Obama original 'climate' agenda would have bankrupt US utilities-Chicago Climate Exchange founder

• Sandor is founder of the Chicago Climate Exchange.

6/16/09, "(Richard) Sandor got Obama's nod for Chicago-style climate law," Bloomberg, by Jim Efstathiou, Jr.

(parag. 8): "The original bill, the cornerstone of Obama’s environmental agenda, began “way, way to the left,” Sandor said in an interview, with

• provisions he said would push U.S. utilities into bankruptcy.

“The Waxman bill, to those of us who are students, was a joke from the inception,” said Sandor, who at the Chicago Board of Trade helped develop interest-rate futures such as the Treasury-bond contract, which began trading in 1977....

Agriculture-based offsets are at the center of a debate erupting in Congress that threatens to derail the bill (in 2009). House Agriculture Committee Chairman Collin Peterson told reporters June 10 that he won’t support it

• unless the Agriculture Department rather than the Environmental Protection Agency is given authority to decide what environmentally friendly actions farmers can take to earn offsets.

While the bill initially excluded such activities unless they were regulated by state or tribal governments, it now allows American Electric and Ford Motor Co. to offer offsets they purchased as Chicago exchange members. They can meet 30 percent of mandated pollution limits by using such credits.

• The market value of the Chicago exchange in 2008 was $307 million, up more than fourfold from 2007, according to the Ecosystem Marketplace report.
  

Sandor launched the Chicago Climate Exchange, or CCX, in 2003 after getting two research grants from the Chicago-based Joyce Foundation. The money went to the Kellogg School of Management at Northwestern University, in Evanston, Illinois, for Sandor’s pilot program to trade carbon credits.

“Obama was on the foundation that gave us the grant,” Sandor said. “We know him well.”...

Obama has proposed auctioning pollution permits to raise at least $646 billion from 2012 to 2019.

• Sandor opposed that provision, saying that paying for the permits would wipe out utilities’ profits.

“You bankrupt the industry,” he said. “So you sit down with senators and say, ‘Look, think this through, guys.’”...

Sandor held senior positions at Kidder Peabody & Co., Drexel Burnham Lambert Inc. and the Chicago Board of Trade, where he helped create financial instruments that today make up about 40 percent of trading at CME Group, which comprises the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange.

In 1989, he wrote a paper promoting the use of financial markets to turn air pollution into a commodity to reduce sulfur- dioxide emissions from power plants. His early concepts helped shape the landmark 1990 Clean Air Act, which mandated acid-rain reductions and built a market where companies trade rights to pollute.

• The new legislation would create a mandatory national program to cut greenhouse-gas emissions 17 percent from 2005 levels by 2020. To release each ton, companies will need to own
  
• either a government-issued permit or a carbon credit of the kind traded over-the-counter or on the Chicago exchange....

About $32.8 billion of United Nations offsets traded last year in the European Union’s cap-and-trade market, which opened in 2005, according to a World Bank report.

Utilities and manufacturers support carbon offsets because they are typically cheaper than installing equipment to trim pollution at their plants or buying government-issued emission permits.

While credits from organizations such as the Washington- based Voluntary Carbon Standard Association and the Climate Action Reserve of Los Angeles may also qualify under the bill, Sandor’s exchange has registered more offsets from farm practices that opponents say are easily reversed or might have occurred even without new carbon rules. Eizenstat, the CCX board member, said exchange supporters have persuaded those writing the climate bill.

• “We’ve convinced people that these projects are valid,” said Eizenstat, who as special representative on holocaust issues under Clinton helped forge a settlement for Nazi-era slave laborers.

The Chicago platform handled 69 million of the 123 million credits traded worldwide in 2008 in the voluntary emissions market, a precursor to the government-mandated market Congress plans to create, according to Ecosystem Marketplace.

Farmers have registered credits through CCX for planting seeds using special knives instead of conventional plows, to disturb as little soil as possible. The technique exposes less plant waste to the air, slowing a chemical reaction that makes CO2. Sandor defended the integrity of such methods.

• “You don’t get credit in the UN for protecting forests in Indonesia,” Sandor said. “We give you credit. Criticize what you may, we’re going to win that battle.”
  

Under the UN program, avoiding deforestation isn’t eligible for generating carbon credits. Sandor’s market-based concepts are drawing support from members of Congress who favor cap-and- trade as long as the cost to companies is minimized. Government- issued permits initially will trade at about $15 a ton, according to the EPA, more than double the 2008 average price for carbon offsets in the current voluntary market....

“What this really does is buy a little bit of time to smooth out the rate impacts in the early years,” said John Stowell, vice president of environmental policy for Duke Energy, the Charlotte, North Carolina-based owner of utilities in the U.S. Southeast and Midwest. “We need a bridge to get us to the new technology.”...

• Carbon credits also come from projects that produce clean energy from the wind and sun, or that capture methane from landfills and coal mines....

A Congressional Budget Office report in 2007 estimated that the U.S. could store as much as 60 billion tons of carbon over 50 years using cropland and forests. Yet such methods are “easily reversible” through fires or pest outbreaks, the agency concluded."

George W. Bush did almost nothing to stop this fraud despite media screaming to the contrary. Bush is even an advocate of the wind energy business. ed.

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