"I walked away from Kyoto because it would have damaged the American economy, it would have destroyed the American economy, it was a lousy deal for the American economy."

-- President George W. Bush, 2005

Reading the tea leaves this week is going to take a little time, but trust me, it is worth it.

The newly named “Clean Energy Jobs and American Power Act (a.k.a. Climate Bill, Cap and Trade) -- introduced in September 2009 by Sens. Kerry, DEMOCRAT-Mass., and Joe Lieberman INDEPENDENT nee' DEMOCRAT-Conn. -- shows once again how the Obama regime thinks that putting lipstick on a pig will fool the American people into believing it’s not a pig. (Remember The War on Terrorism, now called the Overseas Contingency?). But this pig is going to cost Americans a LOT of money and possibly our whole system of governance. Think that I am being an alarmist? Let’s look at some facts.

What is “Cap and Trade”?

A central authority, usually a government, sets a “cap” on the amount of pollutants that an entity, usually a business, can emit.

The offending entities are issued emission permits and credits.

The emission credits represent the amount of pollutants the entity is allowed to emit, which of course, can’t exceed the “cap.” The majority of permits have been free, "grandfathered" into the legislation for existing entities. Entities that need to emit more pollutants than allowed by their cap, can purchase excess credits from those entities that remain below their cap. This transfer of credits, or allowances, is referred to as a “trade.” But these “trades” aren’t limited to businesses. A huge global carbon trading market.

The 2005 Kyoto Treaty attempted to regulate six "greenhouse gas"

emissions by developed nations. The Intergovernmental Panel on Climate Control, IPCC, set the emission reduction caps for the participating countries; the United States opted out (Thank you, President Bush).

Participating countries can “trade” their allowances through the International Emissions Trading (IET), which allows countries that use less than their assigned allotted units to sell them to nations that exceed their quota.

Participating countries can also trade for carbon credits, or offsets, by sponsoring greenhouse projects in other countries. While cap and trade limits the availability of trading between entities, the offset projects are a license to print new cheaper and less regulated permits. All cap and trade schemes allow offset credits to be traded through “linking mechanisms,” including the EU Emissions Trading Scheme (EU ETS) and the cap and trade scheme currently moving through the U.S. Congress.

The creation of a global market for emissions trading by the Kyoto Treaty has led to multibillion dollar financial markets, such as the EU ETS, which is the world’s largest carbon market.

How is it working?

So, how is all of this working since approval of the 1997 Kyoto Treaty in 2005?

During the treaty's first phase begun in 2005, the “caps” were set based on historical emissions data provided by the industry itself, according to Carbon Trade Watch, a project of the Transnational Institute. The institute noted a clear incentive to inflate the data so that the industry gets an excess amount of credits.This is what has happened in all of the cap and trade markets, including the EU ETS, which awarded major polluters with more free pollution permits (called EUAs, European Union Allowances) than their actual level of carbon emissions. As a result, there was no incentive to reduce emissions or buy permits, and the price of the permits collapsed.

The 2nd phase begun in 2008 was supposed to reflect changes based on lessons learned during phase I. It initially appeared promising when, for the first time, polluters were awarded fewer permits than their actual level of emissions but the majority of industries still had a surplus of permits. Even though many industries reduced emissions due to the EU-wide recession, in 2009 they were scheduled to receive the same amount of permits. The failure of the cap and trade scheme is even more apparent when “offsets” are taken into account. The EU claimed that during 2008, emission reductions of 3%, or 50 million tons, from sectors including the EU ETS were achieved; however, at least 80 million tons of carbon offsets were bought as part of the cap and trade scheme.

Who Profits from Carbon Trading?

I can guarantee you it’s not going to be the average American citizen, but we will be footing the majority of the bill. During an interview on January 2008, President Obama said, “Under my plan, electricity rates would necessarily skyrocket.”

Why?

Because free emission permits are like subsidies, and since the permits are based on historical emissions, the biggest environmental offenders get the largest subsidies. Huge profits are gained by doing what is called “opportunity costs.” A good example is how power companies choose to meet their ETS target in the cheapest way, which is usually buying credits from the UN-administered Clean Development Mechanism (CDM), called Certified Emissions Reductions (CERs).

These costs are passed on to consumers as if the power companies chose the most expensive option, which would be to actually reduce their emissions. Researchers predict windfall profits to power companies during Phase II could be between $23-$71 billion and ironically enough, would be concentrated in countries with the highest level of emissions.

So what this in effect has done is created a new way industries can make consumers pay by charging them inflated costs to meet the ETS targets, while not reducing their emissions at all.

Practically, this gives further incentives to industries to continue generating high emissions?

Phase III is scheduled to begin in 2013, with renewed promises of "reform." The new system of permit allocation will be based on auctioning. However, the system of “banking” unused credits means that entities can carry over unused credits into 2013, thereby starting with a significant surplus.

Some projections show as many as 700 million surplus permits by the end of Phase II. If entities bank their “offsets” as well, which is the cheapest option; this could lead to surpluses of 1.6 billion ton, enough to ensure that the ETS would not require emissions reductions for the next 7 years. Additionally, European industries claim that the EU ETS puts their businesses at risk due to strict regulations on factory emissions. Therefore, they say, it is projected that more than three-fourths of manufacturers probably will get free permits.

Perhaps the biggest unintentional benefactor of carbon trading is Russia. When Russia signed the Kyoto Treaty, it was given an annual emissions limit based on the astronomical pollutants being pumped out by the old, filthy Soviet industries in 1990. Since then Russia’s industrial base has only used a fraction of its allowances.

One analyst reports in a 2008 TimesOnline article that “Russia must be singled out as a potential threat to the ability of the market to produce a meaningful carbon price.” Because Russia is one of the world’s biggest suppliers of coal, gas, and oil, it is therefore in control of the system for reducing emissions from these fuels. That would mean that if we submit to cap and trade, we could end up paying Russia for fuel – and then paying them again for the right to burn it.

The Environment Protection Agency, EPA, projects in the Economic Impact of the Clean Energy Jobs and the American Power Act dated October 23, 2009, that the increased cost to the American household will only be $80 - $110 annually, based on the assumption that energy usage will be reduced substantially and our benevolent government will fairly, and adequately, rebate Americans to offset increased costs.

Uhmmm…..wonder if they’ll do as good a job with the American Protection Act as they have with Social Security? Or maybe Medicare/Medicaid? Wait, those are all bankrupt…what about Fannie Mae or Freddie Mac? Ooops, they just had to request another $19 billion from the Treasury Department after losing $21.1 billion during the first quarter of the year. But I guess we’re supposed to be naïve enough to believe that somehow our ever efficient, benevolent government is going to make sure that we don’t have to bear the burden of these trading schemes while the UN and U.S. governments rake in profits.

Only the incredibly naïve would believe that the American taxpayer isn’t going to bear a substantial financial burden for funding yet another bill from the Obama regime.

What about all those “Clean Energy Jobs”?

One of the key debates over “cap and trade” is “carbon leakage.”

Industries claim that the strict regulations on factory emissions in one part of the world would encourage industries to move to less restrictive locations.

A report in Waste & Recycling News says cap and trade legislation proposed by the Obama regime could result in the loss of more than 3 million jobs by 2030. Additionally, the legislation could cost the average household $2,100 annually.

The study concluded that by 2030, natural gas and electricity costs would increase by more than 50 percent and motor fuels costs by 78 cents per gallon. The combined effects of increased energy costs and restrictive regulations would force industries to relocate and/or reduce productivity, again leading to the loss of American jobs, according to the report compiled on behalf of the Coalition for Affordable American Energy, which receives funding from more than 180 business groups. The report was written by Bruce Gieselman.

In a brief posted on May 5, 2010 and prepared by Bruce Arnold of the Congressional Budget Office’s Microeconomic Studies Division, the CBO analyzed the research on the effects that policies to reduce greenhouse gases would have on employment and concluded that total employment during the next few decades would be slightly LOWER than would be the case in the absence of such policies. In particular, job losses in the industries that shrink would surpass employment gains in other industries.

Who is Behind This and Why?

The Clean Energy Jobs and American Power Act will “put Americans back to work and take charge of our security, our energy future and the fate of our planet,” according to cosponsor Kerry’s Web site.

Wow! All of our problems solved by one little old bill; Why would anyone possibly reject this? Could it be because everywhere that these cap and trade schemes have been tried, they have failed to reduce emissions, increase jobs or reduce energy dependence?

In a recent Time magazine article, Kerry and Lieberman confess to making concessions to develop their conclusions, including $54 billion in loan guarantees for up to 12 nuclear plants; major carbon emitters receipt of FREE carbon allowances; carbon limits phased in until 2013; and deferral of manufacturers' caps until 2016. Under this bill, upper and lower limits on the price of carbon in a trading market would be between $12-$25 per ton, steadily increasing annually.

The bill would allow expanded offshore oil and gas drilling -- with some restrictions. States could veto offshore drilling in a neighboring state and opt out of drilling within 75 miles of its shores. States that allow drilling would retain 37 percent of the federal royalties from oil and gas development (currently all the money is kept by Washington).

Massachusetts' Kerry, during an interview, tried to sell the American people on how great this new bill was by saying that the support is broad among the American people, including Faith Based organizations. But when you look up these so-called faith-based groups, The National Council of Churches of Christ for Eco Justice, you will discover they are part of the DemocracyInAction.org.

What is DemocracyInAction? According to their own Web site, they are an organization that is dedicated to promoting the progressive agenda, “A

501(c) 3 nonprofit organization itself, believes technology can be a decisive force for social change, we exist to empower those who share our values of ecological and social justice to advance the progressive agenda.”

But to really understand who is behind the whole cap-and-trade scheme, a global look is necessary. On May 15, show host Glenn Beck on the Fox News channel said: “We are talking about a group of people that want to fundamentally transform the world economy and set up a global governance system.”

Beck deemed these supporters as “Crime Inc.” and they include the Chicago Climate Exchange and CCX, including CCX director Maurice Strong, with strong ties to global-warming's Al Gore.

“The American Power Act has nothing to do with 'American' power unless it means the redistribution of America's power from the American people to the global elite” Beck said.

ACTION ITEMS TODAY:

CALL YOUR SENATOR AND TELL HIM/HER YOU KNOW THAT THIS ENERGY BILL HAS NOTHING TO DO WITH ENERGY. IT HAS TO DO WITH MORE CORRUPTION AND MORE BACK ROOM DEALS. YOU WILL NOT STAND FOR THIS AND YOU EXPECT HIM/HER TO VOTE NO ON HIGHER TAXES WHICH WILL HURT OUR ECONOMY. IF THEY REFUSE TO LISTEN TO THE AMERICAN PEOPLE AND ONLY TO SPECIAL INTERESTS - THEY CAN PACK THEIR BAGS AND HEAD HOME BECAUSE WE WILL REMEMBER IN NOVEMBER.

TO REACH YOUR SENATOR AND OTHERS YOU WANT TO CONTACT: CLICK HERE

http://whatreallyhappened.com/WRHARTICLES/us_senate_fax.html?q=us_s...