Chicago Climate Exchange Organization

[dabrockster]

OK, first, I became aware of this organization while watching Glenna Beck and him throwing out how Obama is connected to this organization and helped fund them to get on their feet. So lets not get into a debate about conspiracy's etc. That is not what I am wanting to start (Although I find it suspicious that it is based in Chicago where Obama is from).

I am more interested in figuring out what exactly this organization does. I went to their web site and it looks like it is some sort of stock exchange on Greenhouse gasses etc. It may also include corporations that are committed to reducing their carbon emissions.

But more important, Is it a benefit? Does it hold any viable commodity (Good or Service) that could be traded on any market.

I also became aware that the person who is the founder and CEO is Dr. Richard L. Sandra. The father of Carbon Trading (Per the website).

With the push of Cap and Trade (In the future or even now). Does this organization stand to become a major player and reap the benefits of a Cap and Trade nationally?

Here is some quotes from their site:

Chicago Climate Exchange (CCX) operates North America’s only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide.

CCX Members are leaders in greenhouse gas (GHG) management and represent all sectors of the global economy, as well as public sector innovators. Reductions achieved through CCX are the only reductions made in North America through a legally binding compliance regime, providing independent, third party verification by the Financial Industry Regulatory Authority (FINRA, formerly NASD). The founder and chairman of CCX is economist and financial innovator Dr. Richard L. Sandor, who was named a Hero of the Planet by Time Magazine in 2002 for founding CCX, and in 2007 as the "father of carbon trading."

CCX emitting Members make a voluntary but legally binding commitment to meet annual GHG emission reduction targets. Those who reduce below the targets have surplus allowances to sell or bank; those who emit above the targets comply by purchasing CCX Carbon Financial Instrument® (CFI®) contracts.

CFI Contracts, the CCX Tradable Commodity

The commodity traded on CCX is the CFI contract, each of which represents 100 metric tons of CO2 equivalent. CFI contracts are comprised of Exchange Allowances and Exchange Offsets. Exchange Allowances are issued to emitting Members in accordance with their emission baseline and the CCX Emission Reduction Schedule. Exchange Offsets are generated by qualifying offset projects.

Goals of CCX:

* To facilitate the transaction of GHG allowance trading with price transparency, design excellence and environmental integrity
* To build the skills and institutions needed to cost-effectively manage GHGs
* To facilitate capacity-building in both public and private sectors to facilitate GHG mitigation
* To strengthen the intellectual framework required for cost effective and valid GHG reduction
* To help inform the public debate on managing the risk of global climate change

Benefits of Membership:

* Be prepared: mitigate financial, operational and reputational risks
* Reduce emissions using the highest compliance standards with third party verification
* Prove concrete action on climate change to shareholders, rating agencies, customers and citizens
* Establish a cost-effective, turnkey emissions management system
* Drive policy developments based on practical, hands-on experience
* Gain leadership recognition for taking early, credible and binding action to address climate change
* Establish early track record in reductions and experience with growing carbon and GHG market

Link to their site:
http://www.chicagoclimatex.com/index.jsf


For those who are more market savy then me. Do you have any knowledge of this group? What are your thoughts of such an exchange? Could it be good or bad for us nationally?

My thoughts is I have a hard time seeing any exchange of money for something that is not truly a good or service. I am not sure how one can claim Carbon foot print, or greenhouse gasses as a real tradeable commodity on the market exchange. Maybe I truly do not understand the stock exchange because I maybe there are corporations that may fall into that category as well. I don't know.

[Katy Lied]

I did a lot of research on this stuff in grad school. Stuff like pricing pollution rights (the right to pollute) and the marketization of environmental rights.

The reason why this market is linked to Chicago is not because of Obama, it's because the Chicago Exchange deals in commodities, and used to be willing to make a market in pretty near anything, like pollution rights. Plus the Gary Becker rabble rousing crowd at U Chicago likes to encourage that kind of experimentation in the markets. (Yes, this was the bestest, most kindest thing SU has ever done for someone on CUF).

While pollution markets seem "artificial," they're actually a regulatory market., capable of creating great wealth for someone with a little savvy. When the government regulates something sometimes they create scarcities that give rise to wealth.

(I have an article on this in the Palgrave Dictionary of Econ & Law; email me for a link if you're interested)

For example, for the good of the community, the government in every state has chosen to limit the ability to serve alcohol to those who own licenses. This regulatory action causes wealth to accrue to those who own liquor licenses. And, it creates a market in liquor licenses.

This environmental market basically works the same way. The government chooses to limit the amount of pollution emitted by industries. So each industry takes measures to limit its pollution. The more pollution reduction is achieved, the more expensive the next (marginal) reduction in pollution is. So big polluters pay mom&pop businesses to reduce their output, and take credit for that pollution reduction, thereby reducing pollution for all of us. (The largest polluters are mom&pop dry cleaners).

I could go on, but I see your eyes are glazing over...

[woot]

Hey brock what did you think of Glenn Beck's recent admission that all of his "The Plan" stuff he thinks is being given to him by God? I wonder how much crazier he has to get before the church leadership thinks about stepping in.

[Indy Coug]

Hey brock what did you think of Glenn Beck's recent admission that all of his "The Plan" stuff he thinks is being given to him by God? I wonder how much crazier he has to get before the church leadership thinks about stepping in.

Why does the church need to get involved?

[dabrockster]

Hey brock what did you think of Glenn Beck's recent admission that all of his "The Plan" stuff he thinks is being given to him by God? I wonder how much crazier he has to get before the church leadership thinks about stepping in.

Was this on his TV show or radio?? I have not heard this before. I have not watched him "religiously" over the past month or so. So I can't tell you.

With that in mind I cann't comment until I hear the full context of his comments. he is a fairly sarcastic guy so I could see him easily saying that in jest to rouse the liberals into a frenzy..

When he talks about that type of stuff I tend to gloss over in the eyes. Other times I find it interesting (Like this topic)..

[Moliere]

I did a lot of research on this stuff in grad school. Stuff like pricing pollution rights (the right to pollute) and the marketization of environmental rights.

The reason why this market is linked to Chicago is not because of Obama, it's because the Chicago Exchange deals in commodities, and used to be willing to make a market in pretty near anything, like pollution rights. Plus the Gary Becker rabble rousing crowd at U Chicago likes to encourage that kind of experimentation in the markets. (Yes, this was the bestest, most kindest thing SU has ever done for someone on CUF).

While pollution markets seem "artificial," they're actually a regulatory market., capable of creating great wealth for someone with a little savvy. When the government regulates something sometimes they create scarcities that give rise to wealth.

(I have an article on this in the Palgrave Dictionary of Econ & Law; email me for a link if you're interested)

For example, for the good of the community, the government in every state has chosen to limit the ability to serve alcohol to those who own licenses. This regulatory action causes wealth to accrue to those who own liquor licenses. And, it creates a market in liquor licenses.

This environmental market basically works the same way. The government chooses to limit the amount of pollution emitted by industries. So each industry takes measures to limit its pollution. The more pollution reduction is achieved, the more expensive the next (marginal) reduction in pollution is. So big polluters pay mom&pop businesses to reduce their output, and take credit for that pollution reduction, thereby reducing pollution for all of us. (The largest polluters are mom&pop dry cleaners).

I could go on, but I see your eyes are glazing over...

Incredibly fascinating stuff........and I'm not being sarcastic, well at least not very sarcastic anyway. The whole cap & trade thing seriously fascinates me. I even read through the bill that was passed through the house last year.

My thoughts on this are still premature but if cap & trade does happen, there are some people who stand to make a lot of money on it and those people (for the most part) will be selected by the government. I also firmly believe that cap & trade would do almost nothing for carbon emissions worldwide.

[woot]

Why does the church need to get involved?

Well, they don't need to, but I assume they would want to, since he is a priesthood holder ostensibly claiming to receive revelation for the masses.

[woot]

Was this on his TV show or radio?? I have not heard this before. I have not watched him "religiously" over the past month or so. So I can't tell you.

With that in mind I cann't comment until I hear the full context of his comments. he is a fairly sarcastic guy so I could see him easily saying that in jest to rouse the liberals into a frenzy..

When he talks about that type of stuff I tend to gloss over in the eyes. Other times I find it interesting (Like this topic)..

It was definitely sincere, as it was said in his choked-up, Vicks-under-the-eyes mode. I'll see if I can find a clip. It was on his radio show, as I recall.

[ame="http://mediamatters.org/mmtv/201004200020"]This[/ame] seems to be the clip in question.

[Indy Coug]

Well, they don't need to, but I assume they would want to, since he is a priesthood holder ostensibly claiming to receive revelation for the masses.

Does he say he's speaking for the Church?

[Moliere]

Hey brock what did you think of Glenn Beck's recent admission that all of his "The Plan" stuff he thinks is being given to him by God? I wonder how much crazier he has to get before the church leadership thinks about stepping in.

With a deadpan, Beck insists that he is not political: "I could give a flying crap about the political process." Making money, on the other hand, is to be taken very seriously, and controversy is its own coinage. "We're an entertainment company,"

http://www.forbes.com/forbes/2010/04...-beck-inc.html

I wish everyone knew his intentions, which is to make money. Keep in mind these intentions are no different than those of Olbermann, although Beck is just much better at it.

[woot]

Does he say he's speaking for the Church?

Is the church a higher power than God?

Isn't it pretty well-known that he's Mormon? Clearly, his own movement takes precedent over converting everyone to Mormonism or something, but I'm still guessing that the church leadership doesn't appreciate this kind of thing. I could be wrong. Maybe TM is a big fan.

[dabrockster]

I did a lot of research on this stuff in grad school. Stuff like pricing pollution rights (the right to pollute) and the marketization of environmental rights.

The reason why this market is linked to Chicago is not because of Obama, it's because the Chicago Exchange deals in commodities, and used to be willing to make a market in pretty near anything, like pollution rights. Plus the Gary Becker rabble rousing crowd at U Chicago likes to encourage that kind of experimentation in the markets. (Yes, this was the bestest, most kindest thing SU has ever done for someone on CUF).

While pollution markets seem "artificial," they're actually a regulatory market., capable of creating great wealth for someone with a little savvy. When the government regulates something sometimes they create scarcities that give rise to wealth.

(I have an article on this in the Palgrave Dictionary of Econ & Law; email me for a link if you're interested)

For example, for the good of the community, the government in every state has chosen to limit the ability to serve alcohol to those who own licenses. This regulatory action causes wealth to accrue to those who own liquor licenses. And, it creates a market in liquor licenses.

This environmental market basically works the same way. The government chooses to limit the amount of pollution emitted by industries. So each industry takes measures to limit its pollution. The more pollution reduction is achieved, the more expensive the next (marginal) reduction in pollution is. So big polluters pay mom&pop businesses to reduce their output, and take credit for that pollution reduction, thereby reducing pollution for all of us. (The largest polluters are mom&pop dry cleaners).

I could go on, but I see your eyes are glazing over...

Thanks.. I wouldn't mind you emailing it to me. I'll send you my email. I am having a hard time seeing this as something that could be exchanged. Mainly because it only has this regulatory effect on it. It is not an apple or as Louis Winthorpe the III would say. It's not the Frozen Concentrated Orange Juice (FCOJ) Market.

I find your example intriguing(Alcohol). Regulating Mom and Pop stores at the local level to have a license is interesting, but is it the same level of impact that Cap and Trade would have for this group (Chicago Climate Exchange)?? I think it is different because Alcohol licenses are regulated on a product(Like FCOJ). I just have a hard time seeing this as a viable market item because it does not produce anything....


I hope I am making sense...

[dabrockster]

Incredibly fascinating stuff........and I'm not being sarcastic, well at least not very sarcastic anyway. The whole cap & trade thing seriously fascinates me. I even read through the bill that was passed through the house last year.

My thoughts on this are still premature but if cap & trade does happen, there are some people who stand to make a lot of money on it and those people (for the most part) will be selected by the government. I also firmly believe that cap & trade would do almost nothing for carbon emissions worldwide.

My concern. Are we creating a similar failure like the 2nd market created in the Housing bubble.. Is it built upon faulty products that are being propped up more then they should to generate money but in the end will be a failure...

[Moliere]

Thanks.. I wouldn't mind you emailing it to me. I'll send you my email. I am having a hard time seeing this as something that could be exchanged. Mainly because it only has this regulatory effect on it. It is not an apple or as Louis Winthorpe the III would say. It's not the Frozen Concentrated Orange Juice (FCOJ) Market.

I find your example intriguing(Alcohol). Regulating Mom and Pop stores at the local level to have a license is interesting, but is it the same level of impact that Cap and Trade would have for this group (Chicago Climate Exchange)?? I think it is different because Alcohol licenses are regulated on a product(Like FCOJ). I just have a hard time seeing this as a viable market item because it does not produce anything....


I hope I am making sense...

You do realize that there are already cap and trade systems in place in the US right? The SO2 emissions are regulated by individual states or areas and companies are given emission rights and when they don't have enough emission rights they have to purchase those rights from others that have excess. The mechanisms already exist for these things because the state regulation has created a market for them (like Katy indicated above).

This tends to work well with localized pollutants like SO2, which causes acid rain, however when you are talking about CO2 which only supposedely affects global warming then you are getting into crazy talk, well crazy talk unless the whole world is on board with the cap and trade program.

But back to Katy's point, when emissions become regulated, this creates the market for emission allowances. They have a value and that value is driven up the tighter the restrictions become. The whole idea of the market is to allow people with excess allowances to be able to sell them to people with a deficiency. As the regulations are tightened and less allowances are in the marketplace, supply is lower and that drives up the price of the emission allowances.

[dabrockster]

You do realize that there are already cap and trade systems in place in the US right? The SO2 emissions are regulated by individual states or areas and companies are given emission rights and when they don't have enough emission rights they have to purchase those rights from others that have excess. The mechanisms already exist for these things because the state regulation has created a market for them (like Katy indicated above).

This tends to work well with localized pollutants like SO2, which causes acid rain, however when you are talking about CO2 which only supposedely affects global warming then you are getting into crazy talk, well crazy talk unless the whole world is on board with the cap and trade program.

But back to Katy's point, when emissions become regulated, this creates the market for emission allowances. They have a value and that value is driven up the tighter the restrictions become. The whole idea of the market is to allow people with excess allowances to be able to sell them to people with a deficiency. As the regulations are tightened and less allowances are in the marketplace, supply is lower and that drives up the price of the emission allowances.

Thank you. That is very helpful.. I will look more into SO2..