Carbon Cronyism: Why Cap-and-Trade Is Not Dead Yet

by Brian Sussman

This past weekend, while addressing the Netroots convention in Las Vegas, Senator Harry Reid gave the gathering of lefties a promise regarding U.S. health care. "We're going to have a public option," Reid said. "It's just a question of when."

The same thing can be said of a cap-and-trade energy bill: The Democrats are determined to get cap-and-trade. It's just a question of when. There's too much money to be made for Democrat cronies to let this opportunity pass.

Nancy Pelosi pushed the original 1,200-page cap-and-trade bill though the House of Representatives a year ago. I have written extensively about the innards of the legislation both in my book, Climategate, and in the pages of the American Thinker. Given the mood of the people, it's unlikely that a similar monster of a bill could pass the Senate this session. However a scaled down version with some so-called compromises just might.

The compromises will be creative and designed to lure enough Republicans and voter-sensitive Democrats to the dark side. One such deal might include allowing more domestic drilling for oil and natural gas, or perhaps the expansion/construction of oil refineries. Any giveaways to the oil industry would be a lucrative trade-off, especially since these entities will be financially reamed by cap-and-trade.

Once deals are cut, it will be like a Three-Card Monte street hustle. Whatever the Senate passes will be craftily conjoined with the gargantuan House bill in committee, and then sent back to the two chambers for a final vote. Before you know it, the new legislation will wind up on the desk of the man who wants to transform America.

And even if it's only the proverbial "nose of the camel" that's allowed under the tent, some form of cap-and-trade will be in the bill.

Recall that cap-and-trade works like this: Members of President Obama's team will look at every industry sector in America and determine how much carbon dioxide individual businesses and companies are allowed to emit – that's the cap. If an entity surpasses its defined annual cap, it must purchase carbon credits from a government-approved exchange. If that same business were to see its carbon emissions remain below the imposed cap, it would gain credits.

At the end of each year, the government will auction off new permits to carbon producers. Businesses with leftover credits from the prior year will be able to hold them for a specified period of time, and then, depending on demand, sell them later for a greater profit. Long sales, short sales, speculation, and loaning credits for cash – it will all be possible with cap-and-trade. Even derivatives trading is allowed. Well-placed investment bankers and brokers are eyeing cap-and-trade as their biggest opportunity since the internet bubble – and big-government liberals are excited, too. With each transaction on the exchange, the brokers will get a commission, investors will get an easy "vig" (as they arrogantly say behind the scenes in the investment world), and the feds will take an even easier skim. According to the Congressional Budget Office, by 2015, the federal government will be hauling in at least $104 billion a year from cap-and-trade. Investors are anticipating even more.

The officially recognized carbon exchange will likely be awarded to a privately held company called the Chicago Climate Exchange (CCX). As mysterious as the inner workings of the Federal Reserve, CCX was created as the first voluntary cap-and-trade system established in the U.S.

And as conspiratorial as it may sound, Barack Obama has been in on this for many years. In fact, before Obama was ever elected to public office, he was recruited to the board of the radical, non-profit Joyce Foundation, where he served from 1994 to 2001. Joyce gave over $1 million in two separate grants that were instrumental in developing and launching the privately owned Chicago Climate Exchange.

When the foundation made its first grant to the Climate Exchange, Joyce's president was Paula DiPerna. DiPerna left the organization in 2001 to become a founding executive vice president of CCX. In 2009, Ed Barnes of Fox News interviewed DiPerna and asked about Obama's role in the grants. She replied that as a director, Obama "read the proposal and voted on the grant."

And some of America's biggest moneymakers are lined up and ready to drink the milk of this Chicago-based cash cow.

As I expose in my book, Climategate, foremost on the list are Al Gore and his former Goldman Sachs business buddies, including past Goldman CEO Hank Paulson (Treasury Secretary under George W. Bush) and Philip Murphy (once Chair of the Democratic Finance Committee). Together with Gore, these chums founded Generation Investment Management (GIM) in London. GIM is a hedge fund that specializes in "green investments" and is worth over $1 billion. GIM is said to have a 20-percent stake in Europe's official carbon trading exchange, the European Climate Exchange (ECX), as well as a significant stake in the Chicago Exchange.

Read the rest of the article

July 30, 2010

Copyright © 2010 American Thinker