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A market for pollution? - Pact to trade greenhouse-gas credits
The Washington Times - Tuesday, June 19, 2001
Author: Carter Dougherty, THE WASHINGTON TIMES
Twenty-five companies and nonprofit groups have agreed to join a groundbreaking program that will fashion a system for trading credits in greenhouse gases, the chief culprits in global warming.
The Chicago Climate Exchange - based in the city known for trading commodities such as wheat, corn and cattle - hope the project will become a model for the nation as the Bush administration grapples with solutions to the worldwide problem.
The voluntary plan “would represent a major step forward while an appropriate regulatory framework for greenhouse gases evolves,” said Paula DiPerna, president of the Joyce Foundation, which is financing the study.
Richard Sandor, a prominent Chicago businessman and academic who will lead the program, says there is a market for the products, even though the Bush administration has signalled a go-slow approach on global warming by refusing to sign the 1997 global-warming treaty negotiated in Kyoto, Japan.
“We’re looking at this like we would any other financial product,” Mr. Sandor said. “We’re agnostic about the overall issue of global warming.”
Mr. Sandor is also chief executive officer of Environmental Financial Products, a Chicago company that has developed other financial services in the environmental arena.
Citing Senate opposition and its own skepticism about the 1997 Kyoto treaty, the Bush administration announced earlier this year that the United States would not sign the pact and reneged on a campaign promise to regulate carbon dioxide, the gas scientists say is mainly responsible for global warming.
The administration is developing other options for combatting the problem, which Mr. Bush shared with European allies last week.
Advocates of the trading system for carbon dioxide believe the plan is the most market-oriented way to fight global warming. It would be modeled largely on a system started in 1990 to reduce emissions of sulfur dioxide and nitrogen, which cause acid rain.
The system - voluntary, at least for starters - would allocate credits to companies for a given amount of greenhouse-gas emissions. Businesses that develop new environmentally friendly technologies for reducing their output of carbon dioxide could then monetize their innovations by selling their credits to other companies.
The Chicago Climate Exchange plans a 12-month feasibility study. If it can get a consensus among the 25 participating organizations, companies then would voluntarily adopt caps on greenhouse-gas emissions and begin trading.
Participating companies include Dupont, International Paper, Ford Motor Co. and PG&E National Energy Group, a Bethesda company that operates electricity generators and pipeline facilities.
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Daring to go where the U.S. government hasn’t, a group of industrial giants announced Thursday they will voluntarily reduce and trade greenhouse gas emissions, which are currently unregulated but linked to global warming.
The Chicago Climate Exchange , the first attempt in the U.S. to reduce greenhouse gases with a market-based solution, will allow participants to swap the right to pollute in a four-year pilot project.
The electronic trading scheme involves a baseline pollution limit—a certain number of tons of six greenhouse gases that each company can put into the air—and allows members that cut emissions below the baseline to sell credits to firms that can’t meet the mark.
The central idea behind the system, known as a cap and trade program, is not new. It is used worldwide and was employed by the Environmental Protection Agency beginning in 1990 to control sulfur dioxide levels. What makes the Chicago Climate Exchange unusual is that participation is strictly voluntary, and there is currently no government involvement.
The big industrial corporations include DuPont, Ford Motor Co., Motorola and American Electric Power—the largest power supplier and the largest emitter of carbon dioxide in the nation. They were joined by the City of Chicago and other companies, including Waste Management Inc. and Baxter International Inc.
Many joined for the chance to experiment with cost-effective ways of reducing emissions before they are forced to do so by future laws. Some overseas markets, including Europe, are developing a cap and trade system for greenhouse gases, as permitted by the Kyoto Protocol, to thwart climate change. Britain and Denmark are already trading on a small scale.
For some companies, who might be able to cut emissions and resell their credits at a higher price, the incentive is profit. Others said they want to show their shareholders, customers and investors that they are concerned about environmental issues.
“There’s a growing passion that markets lend themselves to solving social and environmental problems,” said Chicago Climate Exchange CEO Richard Sandor, a former economist with the Chicago Board of Trade, called by some the “father of financial futures.” “We all believe energy efficiency is good business. We’re trying to build and inform the debate to give companies a vehicle to test cut and trade.”
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In a Senate hearing last week, Republican John McCain and Democrat Joe Lieberman called for a cap and trade system through a government-provided Greenhouse Gas Database, which would contain an inventory of emissions and a registry of reductions.
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Exchange in pollution - credits formed
Chicago Sun-Times - Friday, January 17, 2003
Working to align market forces with social good, 13 major corporations and the city of Chicago agreed Thursday to support a new financial exchange dedicated to creating a market in pollution credits.
The Chicago Climate Exchange is a merger of environmentalism and free-market thinking. It would organize itself like the brazenly capitalist Chicago Board of Trade or the Chicago Mercantile Exchange, but with a long-term aim of helping companies curb emissions of greenhouse gases in a cost-effective way.
Companies that beat emissions standards could sell credits, recouping some costs to come into compliance with various governmental emission standards. Companies not meeting the standards must buy the credits, giving them an incentive to improve. Supply and demand would set the price.
The idea has been criticized as a way to give polluters a pass. But Richard Sandor, the exchange’s chairman and chief apostle, said it serves the planet by giving companies an incentive to reduce noxious emissions.
Sandor said his work on the concept over a dozen years stems from a “passion that markets can lend themselves to solving social and environmental problems.” It would expand a government-approved market for credits in sulphur dioxide emissions that Sandor said has become a $5 billion annual market and slashed emission levels. Sulphur dioxide is a culprit in acid rain.
The 14 original participants have agreed to a binding standard of reducing their greenhouse gas emissions 4 percent by 2006, 1 percent a year. Credits in six greenhouse gases will be traded, with most of the interest expected to be in carbon dioxide trading.
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Also, data from the marketplace will help government officials determine what are reasonable standards for pollution levels, Zimmerman said.
The exchange is due to open in late spring. Trading will take place on a computer network and there will be no trading floor.
One reason it’s in Chicago is because the city is the home of no-nonsense markets in financial and agricultural futures and options, so there’s a base of people familiar with the concept of trading credits. Sandor said speculators will have access to the market and that the exchange will announce its software specifications shortly.
The city of Chicago signed on for more than moral support. City government itself will buy and sell the credits, a step that Mayor Daley’s top environmental officer said is justified because of its role as a waste generator and leading power consumer.
N. Marcia Jimenez, commissioner of the Department of Environment, said the exchange “has the potential to revolutionize how business is done” by making companies more aware of environmental responsibilities. She said the city draws 10 percent of its own energy from renewable resources and wants to double that share by 2006.
The voluntary nature of the exchange also was appealing, she said. “We have found voluntary commitment to do the right thing is what will last,” Jimenez said.
Trading will cover pollution credits that are valid in the United States, Canada and Mexico. Sandor said a limited trading link will be established with Brazil to provide a broader test of an international market.
Trading in pollution
Founding members of the Chicago Climate Exchange , a marketplace that tries to generate financial incentives for curbing greenhouse gas emissions:
American Electric Power
Baxter International Inc.
City of Chicago
DuPont
Equity Office Properties Trust
Ford Motor Co.
International Paper
Manitoba Hydro
MeadWestvaco Corp.
Motorola Inc..
STMicroelectronics
Stora Enso
Temple-Inland Inc.
Waste Management Inc.
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Ping to thread.
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Why Blood and Gore love cap-and-trade
Star-Ledger, The (Newark, NJ) - Sunday, July 5, 2009
Author: PAUL MULSHINE, STAR-LEDGER STAFF
If my e-mail is any indication, every conservative in New Jersey is angry with the three Republican congressmen from our state whose votes last week helped provide the winning margin for that cap-and-trade bill.
With good reason. It’s an awful bill. And I’ll give you two reasons: Blood and Gore.
No, I’m not talking about a horror movie, but there is a link to the cinema. Around the time Al Gore was putting together that movie about the horrors of global warming titled “An Inconvenient Truth,” he was also putting together a firm with a former Goldman - Sachs executive named David Blood . The firm, Generation Investment Management, recently bought a share of a company called Camco International Ltd., which trades in carbon credits.
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http://www.freerepublic.com/focus/f-news/2026191/posts
Al Gore-backed investment firm buys 9.5 pct Camco Intl stake (carbon credits)
AFX ^ | June 4, 2008
Posted on Wednesday, June 04, 2008 7:51:32 PM by Shermy
LONDON (Thomson Financial) - Generation Investment Management, the private equity fund chaired by former U.S. vice president Al Gore, has acquired a 9.5 percent stake in Camco International Ltd, a carbon asset developer.
Generation, set up in 2004 by Gore and David Blood, former chief of Goldman Sachs’s asset management arm, now holds 16 million Camco shares, Camco said in a statement.
Camco, which has one of the world’s largest carbon credit portfolios, works with companies to identify and develop projects that reduce greenhouse gas emissions and then arranges the sale and delivery of carbon credits.
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KEYWORDS: algore; camco; ecoprofiteers; environment; enviroprofiteers; envirowhackos; goreenron; Click to Add Keyword
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Solutions to climate change
Camco is a leading carbon asset developer with one of the world’s largest carbon credit portfolios. We generate carbon credits by partnering with companies to identify, develop and manage projects that reduce greenhouse gas emissions. Camco then arranges the sale and delivery of carbon credits to international compliance buyers and into the voluntary market.
Camco is a market leader in China and Russia [!!!] - two of the largest potential markets for carbon credits - as well as in Eastern Europe and Africa. We are also developing projects and managing carbon emissions in North America, a significant market not currently covered by the Kyoto Protocol flexible mechanisms.
Our innovation, breadth of experience and diversity of expertise have resulted in a number of milestone projects and industry awards. Camco was voted Best Project Developer in a 2007 survey of carbon industry participants undertaken by Point Carbon. The Yangquan Coal Mine Methane (CMM) project, the world’s largest CMM project, was voted Carbon Transaction of the Year by Environmental Finance magazine.
How we deliver carbon credits
Origination Camco identifies and co-develops industrial projects that have the potential to reduce emissions. We are able to assist in raising finance, both through carbon asset financing, and innovative debt / equity structures.
Qualification Once financing is secured, Camco manages the project through the regulatory process. Camco has the expertise to develop new methodologies if required, and has successfully verified both compliance and voluntary market projects.
Structuring Camco is highly experienced in working with the project owner to advise on and develop the best possible structure for the deal. We have helped to structure some of the largest CDM projects developed to date.
Placement It is important to secure the best possible prices for our clients. We are uniquely positioned in the international carbon market to work on behalf of project owners, and have offices close to buyers in London, Europe and North America, and with strong links into Japan.
Asset management It is essential that projects achieve successful verifications and carbon credit issuance. Our experienced in-house technical team work closely with clients to ensure assets are delivered in a timely manner.
http://www.camco-international.com/camco_whatwedo.php
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Camco May Accelerate Carbon-Credit Production in 2010, CEO Says
March 25, 2010,
By Ben Sills
March 25 (Bloomberg) — Camco International Ltd., the U.K. investor whose biggest shareholder is headed by Al Gore, expects its carbon-offset projects to generate at least 18 percent more credits this year.
That was Camco’s growth rate in 2009, when it earned United Nations-certified credits for 3.3 million metric tons of avoided carbon emissions, compared with 2.8 million tons in 2008.
“We’d expect a similar increase, if not higher for this year,” Chief Executive Officer Scott McGregor said yesterday in a telephone interview.
The UN panel that grants the securities, called Certified Emission Reduction credits, is aiming to assess projects more quickly after issuance fell for the first time last year and prompted complaints from investors.
Shafqat Kakakhel, a member of the executive board of the UN’s Clean Development Mechanism, this month forecast credit issuance will rise by about a fifth to about 150 million tons.
Camco has 50 projects waiting for approval from the UN with the potential to generate credits that represent as much as 30 million tons of avoided emissions through 2012, UN data on Bloomberg show.
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Gore, the climate campaigner and former U.S. vice president, is chairman of Generation Investment Management LLP, Camco’s biggest shareholder with a 20 percent stake, according to Camco’s Web site.