Monday, June 22, 2009

One more piece to the puzzle: CCX & Obama

Economist Richard L. Sandor founded the Chicago Climate Exchange six years ago with $1.1 million of seed money from the city’s Joyce Foundation. At that time, the foundation’s board included a state senator named Barack Obama. Today, Sandor is working with Henry Waxman whose bill for a cap and trade system is the cornerstone of Obama’s environmental agenda.
Waxman, chairman of the House Energy and Commerce Committee, agreed to give free pollution permits to utilities and allow manufacturers and refiners to meet CO2 targets by buying offset credits of the type sold by the CCX.
The government would allow as many as 2 billion offset credits to circulate, beginning in 2012. Half of those could be generated domestically and the other half from projects in other countries. The number of offsets and permits will decline over time.
The CCX model is now seen as a precursor to the government-mandated market Congress plans to create, according to Ecosystem Marketplace. President Obama has proposed auctioning pollution permits to raise at least $646 billion from 2012 to 2019. Sandor opposed that provision, saying that paying for the permits would wipe out utilities’ profits. “You bankrupt the industry,” he said.
“What this really does is buy a little bit of time to smooth out the rate impacts in the early years,” said John Stowell, vice president of environmental policy for Duke Energy, the Charlotte, N.C.-based owner of utilities in the Southeast and Midwest. “We need a bridge to get us to the new technology.”

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