The Chicago Climate Exchange, which started in 2003 amid great fanfare, announced in November it would cease trading carbon credits at the end of 2010. The CCX was North America’s only voluntary, legally binding trading system for carbon dioxide emissions.
Cap and Trade Is Dead
Upon the sudden closing of the Chicago Climate Exchange (CCX), some analysts and environmentalists pronounced the death of cap and trade policy, at least for the foreseeable future.
“What does this mean for the future of cap-and-trade? For the next two years, it’s dead,” said William Yeatman, assistant director of the Center for Energy and Environment at the Competitive Enterprise Institute. “Even global warming alarmists like senators John Kerry (D-MA) and Harry Reid (D-NV) concede that the policy has no future in the next Congress.”
Agreeing with Yeatman’s assessment was Fred Krupp, president of the Environmental Defense Fund. He told Fox News, “economy-wide cap and trade die[d] of what amounts to natural causes in Washington.”
Anticipated Laws Never Passed
The Chicago Climate Exchange was created by global warming activists in anticipation the United States might join other countries in restricting greenhouse gas emissions under a cap-and-trade system. The system, as envisioned, would require utilities and businesses to abide by target emission levels that would drop by a certain percentage each year. Enterprises that did not exceed the target emission level could sell these overages on the exchange to ones that surpassed their allotted levels.
The idea drew plenty of investors among those either advocating or fearing the federal government would impose cap-and-trade policy restrictions that would drive business to the exchange. But voters rebelled, and the bills stalled. By early November 2010, even investors such as former vice-president Al Gore sold their interest.
“That’s why CCX folded,” Yeatman said. “There was no hope for the legislation on which its business strategy was based.”
Back-Door EPA Threat
While cap-and-trade legislation appears dead, Yeatman warned carbon dioxide restrictions are still on the table.
“Thus stymied by voters, the environmentalist base of the Democrat Party is lobbying the Obama administration to impose energy rationing on the American economy by seizing regulatory power under the Clean Air Act,” said Yeatman.
Voluntary Participation Praised
Todd Myers, director of the Center for the Environment at the Washington Policy Center, says CCX wasn’t all bad.
“It is too bad they’re going away,” said Myers. “The best thing about carbon dioxide offsets is they encourage technological creation. The exchange said [to participants] that any way you come up with to reduce carbon dioxide, we’ll honor. And that’s so much better than the proposed centralized mandates.… Whether you agree with global warming [as a crisis] or not, the Climate Exchange was at least fulfilling a demand that was entirely voluntary” in the absence of government-mandated cap-and-trade.
Cheryl K. Chumley ([email protected]) writes from northern Virginia.