Gore Pocketed ~$18 Million from Now-Defunct Chicago Climate Exchange
Hockey Schtick

Although the Chicago Climate Exchange (CCX) collapsed and shut down this week, Al Gore’s Generation Investment Management LLP pocketed approximately $17.8 million on it’s 2.98% share of the exchange when it was sold to the publically traded Intercontinental Exchange a mere 6 months ago. According to news reports, the brainchild of the exchange, academic Richard Sandor, founded the exchange with a foundation gift of $1.1 million, and pocketed $98.5 million for his 16.5% share of the CCX. This would place the value of Gore’s firm’s stake at almost $18 million. Note Gore is the founder, chairman, and largest shareholder in Generation Investment Management LLP. Barack Obama was on the Joyce Foundation Board when it provided the funding to establish the CCX. Maurice Strong, founding head of the United Nations Environmental Program (UNEP), precursor to the IPCC, was a CCX board member.

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

By Ed Barnes Published November 09, 2010 | FoxNews.com

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.”

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Carbon Trade Ends a Quiet Death on Chicago Climate Exchange
By John O’Sullivan

Republican mid-term election joy deals financial uncertainty among green investors as the Chicago Climate Exchange announces the end of U.S. carbon trading. The Chicago Climate Exchange (CCX) announced on October 21, 2010 that it will cease carbon trading this year. However, Steve Milloy reporting on Pajamasmedia.com (November 6, 2010) finds this huge story strangely unreported by the mainstream media.

To some key analysts the collapse of the CCX appears to show that international carbon trading is “dying a quiet death.” Yet Milloy finds that such a major business failure has drawn no interest at all from the mainstream media. Milloy noted that a “Nexis search conducted a week after CCX’s announcement revealed no news articles published about its demise.”

The collapse of the trading market is a personal embarrassment to the current U.S. President.

Barack Obama was a board member of the Joyce Foundation that funded the fledgling CCX. Professor Richard Sandor, of Northwestern University had started the business with a $1.1 million in grants from the Chicago-based left-wing Joyce Foundation endorsed by Obama. Fortunately for Sandor he was able to net $98.5 million for his 16.5% stake in CCX when it was sold.Failure of European Climate Market May Follow

Business Collapse is Setback for Washington

Milloy pointedly draws attention to the fact that when founded in November 2000, CCX’s carbon trading market was predicted to grow from $500 billion to $10 trillion. Milloy writes, “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 and trading carbon was, “the only purpose for which it was founded.” But with the resurgence Republicans in the mid-terms a new cohort of global warming skeptics have been installed in the corridors of power.

Unlike the American voluntary scheme, the European cousin of the CCX, the European Climate Exchange (ECX), continues to trade due to the mandatory carbon caps of the Kyoto Protocol. But the ECX may also fail unless a new climate treaty to replace the Kyoto Protocol is introduced. That treaty expires in 2012. But the ineffectual Copenhagen Climate Conference (2009) exposed an inability among international politicians to agree on climate change. If this stalement persists then the European ECX may likely suffer the same fate as Chicago’s CCX.

More Job Losses in Green Trading Sector

Only by November 02, 2010 had the story had been picked up briefly by Chicagobusiness.com (Crain’s). Reporter, Paul Merrion adds that while CCX will cease trading of new emission allowances at the end of the year, “it will continue trading carbon offsets generated by projects that consume greenhouse gases, such as planting trees.”

Admitting that there will be “deep staff cuts,” Chief Financial Officer Scott Hill of Atlanta-based IntercontinentalExchange Inc. further conceded, “We had about 66 people when we bought the company [CCX]. I think we’ll be closer to 25 by the end of the year. And then we’ll reduce further into the first quarter.” ICE had bought Climate Exchange PLC, which operated CCX, the European Climate Exchange and the Chicago Climate Futures Exchange, in April 2010 for around $634.5 million.

U.S. Corporations and Investors in Retreat

Speaking to the New York Times ( March 2010) Kristel Dorion, a developer with 10 years of experience putting together offset projects under the United Nations’ Clean Development Mechanism (CDM), foresaw that investors were “quickly shifting focus elsewhere.”

Since its launch in 2003 the CCX succeeded in attracting major players such as Ford, Bank of America, IBM and Intel. By signing up as voluntary contributors these corporations made been making voluntary but legally binding commitment to meet greenhouse gas emission reduction targets either by cutting emissions or by buying emissions permits sold by other CCX members.

But Dorion warned, “The ones that are pulling out are all the American-based companies.”

Republican successes in America’s mid-term election are likely push the possibility of climate legislation even further off the political agenda. Nonetheless, California outlined its plans for it’s own cap-and-trade scheme with the ambition of a joint trading scheme by 2012 across members of the Western Climate Initiative, an alliance of 11 states and Canadian provinces. Read more at Suite101: Carbon Trade Ends on Quiet Death of Chicago Climate Exchange here.