Mission & Name
US Foreign Policy (Dr. El-Najjar's Articles)
Obama's Cap and Trade Carbon Emissions
A Stealth Scheme to License Pollution and Fraud
By Stephen Lendman
ccun.org, July 11, 2009
On May 15, HR 2454: American Clean Energy and Security Act of
2009 (ACESA) was introduced in the House purportedly "To create clean
energy jobs, achieve energy independence, reduce global warming pollution
and transition to a clean energy economy."
In fact, it's to let
corporate polluters reap huge windfall profits by charging consumers more
for energy and fuel as well as create a new bubble through carbon trading
derivatives speculation. It does nothing to address environmental issues,
yet on June 26 the House narrowly passed (229 - 212) and sent it to the
Senate to be debated and voted on. More on that below.
31, Energy and Commerce Committee Chairman Henry Waxman and Energy and
Environment Subcommittee Chairman Edward Markey released a "discussion
draft" of the proposed legislation and falsely claimed:
-- it's "a
comprehensive approach to America's energy policy that charts a new course
towards a clean energy economy;" it will
-- create millions of
clean energy jobs....that can't be shipped overseas;
America on the path to energy independence;
-- reduce our
dependence on foreign oil;
-- save money by the billions;
-- unleash energy investment by the trillions;
-- cut global
-- strengthen our economy;" and
"America the world leader in new clean energy and energy efficiency
Strong-arm pressure, threats and bribes got the
bill through the House. Forty-four Democrats opposed it. Eight Republicans
backed it. Over 1200 pages long, few if any lawmakers read it.
After passage, Chairman Markey said:
"It's been an incredible six
months to go from a point where no one believed we could pass this
legislation to a point now where we can begin to say that we are going to
send President Obama to Copenhagen in December as the leader of the world
on climate change."
Speaker Pelosi praised the bill as
"transformational legislation which takes us into the future" and added
that after passage she took congratulatory calls from Obama, Senate
Majority Leader Harry Reid and Al Gore. The former vice-president has
long-standing ties to Goldman Sachs (GS), and in 2004 he and David Blood,
CEO of GS's asset management division until 2003, co-founded Generation
Investment Management LLC, a firm likely to profit greatly from cap and
In a prepared June 25 statement ahead of the House
vote, Obama said:
"Right now, the House of Representatives is
moving toward a vote of historic proportions on a piece of legislation
that will open the door to a new, clean energy economy."
citing the same false claims as Waxman and Markey, he called the
legislation "balanced and sensible" and "urge(d) every member of Congress
- Democrats and Republicans - to come together and support" it.
Polluters love it. So does Wall Street and corporate-friendly
environmental groups like the Environmental Defense Fund. The opposition,
however, includes Greenpeace, Friends of the Earth and Public Citizen.
In a joint May 13 press release, they were "extremely troubled
(about) compromises to the already flawed American Clean Energy & Security
It contains enough loopholes to make its claimed
performance standards worthless, one of which prohibits the EPA from using
the Clean Air Act to regulate future greenhouse gas emissions. That alone
means they'll proliferate beyond what new technology reduces on its own,
and only then if it's profitable to do it.
On June 23, Friends of
the Earth president Brent Blackwelder said:
including Shell and Duke Energy helped write this bill, and the result is
that we're left with legislation that fails to come anywhere close to
solving the climate crisis. Worse, the bill eliminates preexisting EPA
authority to address global warming - that means it's actually a step
A June 25 Greenpeace press release stated:
it comes to the floor, the Waxman-Markey bill sets emission reduction
targets far lower than science demands, then undermines even those targets
with massive offsets. The giveaways and preferences in the bill will
actually spur a new generation of nuclear and coal-fired power plants to
the detriment of real energy solutions."
On June 27, Public
Citizen (PC) called the bill "a new legal right to pollute (that) gives
away 85 percent of (its) credits to polluters. (It) will not solve our
climate crisis but will enrich already powerful oil, coal and nuclear
power companies." PC wants polluters to cut their emissions 80% below 1990
levels by 2050 and pay for credits, not get them free. It also cited the
American Wind Energy Association saying that the renewable standard will
deliver "effectively zero" new ones.
PC wants consumers protected,
not charged a "carbon tax....The bill doesn't, but should, provide money
to help homeowners pay for such things as weatherization or to receive
rebates for rooftop solar." Its main "consumer protection provision
distributes free pollution allowances to electric and natural gas
utilities (on the assumption) that the 50 different state utility
commissions will redirect all that money back to consumers." In fact, HR
2454 is a thinly-veiled scheme to let companies profit from polluted air,
in part financed by a consumer "carbon tax."
Big Coal gets a
waiver until 2025. Agribusiness is exempt altogether even though it's
responsible for up to one-fourth of greenhouse gas emissions. The nuclear
industry will benefit hugely from the free allowances provision. A leaked
memo had Exelon, the nation's largest nuclear power company, bragging that
it will reap a $1 - $1.5 billion annual windfall.
trading is a scam, first promoted in the 1980s under Reagan. Clinton made
it a key provision of the 1997 Kyoto Protocol. He signed it in 1998, but
it was never ratified. As of February 2009, 183 nations did both, but
independent scientists call it "miserable failure" needing to be scrapped
and replaced by a meaningful alternative.
ACESA is about profits,
not environmental remediation. Its emissions reduction targets are so
weak, they effectively license pollution by creating a new profit center
to do it.
The Next Bubble
Wall Street also will reap a
huge bonanza through carbon trading derivatives speculation exploiting
what Commodity Futures Trading commissioner Bart Chilton believes will be
a $2 trillion market - "the biggest of any (commodities) derivatives
product in the next five years." Others see a future annual market
potential of up to $10 trillion based on these schemes:
government-issued cap and trading carbon allowance permits to let
polluters emit a designated amount of greenhouse gases; those exceeding
the limit can buy rights for more from companies below their limit;
-- carbon offsets that let companies emit excess greenhouse gases provided
they invest in projects purportedly cutting them elsewhere, either
domestically or abroad; they can also fulfill their obligation by
stretching out investments for up to 40 years - far enough ahead to avoid
them altogether; and
-- besides trading allowances and offsets,
polluters and Wall Street can play the derivatives game, including
with futures contracts for a designated number of allowances at an agreed
on price for a specified date.
According to Robert Shapiro, former
Undersecretary of Commerce in the Clinton administration: "We are on the
verge of creating a new trillion dollar market (through) financial assets
that will be securitized, derivatized, and speculated by Wall Street like
the mortgage-backed securities market" and all others that inflated
bubbles that burst. If cap and trade becomes law, this market will explode
so Wall Street is pressuring senators to pass it.
According to the
Center of Public Integrity (CPI), around "880 total businesses and
groups....reported they were seeking to influence climate change policy"
as addressed in HR 2454. Representing 770 of them are "an estimated 2340
lobbyists," a 300% increase in the past five years, or more than "four
climate lobbyists for every member of Congress."
In 2003, Wall
Street employed none on climate issues. CPI says it now has 130
representing the usual players like Goldman Sachs, JP Morgan Chase,
Citigroup and others, and why so is simple - to create a huge new revenue
stream to make up for ones lost with perhaps others in the wings, thus far
not revealed. Waxman - Markey delivered splendidly, setting the stage for
another bubble if HR 2454 becomes law with huge pressure now on senators
to assure it.
Warning: Cap and Trade Bubble Ahead
1, Catherine Austin Fitts' Solari.com blog headlined "The Next Really
Scary Bubble" in stating:
"If you think the housing and credit
bubble diminished your financial security and your community, or the
bailouts, or the rising gas prices did as well, hold on to your hat" for
what's coming. "Carbon trading is gearing up to make the housing and
derivative bubbles look like target practice."
She quoted Rep.
Geoff Davis calling it "a scam," Rep. Devin Nunes saying it's a "massive
transfer of wealth" from the public to polluters and Wall Street, Rep.
James Sensenbrenner stating "Carbon markets can and will be manipulated
using the same Wall Street sleights of hand that brought us the financial
crisis," and Dennis Kuchinich citing "The best description to date (to) be
found in Matt Taibbi's....'The Great American Bubble Machine: From tech
stocks to high gas prices, Goldman Sachs (GS) has engineered every major
market manipulation since the Great Depression - and they are about to do
it again.' "
Taibbi calls GS the "world's most powerful investment
bank....a great vampire squid wrapped around the face of humanity,
relentlessly jamming its blood funnel into anything that smells like
money." It operates by positioning itself "in the middle of (every)
speculative bubble, selling investments they know are crap."
control Washington and profit by extracting "vast sums from the middle and
lower floors of society with the aid of a crippled and corrupt state that
(lets it) rewrite the rules in exchange for the relative pennies
(it)throws (back as) political patronage."
When inflated bubbles
burst "leaving millions of ordinary (people) broke and starving, they
begin the entire process over again (inflating new bubbles and) lending us
back our own money at interest...." They've been at this since the 1920s
and are "preparing to do it again (with) what may be the biggest and most
audacious bubble yet" - a new cap and trade derivatives scam written into
HR 2454 with GS positioned to profit most from it. Taibbi calls its market
edge a position of "supreme privilege (and) explicit advantage" ahead of
all others on the Street.
Contributing $4,452,585 to Democrats in
2008 (around $1 million to Obama) was mere pocket change for what it can
reap from scams like cap and trade disguised as an environmental plan. The
scheme was devised. GS helped write it. The House passed it and sent it to
the Senate. Unless stopped, it will transfer more of our wealth to
corporate polluters and Wall Street on top of all they've stolen so far
from derivatives fraud and the imploded housing and other bubbles. And
Goldman will lead the way finding new ways to do it until there's nothing
left to extract.
Stephen Lendman is a Research
Associate of the Centre for Research on Globalization. He lives in Chicago
and can be reached at
Also visit his blog site at
sjlendman.blogspot.com and listen to The Global Research News Hour on
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