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Obama Years Ago Helped Fund Carbon Program He Is Now Pushing Through Congress

Discussion in 'Political Zone' started by JBond, Mar 25, 2009.

  1. JBond

    JBond Well-Known Member

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    Obama Years Ago Helped Fund Carbon Program He Is Now Pushing Through Congress

    http://www.foxnews.com/politics/first100days/2009/03/25/obama-helped-fund-carbon-scheme/

    In 2000 and 2001, while Barack Obama served as a board member for a Chicago-based charitable foundation, he helped to fund a pioneering carbon trading exchange that is likely to fill a critical role in the controversial cap-and-trade carbon reduction scheme that President Obama is now trying to push rapidly through Congress.

    During those two years, the Joyce Foundation gave nearly $1.1 million in two separate grants that were instrumental in developing and launching the privately-owned Chicago Climate Exchange, which now calls itself "North America's only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide."

    One of those gases is carbon dioxide, the most ubiquitous greenhouse gas and the focus of the most far-reaching -- and contentious -- efforts to combat "climate change." On Monday, Obama's Environmental Protection Agency declared carbon dioxide a public health threat.

    The President of the Joyce Foundation in 2000, when the foundation made its first grant to the Climate Exchange, was Paula DiPerna, who is now executive vice president of the Chicago Climate Exchange in charge of corporate recruitment and public policy, as well as president of CCX International.

    DiPerna left the foundation in November 2001 and joined the Exchange. It was the same year in which the foundation gave its second and much larger grant to the exchange. The Exchange finally launched in 2003.

    Reached at her office in New York, DiPerna said President Obama, who in 2000 was a candidate for Congress, was involved as a director of the foundation and voted on the proposal but declined to detail that involvement other than that "he read the proposal and voted on the grant."

    She referred subsequent questions to the exchange's communications office.

    In response to questions from FOX News about Obama's relationship to the project a White House spokesman said "the President has long believed that a market-based cap-and-trade system is the best way to reduce harmful greenhouse gas emissions and to promote our energy security. The success of the cap-and-trade approach in reducing acid rain demonstrates that providing incentives for companies to reduce their emissions is effective."

    Obama's espousal of cap-and-trade, a system that is intended, among other things, to increase the price of fossil fuels and force their replacement by energy sources that produce less greenhouse gases, has drawn fire from many economists as a huge energy tax that will weigh heavily on an economy that is already in steep recession. The price tag has been put high as $2 trillion dollars over eight years. That figure, nearly three times higher than originally projected, was given in a White House briefing to Senate staffers last week and reported by US News and World Report and the Washington Times.

    The scheme has also drawn attacks from 28 U.S. Senators, including West Virginia's Robert Byrd and Michigan's Carl Levin, both Democrats, who have criticized Obama for floating the idea that he would attach the measure to the current budget reconciliation process, to avoid a filibuster in Congress.

    An open letter signed by the dissident senators declared that "enactment of a cap-and-trade regime is likely to influence nearly every feature of the U.S. economy. Legislation so far-reaching should be fully vetted and given appropriate time for debate, something the budget reconciliation process does not allow."

    Obama served as one of 12 directors on the Joyce Foundation board from July 1994 until December 2002, according to a Joyce foundation spokesman. But it was only in 2000 and 2001 that the foundation gave money to the Climate Exchange -- funds deemed by the exchange itself to be fundamental to its successful launch, and in fact to its early survival.

    In 2000, according to Joyce Foundations records, it allocated $347,600 to the J.L. Kellogg School of Management at Northwestern University "to design a mid-western pilot program for the voluntary trading of carbon dioxide and other emissions that cause climate change, with the goal of answering methodological questions and resolving operational issues."

    Click here to see the 2000 Joyce Foundation Annual Report.

    According to the President's Letter she signed in that year's annual report, DiPerna declared that "One of our first Millennium grants supports the design of a pilot phase for a carbon dioxide emissions trading market, called the Chicago Climate Exchange. Long discussed, the ability of the marketplace to create incentives for reducing carbon dioxide emissions has not been tested."

    The money went to Environmental Financial Products, LLC, a firm owned by Richard Sandor, a visiting professor at Northwestern who was formerly head of the Chicago Mercantile Exchange, and today is known as one of the founding geniuses of commodity trading derivative markets. Sandor had already gained a reputation for designing successful cap-and-trade markets for controlling emissions of sulfur dioxide, a gas that produces acid raid.

    Efforts to reach Sandor, who was traveling, were unsuccessful and a list of questions for him submitted to the exchange were not answered.

    The initial idea, according to accounts from the time, was to have a carbon-trading system ready to implement when the Kyoto Protocol was being signed in 2000, on the assumption that the U.S. would join the pact. President Clinton signed the document, even though the U.S. Senate had voted 95-0 to show its rejection of the treaty.

    President Bush withdrew from the accord, and as Sandor told the Web site climatebiz.com at the time, when that happened, "Our efforts seemed dead."

    But the Joyce Foundation came to the rescue. In 2001, it gave Sandor a second grant of $760,100 to "launch" the trading system with only a few founding partners, including the City of Chicago, Ford Motor Company, DuPont and a handful of other firms.

    Joyce Foundation president Ellen Alberdling said it was not unusual for the foundation to keep funding projects that ran into trouble. "We are in involved in making policy decisions, not creating successful businesses. We have done it with many other projects as well." she said.

    Click here to see the 2001 Joyce Foundation Annual Report.

    Within a year Sandor had used the Joyce funding to raise additional money through a public stock offering, and established the Chicago Climate Exchange as the likely commercial heart of any future U.S. cap-and-trade system.

    Since then, the exchange has expanded around the world, and itself become the subsidiary of a London-based firm, Climate Exchange PLC, which is also headed by Sandor.

    The Joyce Foundation was founded in 1948, based on the fortune of a Chicago timber heiress, and focuses on community and public policy issues. In 2006, the most recent year when financial statements are publicly reported, it had nearly $1 billion in assets.

    According to its annual reports, it funds efforts on environmental, educational and anti-poverty issues, as well as providing support for arts and culture in the Great Lakes area. The foundation received widespread notice for its $12 million funding effort since 2003 to keep hand guns off the streets of Chicago and other cities.

    The exchange, meantime, has proved very lucrative for Sandor and others who got in on the early stages. The value of Sandor's 8 million shares in the exchange has grown to more than $260 million, even before a national cap-and-trade system has been imposed. The share value could climb even more when and if the government makes the market mandatory.

    In addition, the 66-year-old economist has parlayed the Chicago efforts into a truly global empire. Currently he is in talks with India to set up a climate exchange and has opened voluntary exchanges in China, Canada and Europe.

    This month the Wall Street Journal said Sandor is "one of the most successful investors trying to profit from rising environmental awareness."

    Cap-and-trade has been endorsed by many other politicians than Barack Obama, including his presidential rival, John McCain. But the notion remains contentious.

    Many economists and environmentalists have argued that a straightforward carbon tax on polluters would be more efficient, less prone to manipulation and more transparent.

    The House Ways and Means Committee has recently allowed several experts to testify about other ideas than cap-and-trade. But even they concede it was more a matter putting other ideas on the record than challenging the administration.

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