How Goldman Sachs invented cap and trade
Source: Quid Sapio
June 6, 2012 by QUIDSAPIO Leave a comment
From “The Great American Bubble Machine”, Rolling Stone Magazine July 9-23 2009:
By MATT TAIBBI
…Fast-forward to today. it’s early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs – its employees paid some $981,000 to his campaign – sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.Gone are HankPaulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm’s co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade.
The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.
Here’s how it works: If the bill passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions: President Obama conservatively estimates that about $646 billion worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.
The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of all’ electricity suppliers in the U.S. total $320 billion.
Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they’re the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief ofstaff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climate-change problem.” A few years later, the bank’s carbon chief, Ken Newcombe, insisted that cap-and-trade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.”
The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Hanis. Their business? Investing in carbon offsets, There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?
“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.
Well, you might say, who cares? If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Maybe – but cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues. Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and-trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax-collection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it’s even collected.
“If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedgefund director who’ spoke out against oil-futures speculation. “But we’re saying that Wall Street can set the tax, and Wall Street can collect the tax. That’s the last thing in the world I want, It’s just asinine.”
Cap-and-trade is going to happen. Or, if it doesn’t, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees – while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.
It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things tbat are no longer there.
But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.
Source: Fort Fairfield Journal
The Carbon Credit Trading Ponzi Scheme
By David Deschesne
Editor/Publisher, Fort Fairfield Journal June 22, 2016
There’s big money in fear mongering and even surer profits if you can convince governmental powers to go along with it. One of the greatest hoaxes ever perpetrated by man on his fellow man has been the myth of man-made “climate change.” I’ll write more in a future editorial on how the globalists who seek to control the world through fear have refined their climate mantra from fear mongering a “global cooling” meme to a “global warming” meme, all the way through to today’s “climate change” ideology in order to confiscate the wealth of industrialized nations and transfer it via a Communist control mechanism to the undeveloped, non-industrialized nations of the world.
At this point in time, I would like to explain the Carbon Credit trading system and how it is essentially a ponzi scheme designed to make non-governmental organizations filthy rich while putting forth the narrative that their system somehow reduces the amount of Carbon Dioxide in the atmosphere.
As an aside, I just want to remind everyone with two brain cells to rub together that the deadly gas the mainstream media and the likes of Al Gore have been trying to convince us all will be the ultimate demise of humanity, is a gas that is consumed by the tons worldwide on a daily basis by all green plants. Carbon Dioxide—a/k/a/ CO2 is a food source for green plants and trees and when they “eat” it, they turn it back into oxygen that is released back into the atmosphere. The more CO2 there is in the air, the faster green plants grow and consume it.
So, why is Al Gore so intent on pushing a Carbon Credit scheme? Could there be some profit potential in there for him? As you will see in the following diagrams, Carbon Credit trading does absolutely nothing to actually reduce the overall net CO2 in the air.
Here’s how the scheme works. Let’s say you have a manufacturing facility that produces 50 tons of CO2 per year. We’ll call that one “Factory A.”
Now let’s look at another manufacturing facility that also produces 50 tons of CO2 per year. We’ll call that one “Factory B.”
Using simple math—which seems to be a challenge to many people today—we can see that the total annual CO2 output of both manufacturing facilities is 100 tons per year. These facilities do not need to be in the same area, they can be in different parts of the world.
Now, let’s suppose Factory A, which has been producing 50 tons of CO2 annually for years, has either scaled back its operations or upgraded its manufacturing process to streamline the amount of CO2 it emits. Let’s say these changes amount to an annual reduction of 25 tons per year, or half of their original output.
Factory A now can have an accredited CO2 surveying company certify that they had been emitting 50 tons of the deadly gas before, but are now emitting only 25 tons. That surveying company will then issue them a certificate for 25 tons of CO2 that they can then sell on the world market to another factory who wants to increase their CO2 pollution output.
Now comes Factory B. They, too have been producing 50 tons per year but demand for their product has increased and they have found the need to increase production. This increase in production will cause them to emit more CO2 than they did formerly. Since the addition of pollution control equipment would be cost prohibitive compared to purchasing somebody else’s carbon reduction certificate, they go to the Carbon Credit Trading Exchange and purchase Factory A’s certificate for 25 tons of CO2. This allows Factory B to increase their output of CO2 by 25 tons annually with no legal issues accruing against them.
Using the same simple math, we see that Factory A, with 25 tons of CO2 output per year and Factory B, with 75 tons of CO2 output per year still add up to 100 tons per year. Nothing has changed. All that has happened is the amount of CO2 emitted has been divided up differently between two factories.
This also applies to electricity usage if the electricity comes from coal burning plants. If a school or business cuts back on electricity usage and “reduces their carbon footprint” they can get that certified, then sell that certificate on the open market to another company or business to increase their own emissions.
But that’s not the really interesting part of the cap and trade ponzi scheme. You see, in order for this scheme to function you need a veritable army of carbon credit surveyors to do the bureaucratic work of assessing and issuing certificates for the amount of CO2 that has been reduced. You will also need a carbon credit exchange—sort of like a New York Stock Exchange for carbon certificates—for people to actually buy and sell them. There is currently an exchange set up in the U.S. called the Chicago Climate Exchange.
According to a report on www.humanevents.com, “CCX has about 80 members that are self-confessed emitters of greenhouse gases. They have voluntarily committed themselves to reduce their emissions by the year 2010 to a level 6% below their emissions in 2000. CCX members include Ford Motor Company, Amtrak, DuPont, Dow Corning, American Electric Power, International Paper, Motorola, Waste Management and a smattering of other companies, along with the states of Illinois and New Mexico, seven cities and a number of universities. Presumably the members ‘purchase’ carbon offsets on the CCX trading exchange. This means they make contributions to or investments in groups or firms that provide forms of ‘alternative,’ ‘renewable’ and ‘clean’ energy. CCX also has ‘participant members’ that develop the carbon-offset projects. They have names like Carbon Farmers and Eco-Nomics Incorporated. Still, other participant member groups facilitate, finance and market carbon-offset projects to ‘sequester, destroy or displace’ greenhouse gases. CCX aspires to be the New York Stock Exchange of carbon-emissions trading.”
The Carbon Neutral Company operates as a carbon exchange across the pond, in England. Al Gore is heavily invested in carbon credit exchanges that buy and sell these carbon certificates, which is why he’s so interested in peddling the “climate change” mantra. Oops, I guess that’s an ‘inconvenient truth’ for Mr. Gore!
Please go to Fort Fairfield Journal to read the entire article.
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