist in California. An attempt to postpone it was defeated in the November 2 election. The defeated provision would have suspended the carbon-emissions cap requirement till the California unemployment rate should have fallen to 5.5%. (Its rate was then 12.4%.) Californians perhaps misunderstood the provision, for it will impose enormous costs on them.

How does this happen? The U.S. Government is supposed to set a cap on the total amount of CO2 that can be emitted nationally. Companies then sell or buy permits to cover their excess of CO2 tonnage, or their need for it, in their production process. Over time, the government regularly reduces the total.

The amount companies buy is comparable to a tax, which is why The Wall Street Journal always refers to the bill not as Cap-and-Trade but as Cap and Tax.

The tax—the cost of the permit—is passed on to every customer, at level after level if there is more than one level, and to the eventual consumer, in the goods or services he buys.

The objective of the law is to raise the price that consumers have to pay. That will raise the cost of gas and electricity, so that consumers will consume less. The added cost will appear in everything consumers buy or use. It is thought to become the highest of all taxes.

It is estimated that the annual cost to a California family of four would be $1,870 by 2020, and $6,800 for a family of four by 2035. In Britain, which has been living with this carbon-cutting tax for a few years, an average family pays $1,300 a year.

Sic transit “North America’s only cap-and-trade system for all six greenhouse gases, with global affiliates and projects worldwide,” as the CCCX called itself.

By Natalie Sirkin
e-mail: sirnat9@gmail.com

Comments

Popular posts from this blog

The Blumenthal Burisma Connection

Steve Hilton , a Fox News commentator who over the weekend had connected some Burisma corruption dots, had this to say about Connecticut U.S. Senator Dick Blumenthal’s association with the tangled knot of corruption in Ukraine: “We cross-referenced the Senate co-sponsors of Ed Markey's Ukraine gas bill with the list of Democrats whom Burisma lobbyist, David Leiter, routinely gave money to and found another one -- one of the most sanctimonious of them all, actually -- Sen. Richard Blumenthal."

PCBs, GOOD FOR YOUR HEALTH

By Gerald and Natalie Sirkin c2007 A front-page story on PCBs in the March 9 News-Times is just wrong. The first thing to know about PCBs is that they never killed a single person nor did they ever cause cancer. The second is that although they are invariably called “cancer-causing,” that designation comes chiefly from a single rat study. The third thing is that the subject rats were exposed daily for 21 months to 100 parts per million (ppm) of PCBs containing 60% chlorine. (The 100 ppm was about 5,000 times the tolerable daily intake of PCBs set by FDA in 1973.) When rats were exposed to PCBs containing less chlorine, they developed no cancers. The fourth, that when the exposed rats were allowed to live out their lives, they had fewer cancers and lived longer than the unexposed rats. PCBs is a family of chemicals known as polychlorinated biphenyls. PCBs contain chlorine ranging from 12% to 70%. They were used in two General Electric plants that manufactured electrical equipmen...

Taking The Fifth, After Esty

Whether or not U.S. Representative Elizabeth Esty will serve the remainder of her term or resign immediately is very much an open question. But, in any case, the battle for Connecticut’s 5 th U.S. Congressional District has begun with a show of unexpected fireworks. For many years, the 5 th District was a toss-up proposition; both Republicans and Democrats have held and surrendered the seat. Geographically the 5 th District touches the border of New York from Connecticut’s northern-most point to Danbury in the southern quadrant and includes much of Litchfield county and parts of Fairfield, Hartford and New Haven counties. Party affiliation is competitive, in round figures, 30 percent Democrat, 25 percent Republican and 45 percent unaffiliated. Over the years, the Democrat Party in Connecticut has moved from the center to the left, but the 5 th District has been a moderate preserve. During the Obama presidential election, Republican moderates within Connecticut's U.S. ...