Carbon Tracing - Bridging the gap between Carbon and Finance. New Climate Bill Could Create "Super. By Teryn NorrisOriginally published by AlterNet July 8, 2009 The recent passage of the American Clean Energy & Security Act (ACES) through the U.S. House of Representatives drew different reactions from climate and environmental advocates. But one key perspective shared by most advocates is that, despite its weaknesses, the bill is a good first step.
ACES builds a solid foundation for future progress on U.S. climate mitigation, the argument goes, and climate advocates will be well-positioned to strengthen the legislation in years ahead. But what are the prospects for strengthening ACES in future years? This question is subject to many uncertainties, depending on the vagaries of the political climate. But a closer examination reveals that ACES could create a "super-lobby" of interest groups that will significantly diminish the possibility of achieving future reforms. The newest climate lobby -- and potentially one of the most powerful in years to come -- is the financial industry. Climate Bill Analysis Part 19: ACES. This analysis was also covered in an op-ed at AlterNet. Breakthrough Institute's full collection of ACES analyses is here. New analysis by the Breakthrough Institute concludes that the American Clean Energy & Security Act (ACES) could create a vast new carbon derivatives market subject to financial speculation and create a powerful alignment of economic incentives among the financial industry, carbon offset producers, and utilities and fossil fuel companies to weaken or oppose measures to reduce emissions in capped U.S. sectors.
Offset Industry & Utilities The ACES bill would create new demand for domestic and international carbon offsets by allowing polluters to purchase these relatively cheap offsets in lieu of reducing their emissions. The bill allows for the purchase of 1 billion tons of domestic offsets and 1 billion tons of international offsets each year. The use of offsets to meet emissions reduction targets has significant implications when evaluating the impacts of ACES. InfoViewer: Carbon trading set to dominate commodities.
Sen. Barbara Boxer: Clean Energy Action Will Jump Start Our Econ. Sarah Palin's "cap and tax" opinion piece printed in the Washington Post this week reminds me of every naysayer who has spoken out against progress in cleaning up pollution. Whether it was the debate over the Clean Air Act, the Clean Water Act, the Superfund law or any of our other landmark environmental laws, one pattern has always been clear: Time and time again, pessimists -- often affiliated with polluting industries -- predicted loss of jobs and great costs to taxpayers. And time and time again, our environmental laws have cleaned up the water we drink, the air we breathe, and the communities we live in at far lower cost than expected.
Take the acid rain program established in the Clean Air Act Amendments of 1990. The naysayers said it would cost consumers billions in higher electricity rates, when in reality the opposite happened, and electricity rates declined an average of 19 percent between 1990 and 2006. Another charge was that it would cost the economy millions of jobs. SEC Turnaround Sparks Sudden Look at Climate Disclosure - NYTime. Could Cap and Trade Cause Another Market Meltdown? | Mother Jone. You've heard of credit default swaps and subprime mortgages. Are carbon default swaps and subprime offsets next? If the Waxman-Markey climate bill is signed into law, it will generate, almost as an afterthought, a new market for carbon derivatives. That market will be vast, complicated, and dauntingly difficult to monitor. And if Washington doesn't get the rules right, it will be vulnerable to speculation and manipulation by the very same players who brought us the financial meltdown.
Cap and trade would create what Commodity Futures Trading commissioner Bart Chilton anticipates as a $2 trillion market, "the biggest of any [commodities] derivatives product in the next five years. " In addition to trading the allowances and offsets themselves, participants in carbon markets can also deal in their derivatives—such as futures contracts to deliver a certain number of allowances at an agreed price and time. On this front, however, Wall Street was less successful. Subprime Carbon? | Friends of the Earth.