American Carbon Trading Exchange Dies

The Chicago Climate Exchange (CCX), which received start-up funding from the socialist Joyce Foundation on whose board Barack Obama served, announced on 21 October that it was ending its carbon trading mission.  The CCX has provided voluntary, but legally binding, greenhouse gas reduction pledges or offsetting carbon emissions permits.  CCX was an investment of Al Gore's Generation Investment Management and the political clout machine at Goldman Sachs.  While voluntary at first, the CCX was anticipating the massive theft of wealth from Americans upon the Waxman-Markey cap and trade law being passed to make carbon trading mandatory.  Steve Milloy noted on 6 November that the media has completely ignored the failure of the CCX, which they had done so much to promote.

The failure of the Copenhagan meeting to set up a greenhouse gas emissions reduction commitment to follow the Kyoto Protocol which is ending in 2012, the refusal of the U.S. Senate to pass cap and trade legislation, the Great Socialist Recession, ClimateGate, the scientific failure of the catastrophic man-made global warming hypothesis, the surge of the Tea Party movement, and the upcoming Republican control of the House of Representatives, a renewed balance in the Senate, and the Republican control of most state governorships and legislatures have finally slowed down the momentum of the wrongheaded crusade against the use of fossil fuels with requirements to substitute unreliable and very expensive so-called "sustainable energy."

GM, Ford, IBM, American Electric Power, Chevron Oil, Intel, Bank of America, GE, BP, Alcoa, Caterpillar, and FP&L are among many companies who have bought carbon offsets or pledged reductions instead of investing in new equipment or keeping long-time employee Joe on during the Great Socialist Recession.  Not to be too cavalier, there are some cases in which energy use reductions actually did make economic sense, though buying carbon emissions credits never did.  Overall, political and environmental pressures certainly did distort the market and did cause many Joe's to be let go and other young David's to never be offered their first job.  GM, American Electric Power, and Chevron were buying trees in Brazil in order to get emissions credits.  Each of these companies has laid people off during the recession, while they played the ruse of being environmentally conscious.  Indeed, there are many claims that two-thirds of the carbon emissions reductions claimed on the exchanges are bogus, but they still cost money to play the game.

The value of Greenhouse Gas Emissions credits traded in the U.S. dropped 47% to $387.4 in 2009.  The volume of trades of CO2 tons fell by 26% to 93.7 million tons, though that was a volume 39% higher than in 2007.  The fact the value of trades fell more than did the volume shows that the value of a ton of CO2 was lower in 2009.  It is now much lower in 2010!  The HSBC climate index follows companies making at least 10% of their total revenues from selling goods and services related to climate change and dropped CCX and Trading Emissions from their index when the value of their market capitalization fell below $400 million as the share prices of these firms fell 37% between 1 September 2009 and 19 March 2010.  The CCX was bought by the IntercontinentalExchange Inc. or ICE, along with the European Climate Exchange and the Chicago Climate Futures Exchange, in April 2010 for about $634.5 million.  The European Climate Exchange is still bolstered by mandatory carbon trading requirements due to the Kyoto Protocol.


While mandatory carbon trading requirements do not have a national basis in the U.S., they are required in some regions of the U.S.  The Regional Greenhouse Gas Initiative in the Northeast and Middle Atlantic states has Maryland, Delaware, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, and Maine as members.  This group of masochistic states is committed to the following state economy mass destruction goals for the region:

2009 - 2014, 188,076,976 short tons of CO2 Emissions, 0% growth
2015, 183,375,052 tons, 2.50% reduction, 1 and one-third years of the output of the Kilauea Volcano in Hawaii, of one many tens of thousands of volcanic vents on land and underwater
2016, 178,673,127 tons, 2.56% reduction
2017, 173,971,203 tons, 2.63% reduction
2018, 169,269,278 tons, 2.70% reduction

Now using energy efficiently is wise, but the entire purpose of the state mandates is to drive companies to make energy use reductions that do not make economic sense.  This Northeast - Middle Atlantic alliance is not the only regional alliance requiring member states or provinces to commit Hari Kari.  The Western Climate Initiative is another.  A wise investor would bet against energy-intensive companies with major operations in either set of states.  Those in the Western Climate Initiative are California, Arizona, New Mexico, Oregon, Washington, Utah, Montana, British Columbia, Manitoba, Ontario, and Quebec.  These state based requirements are providing business for the European Climate Exchange.

Kristel Dorion who has worked for 10 years on carbon offset projects under the United Nation's Clean Development Mechanisms program says that investors are looking elsewhere than carbon offsets.  It is about time.