Major carbon trading company going out of business

Let’s recall what carbon trading means. Governments, or a single global government,—either way we’ll call it the Global Climate Regime—would place limits on the amount of carbon emissions that every industrial concern in the world can produce. That’s the “cap” in “cap and trade.” But the Global Climate Regime would place different limits on some industrial concerns—or some countries as a whole—than on others. Politically favored entities would get higher quotas. Entities that have higher quotas, or that do not produce carbon, would have unused carbon “credits,” which they could then sell to entities whose carbon quotas are all used up. Thus, by capping carbon production, the Global Climate Regime instantly produces a vast new form of wealth—carbon credits—and a staggering transfer of wealth from the unfavored entities that produce carbon emissions to the favored entities that don’t. Wealth is also transferred to the newly formed businesses, such as Chicago Climate Exchange, that specialize in trading the carbon credits. It’s not exactly socialism, but a managerial death grip over industry that is even more perverse than socialism.

That’s why you should read Atlas Shrugged, regardless of what you think of Ayn Rand’s philosophy. Rand describes in horrifying and sometimes hilarious detail a fictional America which is not socialist per se, because the government doesn’t own the means of production, but in which the government, by means of such laws as the Anti-Dog-Eat-Dog Act and the Equalization of Opportunity Act, equalizes, and ultimately destroys, all industrial concerns by rewarding the unproductive ones and punishing the productive ones. By some prophetic intuition, Rand understood that America would not opt for government ownership of industry, such as had taken place in Britain at the time she began writing Atlas Shrugged, but rather for a crushing egalitarian government control of industry, such as we see in Obamacare.

Steve Milloy writes at Pajamas Media (via NRO):

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.

Posted by Lawrence Auster at November 08, 2010 10:05 AM | Send