Chicago Climate Exchange = FAIL, Now California opens “Pacific Carbon Exchange”

By Anthony Watts
December 16, 2010

UPDATE: related story shows what can happen when emissions trading doesn’t have proper checks and balances – Carbon trading tempts firms to make greenhouse gas

California hasn’t learned from the failure of the Chicago Climate Exchange this year, when a ton of Carbon traded for a mere 5 cents. Nobody wanted to buy it even at that ridiculously low price. But, like a zombie, carbon trading rises again in brain dead broken California.

final day on CCX - click to enlarge

Now the the AB32 madness begins, and PCarbX (which sounds like some over the counter antacid remedy) is the new trading scheme. I give it two years, max. Here’s the story from the San Francisco Chronicle.

California poised to enter carbon-trading market
By Andrew S. Ross

Today could be seen as the biggest day yet for California’s climate change law, assuming, as expected, the state Air Resources Board signs off on the rules to implement it.

It will also be a big day for Aaron Singer, CEO of San Francisco startup Pacific Carbon Exchange, (at left) which is engaging in an enterprise thought dead in the water not so long ago: carbon trading.

“It’s the official starting gun for California and for Western regional carbon markets,” Singer said. “It means we get to make this business a growing reality.”

Central to the law, which goes into effect in 2012, is a “cap and trade” system designed to limit the amount of carbon from the state’s 500 largest emitters – mostly power plants, energy companies and heavy industry.

Companies emitting less than their state-mandated limit can trade their unused allowance – also known as carbon credits, or offsets – with companies that may be seeking to emit more than their mandated share.

“This is a significant milestone,” said Josh Margolis, CEO of Cantor CO2e, a San Francisco offshoot of New York’s Cantor Fitzgerald, referring to the board’s expected action. “In the trading world, it’s been a decadelong anticipation.”

With the Bay Area Council serving as the firm’s incubator, Singer has been working on its trading infrastructure for the past two years and is in the process of obtaining the certifications and accreditations from the U.S. Commodity and Futures Exchange Commission.

In the meantime, PCarbX, as it is known, plans to begin some futures and options trading next year, pending a full rollout when the bell officially rings in January 2012.

In September, it also signed a memorandum of understanding with the Shanghai Environment and Energy Exchange to explore the establishment of more carbon markets in the United States and China.
Other entrants: PCarbX is not alone. In addition to Cantor CO2e, others in the “environmental commodity” business who are reported to be coming to California include the global Intercontinental Exchange and the Green Exchange, both with U.S. headquarters in New York. “We expect healthy competition,” Singer said.

“As a San Francisco-based entity with ties to policymakers, they’re in a unique position,” said Adam Raphaely, director of environmental markets at Karbone, an environmental commodity brokerage and project finance company in New York. “We see a potential relationship there.”

Neither is California alone, even though Congress and the Obama administration gave up on a national cap-and-trade policy this year.

The Western Climate Initiative, a cap-and-trade program, which includes several Western states and Canadian provinces, is due to go into effect – also in 2012.

Still, for all the anticipation, carbon trading here is likely to start small, especially as the Air Resources Board is initially giving emission allowances away for free, rather than the $10 minimum per ton the agency had proposed in its rules. And companies don’t necessarily have to trade through exchanges.

“You won’t see a big bang, but, rather, a buildup in intensity,” said Margolis, who has estimated the market could be worth anywhere from $3 billion to $58 billion by 2020 – the target year for California’s emissions to be lowered.

“This is much more than simply a business opportunity,” Singer said. “We’re here to serve the aims of AB32 and help the next generation of clean tech investment for our state.”

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/15/BUO21GQG0D.DTL#ixzz18L4gAqtW
















The EU ETS has put a price on carbon emissions and shown that it is possible to trade in greenhouse gas emissions. Emissions from installations in the scheme are falling as intended. The changes to be introduced in 2013, notably a progressive move towards auctioning of allowances, will further enhance its effectiveness.

The success of the EU ETS has inspired other countries and regions to launch cap and trade schemes of their own. The EU hopes to link up the ETS with compatible systems around the world to form the backbone of a global carbon market.”
http://ec.europa.eu/clima/policies/ets/index_en.htm

“Trading carbon credits is rapidly growing as investors realise the potential profits it can hold. Download our free research report now to learn how to trade them.”
http://www.carbon-ex.lu/ga-learn-to-trade-carbon.php

EU ETS Phase III (2013 – 2020)

“Phase III of the EU ETS builds upon the previous two phases and is significantly revised to make a greater contribution to tackling climate change. A more ambitious, EU-wide cap on emissions; auctioning as the preferred means of allocation; and reduced access to project credits from outside the EU will result greater emission reductions, greater certainty and more predictable market conditions.”
http://www.decc.gov.uk/en/content/cms/emissions/eu_ets/phase_iii/phase_iii.aspx

“On Monday July 18, the benchmark EU carbon price, EUA futures for December 11 delivery, closed at €12.22 on the Intercontinental Exchange (ICE). The price for Dec 2013 EUAs, the first year of the third phase of the EU ETS, closed at €13.73. UN-backed carbon offsets have suffered in similar fashion, benchmark Dec 11 CERs slumping to just €9.90, below the cost of creating such offsets in many cases. Prices in this period have been more volatile than the general ups and downs the market sees under the day-to-day influence of energy prices. Dec 11 EUAs fell 17 per cent in the third week of June alone.”
http://www.carbonpositive.net/viewarticle.aspx?articleID=2353

“The ICE ECX EUA Options Contract is an option on the ECX EUA Futures Contract. At expiry, one lot of ECX EUA Options will excercise into one lot of ECX EUA Futures. ECX EUA Options are European style such that it is automatically exercised at expiry in the money.”
https://www.theice.com/productguide/ProductDetails.shtml?specId=196
http://en.wikipedia.org/wiki/European_Climate_Exchange

Settlement price graphic on page 6:
https://www.theice.com/publicdocs/futures/ICE_Monthly_Utility_Report.pdf


Chicago Climate Exchange Names Founding Members
Chicago Climate Exchange and Joyce Foundation via Washington Post | 1.17.2003

Excerpt of first source:

Chicago Climate Exchange Names Founding Members

Leaders from Automotive, Chemical, Commercial Real Estate, Environmental Services, Electric Power Generation, Electronics, Forest Products, Municipal, Pharmaceutical and Semiconductor Sectors to join North American Voluntary Private Sector Program to Reduce and Trade Greenhouse Gases
(CSRwire)

CHICAGO,IL - Efforts to develop market-based solutions to global warming reach a milestone today as leading U.S. and international companies and the City of Chicago announce they will be the Founding Members of Chicago Climate Exchange (CCX®), a voluntary cap-and-trade program for reducing and trading greenhouse gas emissions. In an unprecedented voluntary action, these entities have made a legally binding commitment to reduce their emissions of greenhouse gases by four percent below the average of their 1998-2001 baseline by 2006, the last year of the pilot program.

The founding members of CCX include:

American Electric Power (AEP),
Baxter International Inc., the City of Chicago,
DuPont,
Equity Office Properties Trust,
Ford Motor Company,
International Paper,
Manitoba Hydro,
MeadWestvaco Corporation,
Motorola, Inc., STMicroelectronics,
Stora Enso North America, Temple-Inland Inc. and
Waste Management,Inc.
(snip)

CCX will administer this pilot program for emission sources, farm and forest carbon sinks, offset projects and liquidity providers in North America. To foster international emissions trading, offset providers in Brazil can also participate. The development of CCX resulted from feasibility and design studies that were funded by grants from the Chicago-based Joyce Foundation and administered by Northwestern University’s Kellogg Graduate School of Management. Environmental Financial Products, LLC conducted the research and development effort.

Excerpt of second source:
http://projects.washingtonpost.com/2008-presidential-candidates/barack-obama/

The Joyce Foundation's Annual Reports list Barack Obama as one of the 12 members of the Board of Directors from 1998 until 2001.

Barack Hussein Obama Biography Excerpt:

Experience Businesses Owned, Past Careers, Board Memberships, Etc.:

Center for Neighborhood and Technology
Chicago Annenberg Challenge
Cook County Bar
Cook County Bar Association Community Law Project

Board Member, Joyce Foundation

Lawyer's Committee for Civil Rights Under the Law
Leadership for Quality Education
Member, Trinity United Church of Christ
Board Member, Woods Fund of Chicago

THE CHICAGO CLIMATE EXCHANGE ~ PAY ME !!!

philhillusa
June 25, 2013

Obama is part of a scam. The “warming due to carbon pollution” is a way to charge all that produce emmissions a fine. Government won’t collect the money. The CHICAGO CLIMATE EXCHANGE will collect the money.

Obama’s Pack of Lies for Today ~
http://youtu.be/v1yJ4YV8yFQ

Global warming is a conspiracy to stifle capitalism and redistribute wealth. Scientists that support this scam do so, because the Government is paying their salary. Global Warming is part of the Marxist Religion.

Warmers tend to be very radical Leftists….

Obama Years Ago Helped Fund Carbon Program He Is Now Pushing Through Congress” is a FOXNews story by Ed Barnes.  In short, “While on the board of a Chicago-based charity, Barack Obama helped fund a carbon trading exchange that will likely play a critical role in the cap-and-trade carbon reduction program he is now trying to push through Congress as president.”

The charity was the Joyce Foundation on whose board of directors Obama served and which gave nearly $1.1 million in two separate grants that were “instrumental in developing and launching the privately-owned Chicago Climate Exchange, which now calls itself “North America’s only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide.”

And that’s only the beginning of this tawdry tale,  Mr. Barnes.

The “privately-owned” Chicago Climate Exchange is heavily influenced  by Obama cohorts Al Gore and Maurice Strong.

For years now Strong and Gore have been cashing in on that lucrative cottage industry known as man-made global warming.

Strong is on the board of directors of the Chicago Climate Exchange, Wikipedia-described as “the world’s first and North America’s only legally binding greenhouse gas emission registry reduction system for emission sources and offset projects in North America and Brazil.”

Gore, self-proclaimed Patron Saint of the Environment,  buys his carbon off-sets from himself—the Generation Investment Management LLP, “an independent, private, owner-managed partnership established in 2004 with offices in London and Washington, D.C., of which he is both chairman and founding partner. The Generation Investment Management business has considerable influence over the major carbon credit trading firms that currently exist, including the Chicago Climate Exchange.

Strong, the silent partner, is a man whose name often draws a blank on the Washington cocktail circuit.  Even though a former Secretary General of the 1992 United Nations Conference on Environment and Development (the much hyped Rio Earth Summit) and Under-Secretary General of the United Nations in the days of an Oil-for-Food beleaguered Kofi Annan, the Canadian born Strong is little known in the United States.  That’s because he spends most of his time in China where he he has been working to make the communist country the world’s next superpower.  The nondescript Strong, nonetheless is the big cheese in the underworld of climate change and is one of the main architects of the failing Kyoto Protocol.

Full credit for the expose on the business partnership of Strong and Gore in the cap-and-trade reduction scheme should go to the investigative acumen of the Executive Intelligence Review (EIR).

The tawdry tale of the top two global warming gurus in the business world goes all the way back to Earth Day, April 17, 1995 when the future author of “An Inconvenient Truth” travelled to Fall River, Massachusetts, to deliver a green sermon at the headquarters of Molten Metal Technology Inc. (MMTI).  MMTI was a firm that proclaimed to have invented a process for recycling metals from waste.  Gore praised the Molten Metal firm as a pioneer in the kind of  innovative technology that can save the environment, and make money for investors at the same time.

“Gore left a few facts out of his speech that day,” wrote EIR. “First, the firm was run by Strong and a group of Gore intimates, including Peter Knight, the firm’s registered lobbyist, and Gore’s former top Senate aide.”

(Fast-forward to the present day and ask yourself why it is that every time someone picks up another Senate rock,  another serpent comes slithering out).

“Second, the company had received more than $25 million in U.S. Department of Energy (DOE) research and development grants, but had failed to prove that the technology worked on a commercial scale.  The company would go on to receive another $8 million in federal taxpayers’ cash, at that point, its only source of revenue.

“With Al Gore’s Earth Day as a Wall Street calling card, Molten Metal’s stock value soared to $35 a share, a range it maintained through October 1996.  But along the way, DOE scientists had balked at further funding.  When in March 1996, corporate officers concluded that the federal cash cow was about to run dry, they took action: Between that date and October 1996, seven corporate officers—including Maurice strong—sold off $15.3 million in personal shares in the company, at top market value.  On Oct. 20, 1996—a Sunday—the company issued a press release, announcing for the first time, that DOE funding would be vastly scaled back, and reported the bad news on a conference call with stockbrokers.

“On Monday, the stock plunged by 49%, soon landing at $5 a share.  By early 1997, furious stockholders had filed a class action suit against the company and its directors.  Ironically, one of the class action lawyers had tangled with Maurice strong in another insider trading case, involving a Swiss company called AZL Resources, chaired by Strong, who was also a lead shareholder.  The AZL case closely mirrored Molten Metal, and in the end, Strong and the other AZL partners agreed to pay $5 million to dodge a jury verdict, when eyewitness evidence surfaced of Strong’s role in scamming the value of the company stock up into the stratosphere, before selling it off.

In 1997,  Strong went on to accept from Tongsun Park, who was found guilty of illegally acting as an Iraqi agent, $1 million from Saddam Hussein, which was invested in Cordex Petroleum Inc., a company he owned with his son, Fred.

These are the leaders in the Man-made Global Warming Movement, who three years later were to be funded by the man who was to become President of the United States of America.

If we follow the time line on where Obama was during the funding of the Chicago Climate Exchange, he was still a lecturer at the University of Chicago Law School teaching constitutional law, with his law license becoming inactive a year later in 2002.

It may be interesting to note that the Chicago Climate Exchange in spite of  its hype, is a veritable rat’s nest of cronyism. The largest shareholder in the Exchange is Goldman Sachs.  Chicago Mayor Richard M. Daley is its honorary chairman,  The Joyce Foundation,  which funded the Exchange also funded money for John  Ayers’ Chicago School Initiatives.  John is the brother of William Ayers.

What a flap when it was discovered that the senator from Chicago had nursed on Saul Alinsky’s milk,  had his political career launched at a coffee party held by domestic terrorist Bill Ayers, and sat for 20 years, uncomplaining in front of the “God-dam-America pulpit of resentment-challenged Jeremiah Wright.

Folk were naturally outraged that the empty suit who would go on to become TOTUS was spawned from such anti-American activism.

But the media should have been hollering, “Stop Thief!” instead.

The same Chicago Climate Exchange promoting public rip-off was funded by Obama before he was POTUS.

Even as man-made global warming is being exposed as a money-generating hoax, Obama is working feverishly to push the controversial cap-and-trade carbon reduction scheme through Congress.

Obama was never the character he created for himself in the fairy-tale version in “Dreams of My Father”.  He’s the agent of Change and Hope for cohorts making money down at the Chicago Climate Exchange.

The Barbarians are pushing at the gate of the Global Warming fraud, and to borrow a line from children playing Hide and Seek, Here they come, ready or not!

Barack Obama and his legions of “never question” supporters continue to push for the Big Government expansion that is the true motivation behind the global warming/climate change movement, even as years of recent science suggest little to no warming since Al Gore made millions off of his Power Point presentation on the subject that eventually won him an Oscar for Best Documentary.  (Both Gore and Obama have direct ties to the climate change industry based in Chicago)  Just today, Barack Obama is announcing a series of new regulations he (falsely) claims will combat climate change, including international agreements that would circumvent the United States’ own sovereign authority. (Something Obama seems particularly obsessed with doing)

Climate Expert von Storch: Why Is Global Warming Stagnating?

Climate experts have long predicted that temperatures would rise in parallel with greenhouse gas emissions. But, for 15 years, they haven’t. In a SPIEGEL interview, meteorologist Hans von Storch discusses how this “puzzle” might force scientists to alter what could be “fundamentally wrong” models.

…SPIEGEL: Just since the turn of the millennium, humanity has emitted another 400 billion metric tons of CO₂ into the atmosphere, yet temperatures haven’t risen in nearly 15 years. What can explain this?

Storch: So far, no one has been able to provide a compelling answer to why climate change seems to be taking a break. We’re facing a puzzle. Recent CO₂ emissions have actually risen even more steeply than we feared. As a result, according to most climate models, we should have seen temperatures rise by around 0.25 degrees Celsius (0.45 degrees Fahrenheit) over the past 10 years. That hasn’t happened. In fact, the increase over the last 15 years was just 0.06 degrees Celsius (0.11 degrees Fahrenheit) — a value very close to zero. This is a serious scientific problem that the Intergovernmental Panel on Climate Change (IPCC) will have to confront when it presents its next Assessment Report late next year.

…If things continue as they have been, in five years, at the latest, we will need to acknowledge that something is fundamentally wrong with our climate models. A 20-year pause in global warming does not occur in a single modeled scenario. But even today, we are finding it very difficult to reconcile actual temperature trends with our expectations.

Mr. Storch is among the most notable climate “experts” of the last two decades, and a longtime proponent of the theory behind man-made global warming.  Even he though, as clearly indicated in this interview, is coming to a realization that the oft-quoted scientific “studies” that propped up the global warming hysteria for so long are now being proven to be fundamentally flawed, thus placing into question the entire theory.

It is now science, and NOT climate change deniers, or conservative politicians, that is refuting the global warming lie.  And yet, here we have Barack Obama, who in 2008 claimed he was to bring “science back into the White House”, ignoring the climate change science and pushing ahead with the Big Government globalist agenda under the guise of combating (non-existent) climate change.

It was NEVER about saving the planet folks – it was always about controlling YOU and YOURS.

R.I.P.: Al Gore’s Chicago Climate Exchange Has Died

November 7, 2010

Steve Milloy at PajamasMedia writes:

Global warming-inspired cap and trade has been one of the most stridently debated public policy controversies of the past 15 years. But it is dying a quiet death. In a little reported move, the Chicago Climate Exchange (CCX) announced on Oct. 21 that it will be ending carbon trading – the only purpose for which it was founded – this year.

Although the trading in carbon emissions credits was voluntary, the CCX was intended to be the hub of the mandatory carbon trading established by a cap-and-trade law, like the Waxman-Markey scheme passed by the House in June 2009.

At its founding in November 2000, it was estimated that the size of CCX’s carbon trading market could reach $500 billion. That estimate ballooned over the years to $10 trillion.

Al Capone tried to use Prohibition to muscle in on a piece of all the action in Chicago. The CCX’s backers wanted to use a new prohibition on carbon emissions to muscle in on a piece of, quite literally, all the action in the world.

The CCX was the brainchild of Northwestern University business professor Richard Sandor, who used $1.1 million in grants from the Chicago-based left-wing Joyce Foundation to launch the CCX. For his efforts, Time named Sandor as one of its Heroes of the Planet in 2002 and one of its Heroes of the Environment in 2007.

The CCX seemed to have a lock on success. Not only was a young Barack Obama a board member of the Joyce Foundation that funded the fledgling CCX, but over the years it attracted such big name climate investors as Goldman Sachs and Al Gore’s Generation Investment Management.

But a funny thing happened on the way to the CCX’s highly anticipated looting of taxpayers and consumers – cap-and-trade imploded following its high water mark of the House passage of the Waxman-Markey bill. With ongoing economic recession, Climategate, and the tea party movement, what once seemed like a certainty became anything but.

CCX’s panicked original investors bailed out this spring, unloading the dog and its across-the-pond cousin, the European Climate Exchange (ECX), for $600 million to the New York Stock Exchange-traded Intercontinental Exchange (ICE) – an electronic futures and derivatives platform based in Atlanta and London. (Luckier than the CCX, the ECX continues to exist thanks to the mandatory carbon caps of the Kyoto Protocol.)

The ECX may soon follow the CCX into oblivion, however – the Kyoto Protocol expires in 2012. No new international treaty is anywhere in sight.

The rest here. 

Sale of Chicago Climate Exchange to ICE Reinforces Weak Carbon Market

By JOEL KIRKLAND of ClimateWire

Published at The New York Times on May 3, 2010

Richard Sandor spent the past decade peddling a big idea: that capitalism has a solution for global warming. The trading house he launched in 2003, the Chicago Climate Exchange, would be the locomotive pulling an American environmental revolution into the 21st century as smokestack industries bought and sold a commodity called greenhouse gas emission allowances. Carbon futures and options, so his theory went, would turn financial speculators into tree-huggers.

On Friday, Sandor and the other shareholders of parent company Climate Exchange cashed out of this big idea for about $600 million. The IntercontinentalExchange (ICE), an electronic futures and derivatives platform based in Atlanta and London, announced it had agreed to purchase the three exchanges, the Chicago Climate Exchange, Chicago Climate Futures Exchange and European Climate Exchange.

The combination brings the still-small U.S. carbon market closer to the profitable world of global over-the-counter (OTC) energy trading, which ICE specializes in. It also consolidates carbon emissions trading under the tents of two major commodity exchanges, ICE and CME Group, which operates the New York Mercantile Exchange's nascent platform for carbon trading, the Green Exchange.

"The combination of Climate Exchange's emissions markets and ICE's futures and OTC energy markets is an important and logical strategic combination for our customers and shareholders," said ICE's chairman and CEO, Jeffrey Sprecher.

In a statement, Sprecher noted that Sandor's idea paved the way for Europe's carbon cap-and-trade program. There, the exchange developed into the major platform for trading offsets in the form of E.U. carbon emissions allowances and certified emission reduction credits generated under the United Nations' Clean Development Mechanism.

A 'rough five years'

But the Chicago Climate Exchange and its sister futures exchange have struggled for traction in the United States. And it is in the U.S. market that Sandor had hoped to build a large trading operation that would be good for both business and the environment.

"This has been a rough five years," Sandor acknowledged in a telephone interview Friday. 

Sandor said the nature of ICE -- an energy-trading platform -- and the need to boost shareholder value and drive down the cost of trading carbon contracts led to the decision to sell. Shareholders needed to walk away happy, he said, in light of the roller-coaster ride that now defines climate politics and carbon markets.

"We thought it was the right combination with the right exchange and at the right time," Sandor said. "As other exchanges have merged, they've talked about the benefits of one platform, a single clearinghouse for both energy and environmental products, all of which will be healthy for the environmental space."

To some, ICE's buyout of Climate Exchange did not come as a huge surprise. The two have partnered almost since Climate Exchange's inception, with ICE providing the electronic platform for Climate Exchange's trading operations.

Still, analysts disagree on the likely reasons for the merger. Some said ICE recognized significant advantages to increasing its footprint in the European market, where carbon and energy trading are closely linked. Others said the ongoing tepidness of the voluntary U.S. carbon market, uncertainty that Congress can pass climate legislation, and high likelihood that U.S. officials will not let companies count existing emissions credits toward compliance in a federal program contributed to the decision to sell.

The European Climate Exchange represents about 90 percent of all exchange-traded carbon transactions under the European Union's Emission Trading System. 

"In Europe, you can't trade power without trading carbon," said Emilie Mazzacurati, manager of North American carbon market research at Point Carbon. "It only makes sense that there is further integration."

Buying into uncertainty, but potential growth

The U.S. carbon market is hamstrung by political uncertainty, but Mazzacurati said the Chicago Climate Exchange is still a smart investment for boosting ICE's position as a major trading platform in the United States.

"In the U.S., it's really the potential growth that they're buying," she said, referring primarily to the futures exchange, which has a strong hand in developing offsets contracts.

The big unknown, she and others said, is what happens to the underlying trading program for emissions allowances. That program, which started out in 2003 with 13 charter members, including American Electric Power, DuPont and Ford Motor Co., requires companies to cut their emissions 6 percent by the end of 2010. Prices for those allowances have dropped to just 10 cents per metric ton of carbon dioxide.



Sandor started his career as an economics teacher at the University of California, Berkeley, during the 1960s. Financial engineering, however, became his line of work. He created interest-rate futures, which during the 1970s became a widely traded hedge against fluctuating rates. He went on to become the chief economist of the Chicago Board of Trade, and helped push onto that exchange U.S. EPA's acid rain program that requires electric utilities to buy and sell sulfur dioxide emissions permits. He figured that model, devised for a larger market, could work just as well for global greenhouse gas emissions.

Sandor sought start-up funding from the philanthropic Joyce Foundation for a carbon exchange in 2000. Trading permits to pollute and other financial contracts would allow the U.S. economy to absorb emissions reductions in the cheapest and most efficient way possible, he argued. If things went right, his voluntary carbon market would become a de facto platform for a national cap-and-trade program.

Prospects for that seemed brightest at the start of 2009, once President Obama took office and the House began writing language for a cap-and-trade bill. Since then, Congress has bottled up cap-and-trade proposals, and the public is again questioning the science of climate change. In addition, Sandor's exchange has often been the target of environmental groups and others concerned about fraud in the system. Offsets, often privately negotiated in the form of options contracts, allow a company to earn credits for helping fund emissions reductions in other corners of the world.

Inherent problems verifying agricultural emissions reductions on U.S. farms and in developing countries raised questions about the integrity of offset credits designed to count for real emissions reductions. Chicago Climate Exchange's decision to offer landowners payments for a broad list of offset projects, including no-tillage farming many had done long before the offset contract existed, attracted critics.

"Going forward we believe the pure voluntary market is most vulnerable in the U.S., where public opinion appears to be moving away from concerns over global warming," analysts with Bloomberg New Energy Finance wrote in a February research note.

U.S. carbon prices drop

Public opinion doesn't trump bill language and economics, though. Milo Sjardin of New Energy Finance said U.S. carbon trading volumes and prices have dropped through the floor as a result of clear signals from Congress, contained in both House and Senate versions of legislation, that offset credits purchased before 2009 could not be transferred into a federal compliance market. Where an oversupply of allowances goes after the Chicago Climate Exchange program expires in 2010 is also up in the air.

"Demand for emissions reductions could spill over into the OTC market," said the research note, creating fresh demand for offset projects.

Traders also withdrew from the Chicago carbon futures exchange during the past six months. Again, both the House and Senate bills would slash the value of speculative contracts trading as part of the Northeast's Regional Greenhouse Gas Initiative.

Cap-and-trade critics viewed Sandor's sell-off of the Chicago Climate Exchange as another signal that the carbon-trading approach to cleaning the air is too big and problematic to work in any practical sense.

"This is something that [Sandor] has been promoting for well over a decade," said William O'Keefe, chairman of the George C. Marshall Institute. "It has never taken off."

O'Keefe guesses that implementing and growing the carbon market ended up being far more difficult than Sandor anticipated. In the late 1990s, O'Keefe recalled, Sandor promoted the idea as if it would work like the New York Stock Exchange. 

"It's not like a regular market, it's not like the SO2 market," O'Keefe said, referring to the more limited trading of sulfur dioxide permits.

Collapse of Chicago Climate Exchange Means a Strategy Shift on Global Warming Curbs

By Ed Barnes, Fox News
November 9, 2010 

The closing this week of the Chicago Climate Exchange, which was envisioned to be the key player in the trillion-dollar "cap and trade" market, was the final nail in the coffin of the Obama administration's effort to pass the controversial program meant to combat global warming.

"It is dead for the foreseeable future," said Myron Ebell, director of the Center for Energy and the Environment with the Competitive Energy Institute, which had fought the measure.

That assessment was echoed by environmentalists as well.

"Economy-wide cap and trade died of what amounts to natural causes in Washington," said Fred Krupp, president of the Environmental Defense Fund, which had supported the plan.

The CCX was set up in 2000 in anticipation of the United States joining Europe and other countries around the world to create a market that would reduce the emission of greenhouse gases. Under the system, factories, utilities and other businesses would be given an emissions target. Those that emitted less fewer regulated gases than their target could sell the "excess" to someone who was above target. Each year, the target figures would be reset lower.

The Exchange was the brainchild of Richard Sandor, an economist and professor at Northwestern University, and it was modeled after a successful program that was launched in 1990 and helped control acid rain in the Midwest. It was initially funded by a $1.1 million grant from the Joyce Foundation of Chicago, and President Obama was a board member at the time.

After the Democrats won the White House, the House and the Senate in 2008, businesses and investors flocked to the exchange, believing Congress would quickly approve the program. And it almost happened.

The House of Representatives passed a bill proposed by Democratic Reps. Henry Waxman of California and Ed Markey of Massachusetts, which would have made cap and trade law. But the Senate couldn't muster the votes, and everything went downhill from there.

"When those that voted for the measure in 2009 went home on July 4th after the vote, they met widespread outrage among their constituents," said Nick Loris, an analyst with Heritage Foundation.

Conservatives renamed the idea "cap and tax," and they began an assault on the program.

In the last week, following the Nov. 2 Republican takeover of the House of Representatives, the slide became an avalanche.

Investors in CCX, including Sandor and former Vice President Al Gore, sold the exchange to a company involved in commodities trading. Sale records show that Sandor cleared more than $90 million for his 16 percent stake in the company.

Meanwhile, the White House has dropped all references to cap and trade from its web site; and, unlike the heralded climate summit in Copenhagen last year, a 10-day meeting in Mexico beginning Nov. 29 on the next steps to battle global warming has not even mentioned publicly by the administration.

"The pieces of the puzzle just kept breaking off," Loris said. "And Obama has given up on it.”

But both Loris and Ebell say that isn't necessarily cause for celebrating.

"I would like to have a party and say we won, but the truth is were are still in the middle of it," Ebell said. "The problem is now that the administration changed strategy and is using existing laws and regulations, like the Clean Air Act, the Endangered Species Act and EPA regulations to implement its agenda. And unlike the cap and trade effort, it is much harder to get the public excited about rule changes."

"Obama will try a piecemeal approach," Loris said. "And they have a much better chance of becoming law than cap and trade ever did.”

Republicans in the new Congress, for their part, will try to pass a law "to stop all regulation of greenhouse gases using existing legal authority," Ebell said.

"And we are pretty sure we can get 60 votes in the Senate on it."

Chicago Climate Exchange to shut down emissions trading

CNNMoney.com
November 17, 2010

The Chicago Climate Exchange, a pilot program for the trading of greenhouse gases in the U.S., is shutting down for lack of legislative interest.

Chicago Climate Exchange Inc., will close down its cap-and-trade market by the end of the year, said spokeswoman Brookly McLaughlin.

This will effectively end the trading of emissions credits in North America. The exchange will, however, continue some activities until 2012, including the mitigating of emissions in farming and forestry through a crediting process, said McLaughlin.

IntercontinentalExchange (ICE), an Atlanta-based operator of exchanges and markets, confirmed that it is winding down the Chicago Climate Exchange, which is the American part of a larger, international company called Climate Exchange.

IntercontinentalExchange is closing the Chicago operations just months after paying nearly $600 million for Climate Exchange. But the company will continue to operate the Climate Exchange's markets for greenhouse gases in Europe, said spokeswoman Melanie Shale.

Shale said that emissions trading, also known as cap and trade, effectively ended in the U.S. when climate legislation died in the Senate. But it's still going strong overseas, she said.

"It has to do with the current administration and their outlook on the U.S. for cap and trade," said Shale. "Obviously it's a market that's moving forward in Europe."

She added that the Climate Exchange "was purchased for its bigger European business."

Chicago Climate Exchange Closes Nation's First Cap-And-Trade System but Keeps Eye to the Future

Don’t count these liars out yet. After all most of you still believe the 9/11 lies and there is very rarely a week that goes by that they don’t rub that in your faces. Humans are too stupid to stay free, and that’s not just the opinion of the NWO royalty; it’s the truth. As a nuclear power activist trying to expose the ongoing coverup of Fukushima, the fires at Los Alamos, the floods at Ft. Calhoun, the ongoing radiation releases at Sellafield, the 2000+ nuclear tests worldwide – the people actually are mad at ME for telling them instead of their newspapers that lie and lie and lie and lie and lie every day. May God forgive us, because it is already over. [buibuibui, August 10, 2011]

By Nathanial Gronewold of ClimateWire
Published by The New York Times on January 3, 2011

The nation's first experiment in carbon emissions cap and trade has come to an end, but its mark on the climate change industry will be felt for some time to come.

The second commitment period for member companies of the Chicago Climate Exchange ended as of Dec. 31, 2010, and there will be no new cycle to ring in the new year. Exchange trading in the allowances the system generated, known as Carbon Financial Instruments (CFIs), to meet emission reduction commitments ends, as well, although CFI generation will continue as a strictly voluntary greenhouse gas emissions offset system.

Meanwhile, CCX's sister institutions, the European Climate Exchange and the Chicago Climate Futures Exchange, will continue as long as there is corporate and state government interest in fighting climate change, even with the failure of cap and trade in the U.S. Congress, CCX officials insist.

And former member companies say they have no regrets about participating in the admittedly flawed system. They praise the lessons they learned ahead of the slow spread of state-driven cap-and-trade initiatives from the Northeast to California and possibly the West.

"We're glad to have had the experience," said Jennifer Orgolini, sustainability director at New Belgium Brewing Co., one of the smallest former members. "I don't regret joining it."

Though celebrated by climate activists at its launch in 2003, CCX became plagued by a flood of credits from offset project generators that collapsed the CFI market, sending exchange prices to a nickel per unit. Highlighting this collapse, many in the U.S. carbon trading community openly questioned the legitimacy of the system itself, putting founder Richard Sandor and his team on the defensive at periodic carbon market conferences held in Washington, D.C., and New York.

So when the new parent company IntercontinentalExchange announced the end of mandatory CFI trading by member companies in October, much of the media reacted with quasi obituaries for CCX itself. Coming as it did on the heels of failed climate legislation in Congress, a fiasco at international climate change negotiations in Copenhagen, Denmark, and the collapse in the price for allowances under the Regional Greenhouse Gas Initiative (RGGI), CCX's closure seemed to confirm the death of the very concept of cap and trade itself.

Calif. keeps hope alive

But California's recent moves toward mandatory emissions trading is breathing new life into the market. RGGI officials are also in talks to reform their system. And CCX officials say that although they've closed their contractually binding trading platform, they aim to leverage their relationship with some of the nation's largest companies to revitalize the voluntary carbon market, while maintaining their dominant position as the largest host of trading in a variety of environmental commodities.

"The point was to get companies familiar with allowances and trading, and how to do that and how to use offsets and exchange them on a platform. And that has all been accomplished," said Lisa Zelljadt, an analyst at the carbon market research firm Point Carbon. "So with the advent of mandatory programs like RGGI and now California ... the sort of experimental value of CCX as it was is over."

But new participants are still welcome, says Brookly McLaughlin, a CCX spokeswoman.

"They can participate through ... the offsets registry," she said. "The credits will be offset project driven" and will continue to be called CFIs, McLaughlin added.

The central problem hurting mandatory carbon markets globally has been an abundance of allowances at the start of the programs, usually in the face of weak demand.

Prices at the European Union's Emission Trading System nearly fell through the floor after political haggling led governments to over-allocate allowances to influential industries. E.U. allowance prices have recovered since the first commitment period but still face downward pressure from a weak economy.

Likewise, RGGI allowances are now at their legal price floor after a shale gas boom in Pennsylvania transformed the energy mix in the 10 Northeastern member states.

Transitioning to offsets only

Carbon market experts say the CFI market suffered the same fate, but for different reasons.

Unlike in other systems, CFIs were both allowances and emissions offsets credits. Offset project developers could generate CFIs in the system even as they faced no obligation to purchase the allowances to meet reduction commitments faced by the 450 member companies.

Thus, demand for the allowances was relatively fixed, while supply was seemingly endless. CFIs once traded as high as $7.50 per metric ton of CO2-equivalent emissions, but as of last Friday, the exchange trading price was just 5 cents, the same price they've been at for more than a year.

"Quite frankly, the market has pretty much collapsed," said James Hugh, who handles CCX transactions for the utility PSEG. "There really isn't all that much to do there."

CCX officials say the picture is skewed because 95 percent of trades occur in so-called over-the-counter (OTC) transactions that don't show up in spot trading data. OTC market prices have held better in recent months, averaging $3.41 as late as October last year.

In fact, the obvious preference for OTC trading is what led IntercontinentalExchange to kill the open exchange platform. Member companies were polled prior to the decision, and most reported back that they preferred that no third commitment period be offered and instead favored the new approach, a transition to just offsets, CCX officials say.

Hugh admits that PSEG will likely be left with more CFIs than it needs when the company fulfills its obligations to CCX and finishes its reporting requirements this year. Member companies were mandated to accomplish a cut of at least 6 percent of their baseline emissions reductions during the second commitment period, but were free to exceed that target.

Company says it values CCX experience

Hugh guesses several companies are in the same situation with regard to their CFIs and will simply do what PSEG plans to -- bank them in the hopes that a future cap-and-trade system will accept them.

"I would expect that people will probably continue to hold onto them if they have them immediately, because honestly, there's not much else to do with them at this point," he said. "To the extent that there's some program in the future that recognizes them, people will hold them for that."

Orgolini at New Belgium Brewing, a small craft beer maker based in Fort Collins, Colo., says she likely will have to turn in all the company's remaining CFIs when it and other companies report in over the next couple months. But she admits that, as one of the smallest CCX members, with a light carbon footprint, her company's trading activity wasn't all that extensive.

"Our emissions were on the scale of just a handful of CFIs," she said. "For several years, we just held onto our credits. We didn't trade them, and then in later years, as our growth kind of overcame our reductions, we applied those credits."

But Orgolini insists that her firm is happy to have been a member. The chance to join the nation's only carbon trading platform back in 2003 was one her environmentally conscious firm couldn't pass up, she said.

Despite the market collapse and lax enthusiasm for continuing the system as is, CCX's new Atlanta-based managers at IntercontinentalExchange say they consider the experiment a success. CCX's creators, who have since moved on to form the advisory service Environmental Financial Products LLC, declined to comment for this report.

CCX says its 450 members achieved reductions of 700 million tons of greenhouse gas emissions over the seven-year life of the cap-and-trade program, 88 percent through direct industrial emission cuts and 12 percent through offsetting. Its final estimated average price for the CFI throughout the term comes to $3.26 per metric ton, about comparable to other voluntary offsets credits sold in the United States.

"It has provided cost-effective and market-based flexibility for reducing greenhouse gas emissions through an exchange platform with price transparency and independently verified reductions," the company boasted in a release. "CCX facilitated investment in new businesses, technologies and innovative products and helped companies to build the skills and institutions needed to manage climate risks."

And despite its negligible impact on the larger fight against climate change, all in all, the Chicago Climate Exchange was a worthy endeavor, said Zelljadt.

"Definitely, the businesses that participated in CCX have gained some valuable experience," she said.

"They dealt with actual emissions units, emissions permits, the things you deal with in an emissions trading system. And that's very useful."