Obama, the Chicago Climate Exchange, and the Climate Billionaires

U.S. unveils sweeping plan to slash power plant pollution

Ahead of power plant push, Obama ties climate change to health hazards

June 2, 2014

Rueters - The U.S. power sector must cut carbon dioxide emissions 30 percent by 2030 from 2005 levels under federal regulations unveiled on Monday that form the centerpiece of the Obama administration's climate change strategy.

The Environmental Protection Agency's proposal is one of the most significant environmental rules proposed by the United States, and could transform the power sector, which relies on coal for nearly 38 percent of electricity. It also set off a political backlash likely to run well into next year.

Gina McCarthy, EPA administrator, said on Monday that between 2020 and 2030, the amount of carbon dioxide the proposal would reduce would be more than double the carbon pollution from the entire U.S. power sector in 2012.

States will have flexible means to achieve ambitious but attainable targets, regardless of their current energy mixes. States which rely heavily on coal-fired power plants are thought to have the toughest tasks ahead.

"The flexibility of our Clean Power Plan affords states the choices that lead them to a healthier future. Choices that level the playing field, and keep options on the table, not off," McCarthy said in remarks at EPA headquarters on Monday.

The plan had come under pre-emptive attack from business groups and many Republican lawmakers as well as Democrats from coal-heavy states like West Virginia before it was unveiled.

But the 645-page plan looked less restrictive than some had feared, with targets easier to reach because emissions had already fallen by about 10 percent by 2013 from the 2005 baseline level, partly due to retirement of coal plants in favor of cleaner-burning natural gas.

The plan gives states multiple options to achieve their emission targets, such as improving power plant heat rates; using more natural gas plants to replace coal plants; ramping up zero-carbon energy, such as solar or nuclear; and increasing energy efficiency.

States can also use measures such as carbon cap-and-trade systems as a way to meet their goals.
Share prices for major U.S. coal producers like Arch Coal, Peabody Energy and Alpha Natural Resources closed at or near multi-year lows on Monday.

A LEGACY ISSUE

Monday's rules cap months of outreach by the EPA and White House officials to an array of interests groups.

The country's roughly 1,000 power plants, which account for nearly 40 percent of U.S. carbon emissions, face limits on carbon pollution for the first time.

Climate change is a legacy issue for President Barack Obama, who has struggled to make headway on foreign and domestic policy goals since his re-election.

But major hurdles remain. The EPA's rules are expected to stir legal challenges on whether the agency has overstepped its authority. A 120-day public comment period follows the rules' release.

The National Association of Manufacturers, a long-time EPA foe, argued on Monday that the power plant plan was "a direct threat" to its members' competitiveness. 

The electric utility industry, encompassing plants that use resources from coal and natural gas to wind was more circumspect about the plan.

“While the 2030 reduction target is ambitious, it appears that utilities may be allowed to take advantage of some of their early actions,” the Edison Electric Institute said.

Lawmakers representing big coal states lashed out.

Mitch McConnell of Kentucky, Republican leader in the U.S. Senate, termed the rules a "dagger to the heart of the middle class" that would damage the economy.

Republicans are trying to wrest control of the Senate from Democrats in November's elections. Four of the states with Senate seats in play are among the top 10 coal producers nationally: West Virginia, Kentucky, Montana and Colorado.

Obama, on a conference call with public health groups, said Americans' electricity bills would shrink, not rise, as the rules spur investment in new technologies.

On the contrary, in January 2008, Barack Obama said (see video above): "Under my plan of a cap and trade system, electricity rates would necessarily skyrocket."

The EPA's McCarthy also forecast that the regulations could yield over $90 billion dollars in climate and health benefits.

Soot and smog reductions that would be achieved through the plan would translate into a $7 health benefit for every dollar invested in the plan, she said.

The EPA estimates that reducing exposure to particle pollution and ozone could prevent up to 150,000 asthma attacks in children and as many as 3,300 heart attacks by 2030, among other impacts.

The rules, when finalized, could give Washington more clout in international talks next year to develop a framework for fighting climate change. The United States is eager for emerging industrial economies such as China and India to do more to reduce their emissions.

Comments:

Carbon tax schemes are predicated on the illusion of anthropogenic climate change. Man-made carbon dioxide emissions throughout human history, however, constitute less than 0.00022 percent of the total naturally emitted from the mantle of the earth during geological history. Significant changes in climate have continually occurred throughout geologic time. A large body of scientific research — including a NASA study — suggests that the sun is responsible for the greater share of climate change during the past hundred years, not humans.

Trading carbon credits in carbon markets is the newest investment scheme. Energy traders and Wall Street financiers are at the heart of this scheme. The Chicago Climate Exchange (a carbon trading exchange), which includes some 400 companies, is now the largest cap-and-trade market in the world. The largest shareholder in the Exchange is Goldman Sachs.

While on the board of the Chicago-based Joyce Foundation, Barack Obama helped fund the Chicago Climate Exchange, which will likely play a critical role in the cap-and-trade carbon reduction program he has pushed through Congress as president. In 2000 and 2001, while still a state senator, Obama voted along with other members of the board of the Joyce Foundation to give more than $1.1 million to help the Climate Exchange get off the ground.

The “privately-owned” Chicago Climate Exchange is heavily influenced by Al Gore and Maurice Strong. For years now, Gore and Strong have been cashing in on lucrative carbon trading schemes.

Gore 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 is on the board of directors of the Chicago Climate Exchange, Wikipedia-described as “the world’s first, and North America’s only, cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide.”  Strong, the silent partner (the Canadian-born Strong is little known in the United States), is 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. He spends most of his time in China where 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 Kyoto Protocol.

The Climate Exchange is the brainchild of Richard Sandor, an economics professor who has worked for both the Chicago Mercantile Association and the Chicago Board of Trade. Known as "Mr. Derivative" for his work in creating interest rate futures markets, Sandor first proposed the creation of the Climate Exchange in 2000, just before the signing of the Kyoto Accord on greenhouse gas reduction. The United States subsequently refused to participate in the accords. Speaking at the State of Green Business Forum in Chicago in 2010, Sandor urged the attendees to do whatever they could to push for a national cap-and-trade program. After giving a quick history of where value creation for businesses came from in past decades, he said that the next big area for value creation will be in the commoditization of air and water -- they will be made commodities through cap and trade (see the video, "The Story of Cap and Trade," https://www.youtube.com/watch?v=ZYi78LaY8u4). In the case of carbon, that would set quotas for carbon emissions, and those who exceed their quotas can trade those extra cuts to those that are unable to use their own quotas.

Globally, the number of CDM projects (UN-backed clean development mechanism) entering the pipeline is increasing rapidly. The onset of a carbon tax is already underway in numerous countries (the World Bank will be the collection agency for a global CO2 tax). In January 2005, a new system of CO2 emissions trading went into effect in the European Union. David Miliband, the UK's environment secretary, announced that Britain would become the world's first nation to legislate a climate change bill setting legally binding timetables for a low-carbon economy. This decision affects every British industry, business and household. Britain's former prime minister, Gordon Brown, said: "My ambition is to build a global carbon market founded on the EU emissions trading scheme and centered in London." Every citizen would be issued a carbon "credit card" or "ration card" — to be swiped every time they buy petrol, pay an energy utility bill, or book an airline ticket — under a nationwide carbon rationing scheme (according to a feasibility study commissioned by Miliband). Under the scheme, everybody would be given an annual allowance of the carbon they could expend on a range of products, probably food, energy and travel. If they wanted to use more carbon, they would be able to buy it from somebody else on a carbon exchange. In the future, each person will start the year with 1,000 carbon credits, for example, on a carbon ration card. Personal carbon rations would cover everyone’s direct use of energy in the household and for personal transport, including air travel. Each time someone fills up their car, for example, they would put the card in a slot on the pump and it will deduct a few points.

The main features of personal carbon rations are:
· An equal annual ration is allocated for each adult, with a smaller one for children.
· Rations are tradable.
· The ration covers the direct energy used in the household and for personal travel.
· A phased year-on-year reducing ration is signaled well in advance.
· The arrangement is mandatory (in order to be effective, carbon rationing would have to be mandatory, just like Obamacare)

From the document, "Kyoto Chip - Awareness raising of personal CO2":

"There is no easy technical way to deal with CO2. The best way to reduce it and the other emissions is to use the car only when it is necessary and to cycle, walk or use public transport where possible. Personal awareness is the other path to follow. It is obvious that not only the choice of which vehicle and its fuel efficiency is important, but also how much use is made of the vehicle.

"The approach suggested in this document aims at creating even greater awareness and an active personal involvement by individual European citizens in their personal level of CO2 emission. Once every driver knows their annual allowance, and how much their vehicle uses, then they can make much better choices about the trips they make and which mode they choose to make them.

"Part of this is already done in the UK where the annual ‘road tax’ is based on the CO2 emissions of the vehicle you own. We believe that the next logical step is to empower citizens by giving them the knowledge and possibility to make a real change based on their choices and behavior.

"The ’Kyoto Chip’ is about CO2 rationing on a personal level and -- doing so- - raising more awareness about personal CO2 use. David Miliband, the UK environment secretary, is keen to set up a pilot scheme to test the idea, and has asked officials from four government departments to report on how it could be done. The move marks the first serious step towards state-enforced limits on the carbon use of individuals, which scientists say may be necessary in the fight against climate change."

"It extends the principle of carbon trading -- already in place between heavy polluters such as power companies and steel makers -- to consumers, with heavy carbon users forced to buy unused allowances from people with greener lifestyles."

http://www.velomondial.net/page_display.asp?pid=29

Climate Protection Act of 2013: Get Ready for a Tax on Breathing

U.S. Policy: Carbon Pricing Proposals of the 113th Congress

April 2013

C2ES - Market-based policies that put a price on greenhouse gases can achieve cost-effective reduction in emissions while driving clean energy innovation. In the United States, attention has recently turned to the possibility of a carbon fee as an element of a broader package addressing tax or budgetary issues. Below is a comparison of a proposal that has been introduced in the U.S. Senate and a discussion draft released by a group of representatives and senators.

The following table compares the Climate Protection Act of 2013 (S. 332), as introduced by Sens. Bernie Sanders (I-VT) and Barbara Boxer (D-CA) on February 14, 2013, and the Carbon Pollution Fee discussion draft, as released by Rep. Henry Waxman (D-CA), Sen. Sheldon Whitehouse (D-RI), Rep. Earl Blumenauer (D-OR), and Sen. Brian Schatz (D-HI) on March 12, 2013. While both proposals would institute a fee on carbon (i.e., a carbon tax), the proposals differ on the coverage and scope of the respective programs. For instance, the Sanders-Boxer proposal would require certain upstream or midstream fossil fuel sources (i.e., coal mines, refineries, natural gas processing plants, or importers) to pay a fee on greenhouse gas emissions while the authors of the discussion draft would require the largest sources covered by the U.S. EPA Greenhouse Gas Reporting Rule to purchase permits for their direct greenhouse gas emissions.

In addition, the proposals differ on: the starting price of the carbon fee, how much to increase the fee each year (i.e., the escalation rate), and how to use the revenues. The Sanders-Boxer proposal would establish a $20 per ton carbon fee, rising 5.6 percent a year over a 10-year period, and would direct 60 percent of the revenues back to consumers through a rebate, and the rest towards investment in renewable energy and energy efficiency, and deficit reduction. The authors of the discussion draft are considering various initial carbon fee and escalation rates as well as uses for generated revenue.

The authors of the discussion draft are seeking public comments on a range of topics, including the use of revenues. Note that certain provisions in the discussion draft are bracketed, which suggests a number of provisions will be refined based on additional analysis and deliberation.

Policy Features	Sens. Sanders and Boxer's Climate Protection Act of 2013	Rep. Waxman, Sen. Whitehouse, Rep. Blumenauer, and Sen. Brian Schatz Carbon Pollution Fee discussion draft
Start Date	The earlier date of January 1, 2014, or the first calendar year beginning at least 180 days after enactment	January 1, 2014
Regulating Authority	Environmental Protection Agency (EPA)	Jointly administered by Treasury Department and EPA. EPA would implement and enforce emissions reporting under EPA's Greenhouse Gas Reporting Rule. Internal Revenue Service (Treasury) would assess, collect, and enforce the fee requirements.
Substances Covered Under a Carbon Pollution Fee	Carbon polluting substance defined as: coal, petroleum, petroleum products, or natural gas that when used, will release greenhouse gas emissions.	Carbon pollution defined as any greenhouse gas—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and other fluorinated greenhouse gases—identified in Table A-1 to Subpart A of the GHG reporting rule. Excludes from coverage: Emissions reported for products that are exported. Carbon pollution that is reported but is associated with a product that has non-emissive use. Quantities of carbon pollution that are attributed to a supplier of natural gas or oil, and are contained in a product that is transferred to an entity that reports direct emission from burning or releasing such product. Quantities of carbon pollution that are permanently sequestered in subsurface geologic formations. Quantities that are biogenic CO2 under the reporting rule (excluded through 2014) and carbon pollution from burning renewable biomass, as defined by the Secretary of Agriculture and the EPA Administrator through joint rulemaking (excluded starting in 2015). Requires any revisions to the U.S. EPA Greenhouse Gas Reporting Rule after the date of enactment of this Act to maintain or enhance the accuracy and completeness of the information required to be reported.
Point of Coverage (i.e, covered entity)	Any manufacturer (such as an oil refinery or natural gas processing facility), producer, or importer of a carbon polluting substance. (Sanders-Boxer estimate their proposal would cover 2,700 facilities, or 85 percent of the U.S. greenhouse gas emissions)	Covered entities are those required to report emissions under the U.S. EPA Greenhouse Gas Reporting Rule requirements of 40 CFR 98. This includes owners and operators of facilities (such as electricity generators) and suppliers of products (such as oil refineries). Facilities are not covered if they emit 50,000 metric tons or less of carbon dioxide equivalent per year in combined annual emissions from stationary fuel sources. Certain sources of fluorinated greenhouse gases are exempted where the associated carbon pollution is also reported by another covered entity. (The sponsors estimate their discussion draft would cover 7,000 facilities, or 85-95 percent of U.S. greenhouse gas emissions)
Emission Targets and Timetables	Bill expresses the sense of Congress that the United States carry out activities to reduce emissions by at least 80 percent below 2005 levels by 2050.	Greenhouse gas emission targets and timetables not specified, except for a 90 percent reduction of emissions from HFCs attributed to specified entities.
Emission Allowance	N/A	A covered entity must purchase a carbon pollution permit for the compliance year by May 1 of the following year. Unless authorized by the Secretary of Treasury, permits are only valid for the specified calendar year and cannot be traded, sold, or banked.
Escalation Rate	Fee imposed on full carbon content of product (including fractional amount). The fee would start at $20 per ton of carbon dioxide content (including carbon dioxide equivalent content of methane) of the carbon polluting substance. In subsequent years, the tax increases by 5.6 percent (rounded to the nearest dollar) above the previous year's amount. Year Applicable amount 1 $20 2 $21 3 $22 4 $23 5 $24 6 $25 7 $26 8 $27 9 $29 10 $31 11 $33 12 or thereafter $35 Five years after enactment of this Act, the EPA Administrator would submit recommendations to Congress on how to best administer the carbon fee program after the 12th calendar year, including recommendations on a future fee schedule.	Fee imposed on carbon pollution emitted during, or attributed to, a compliance year (rounded to the nearest whole ton) as reported by the covered entity under the U.S. EPA Greenhouse Gas Reporting Rule. Sets a carbon permit fee of [$15/$25/$30] per ton of carbon dioxide equivalent of carbon pollution emitted, or attributed, for 2014, increasing at a real rate [2%-8%] annually. Year Applicable amount (in 2014 dollars), (the low rate starts at $15 per ton with a 2 percent escalation; the high rate starts at $30 with an 8 percent escalation) 2014 $15.00 - $30.00 2015 $15.30 - $32.40 2016 $15.61 - $34.99 2017 $15.92 - $37.79 2018 $16.24 - $40.81 2019 $16.56 - $44.08 2020 $16.89 - $47.61 2021 $17.23 - $51.41 2022 $17.57 - $55.53 2023 $17.93 - $59.97 2024 $18.28 - $64.77 2025 $18.65 - $69.95 Sets an excess carbon pollution penalty of three times the applicable permit fee per ton of carbon pollution emitted (or for which it was attributed) without a permit.
Credits or Refunds	Not specified.	Requires the Secretary of Treasury to refund fees for any extra permits obtained by a covered entity for a compliance year.
Energy Intensive, Trade Exposed	Imposes a carbon equivalency fee on imports of carbon-intensive goods. This annual fee would be differentiated by classes of products and country of origin, taking into account the amount of greenhouse gas emissions released during the manufacture and transport of the carbon pollution-intensive good. This fee would expire when exporting countries adopt equivalent measures, or the EPA Administrator deems it no longer appropriate.	Exported products whose emissions are required to be under EPA's Greenhouse Gas Reporting Rule are excluded from purchasing a carbon pollution permit.
Use of Revenue	60 percent of the revenues (not including the import fee) would be rebated to U.S. citizens and legal residents on a monthly basis. 40 percent of the revenues will be allocated to a Pollution Reduction Trust. For each of the first 10 years, this fund will allocate: $7.5 billion to mitigate impacts of the fee on energy intensive-trade exposed industries; $5 billion for weatherization of low income homes; $1 billion for clean energy job training; $2 billion for ARPA-E; and the balance would go toward deficit reduction. Carbon equivalency fee on imports would be evenly split between building/improving critical infrastructure and improving resiliency to climate change.	[To be supplied. Seeking comments on the use of revenues, such as: mitigating energy costs for low-income households, reducing the federal deficit, reducing the tax liability for individuals and businesses, protecting jobs of energy-intensive trade exposed industries, and investing in other activities to reduce greenhouse gas emissions.]
Treatment of Existing State Programs	Not specified.	[To be supplied.]
Other	The bill would create a $5 billion Sustainable Technologies Finance program under EPA to provide financial assistance (i.e. loans, credits, loan guarantees) for eligible projects (e.g., renewables, energy efficiency, and advanced transportation projects) that reduce greenhouse gas emissions. The bill would strengthen EPA's authority to regulate hydraulic fracturing, including requiring gas operators to disclose chemicals used in the fracking process. EPA would also be authorized to assess civil penalties for violations of those regulations up to $10,000 per day but capped at $125,000.	Does not affect the application of any other provision of law to a covered entity.

Other C2ES Resources:

Climate Debate in Congress

Carbon Tax Resources

Options and Considerations for a Federal Carbon Tax, February 2013.

Market Mechanisms: Understanding the Options, March 2012.

Australia's Carbon Price Mechanism, December 2011.

		The Center for Climate and Energy Solutions (C2ES) is an independent nonprofit organization working to promote practical, effective policies and actions to address the twin challenges of energy and climate change.
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U.S. Carbon Tax Could Halve Deficit in 10 Years

U.S. Carbon Tax Could Halve Deficit in 10 Years: Report

September 26, 2012

Reuters Point Carbon - Imposing a $20 per metric ton carbon tax in the U.S. could reduce the country's budget deficit by 50 percent over the next 10 years, a report by the Congressional Research Service said on Tuesday.

Such a tax would generate approximately $88 billion in 2012, rising to $144 billion by 2020, the report said, slashing U.S. debt by between 12 and 50 percent within a decade, depending on how high the deficit climbs.

The U.S. budget deficit has exceeded $1 trillion annually in each fiscal year since 2009, and could rise to between $2.3 trillion and $10 trillion by 2020, according to the Congressional Budget Office (CBO).

Since deficits can lead to reduced savings, higher interest rates and higher levels of inflation, reducing them is a high-priority issue in Washington.

The concept of using a carbon tax to combat the problem has been floated in Congress this year, but it comes with many potential downsides, the report added.

For example, households would face higher energy bills because utilities forced to pay the tax would likely pass the costs onto consumers.

"Lower-income households, in particular, would face a disproportionate impact if revenues were not recycled back to them in some fashion," the report said.

Returning money to consumers would mean fewer funds available for cutting the deficit.

And unlike a cap-and-trade system, where the government would set a hard limit on the amount of CO2 that could be released into the atmosphere, a carbon tax could not ensure a specific environmental outcome, the study said.

The likelihood of Congress passing such a measure would be limited, given the opposition of many Republican lawmakers to any type of tax increase.

Despite the odds, some politicians in Washington continue to promote the idea.

Former Republican Congressmen Sherwood Boehlert and Wayne Gilchrest joined Democrats Henry Waxman and Ed Markey to support a carbon tax in February.

In July, former Republican Congressman Bob Inglis launched a think tank to promote a plan to raise taxes on fossil fuels while cutting income tax, a concept previously supported by former Democratic Vice President Al Gore.

Democratic Congressman Jim McDermott last month introduced a Managed Carbon Price (MCP) bill to cut and put a price on carbon emissions, while returning some money to consumers and using the rest to reduce the deficit.

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