On May 15, HR 2454: American Clean Energy and Security Act of 2009 was introduced in the US House of Representatives, purportedly "To create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy".
In fact, it's to let corporate polluters reap huge windfall profits by charging consumers more for energy and fuel, and create a new bubble through carbon trading derivatives speculation.
It does nothing to address environmental issues. Yet on June 26, the House narrowly passed the bill by 229 votes to 212 and sent it to the Senate to be debated and voted on.
Strong-arm pressure, threats and bribes got the bill through the House. Forty-four Democrats opposed it. Eight Republicans backed it.
At more than 1200 pages long, few if any lawmakers read it.
Environmental action?
After its passage, energy and environment subcommittee chairperson Edward Markey said: "It's been an incredible six months to go from a point where no one believed we could pass this legislation to a point now where we can begin to say that we are going to send President Obama to Copenhagen in December as the leader of the world on climate change."
House speaker Nancy Pelosi praised the bill as "transformational legislation which takes us into the future". She added that after its passage she took congratulatory calls from Obama, Senate majority leader Harry Reid and former vice-president Al Gore.
Gore has long-standing ties to investment giant Goldman Sachs. In 2004, Gore and former Goldman Sachs assets management division CEO David Blood co-founded Generation Investment Management LLC, a firm likely to profit greatly from cap and trade schemes.
On June 25, Obama said: "Right now, the House of Representatives is moving toward a vote of historic proportions on a piece of legislation that will open the door to a new, clean energy economy."
He called the legislation "balanced and sensible" and "urge(d) every member of Congress — Democrats and Republicans — to come together and support" it.
Polluters love it. So does Wall Street and corporate-friendly environmental groups such as the Environmental Defense Fund.
Green opposition
Opposition to the bill, however, includes Greenpeace, Friends of the Earth (FoE) and Public Citizen (PC).
In a joint May 13 statement, they were "extremely troubled [about] compromises to the already flawed American Clean Energy & Security Act".
The bill contains enough loopholes to make its claimed performance standards worthless, one of which prohibits the Environment Protection Agency from using the Clean Air Act to regulate future greenhouse gas emissions.
That alone means they'll proliferate beyond what new technology reduces on its own — and only then if it's profitable to do it.
On June 23, FoE president Brent Blackwelder said: "Corporate polluters including Shell and Duke Energy helped write this bill, and the result is that we're left with legislation that fails to come anywhere close to solving the climate crisis.
"Worse, the bill eliminates preexisting EPA authority to address global warming — that means it's actually a step backward."
A June 25 Greenpeace statement said: "As it comes to the floor, the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets.
"The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions."
On June 27, PC called the bill "a new legal right to pollute [that] gives away 85 percent of [its] credits to polluters. [It] will not solve our climate crisis but will enrich already powerful oil, coal and nuclear power companies."
PC wants polluters to cut their emissions 80% below 1990 levels by 2050 and pay for credits, not get them free.
It also cited the American Wind Energy Association saying the renewable standard will deliver "effectively zero" new ones.
PC wants consumers protected, not charged a "carbon tax ... The bill doesn't, but should, provide money to help homeowners pay for such things as weatherization or to receive rebates for rooftop solar."
Its main "consumer protection provision distributes free pollution allowances to electric and natural gas utilities (on the assumption) that the 50 different state utility commissions will redirect all that money back to consumers".
In fact, HR 2454 is a thinly-veiled scheme to let companies profit from polluted air, in part financed by a consumer "carbon tax".
Big Coal gets a waiver until 2025. Agribusiness is exempt altogether, even though it's responsible for up to a quarter of greenhouse gas emissions.
The nuclear industry will benefit hugely from the free allowances provision. A leaked memo had Exelon, the nation's largest nuclear power company, bragging that it will reap a US$1 billion-$1.5 billion annual windfall.
Carbon trading is a scam, first promoted in the 1980s under president Ronald Reagan. Then-president Bill Clinton made it a key provision of the 1997 Kyoto Protocol — signed in 1998 but never ratified.
Independent scientists have called Kyoto a "miserable failure" that should be replaced by a meaningful alternative.
The bill is about profits, not environmental remediation. Its emissions reduction targets are so weak, they in effect license pollution by creating a new profit center to do it.
The next bubble
Wall Street will also reap a huge bonanza through carbon trading derivatives speculation. It will be able to exploit what Commodity Futures Trading commissioner Bart Chilton believes will be a $2 trillion market — "the biggest of any (commodities) derivatives product in the next five years".
Others see a future annual market potential of up to $10 trillion.
Government-issued cap and trading carbon allowance permits will let polluters emit a designated amount of greenhouse gases. Those exceeding the limit can buy rights for more from companies below their limit.
Carbon offsets let companies emit excess greenhouse gases, provided they invest in projects purportedly cutting them elsewhere, domestically or abroad. They can also fulfil their obligation by stretching out investments for up to 40 years — far enough ahead to avoid them altogether.
Polluters and Wall Street can also play the derivatives game, including with futures contracts for a designated number of allowances at an agreed on price for a specified date.
Robert Shapiro, former undersecretary of commerce in the Clinton administration, said: "We are on the verge of creating a new trillion dollar market (through) financial assets that will be securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market."
If cap and trade becomes law, this market will explode, just like all the other bubbles before they burst. So Wall Street is pressuring senators to pass it.
The Center of Public Integrity (CPI) said about "880 total businesses and groups … reported they were seeking to influence climate change policy" as addressed in HR 2454. Representing 770 of them are "an estimated 2340 lobbyists" — a 300% increase in the past five years, or more than "four climate lobbyists for every member of Congress".
In 2003, Wall Street employed none on climate issues. CPI says it now has 130 representing the usual big players.
The reason is simple: to create a huge new revenue stream to make up for ones lost. The bill delivers splendidly, setting the stage for another bubble if the Senate passes it.
On July 1, an article by Catherine Austin Fitts on Solari.com blog, headlined "The Next Really Scary Bubble", said: "If you think the housing and credit bubble diminished your financial security and your community, or the bailouts, or the rising gas prices did as well, hold on to your hat.
"Carbon trading is gearing up to make the housing and derivative bubbles look like target practice."
'Massive transfer of wealth'
She quoted Representative Devin Nunes calling it a "massive transfer of wealth" from the public to polluters and Wall Street.
Representative James Sensenbrenner said: "Carbon markets can and will be manipulated using the same Wall Street sleights of hand that brought us the financial crisis."
In a July 2 Rolling Stone article entitled "The Great American Bubble Machine", Matt Taibbi said: "Goldman Sachs (GS) has engineered every major market manipulation since the Great Depression — and they are about to do it again."
Taibbi called GS the "world's most powerful investment bank ... a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money".
It operates by positioning itself "in the middle of (every) speculative bubble, selling investments they know are crap".
It controls Washington and profits by extracting "vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that [lets it] rewrite the rules in exchange for the relative pennies [it] throws [back as] political patronage".
When inflated bubbles burst "leaving millions of ordinary (people) broke and starving, they begin the entire process over again (inflating new bubbles and) lending us back our own money at interest ..."
They've been at this since the 1920s and are "preparing to do it again [with] what may be the biggest and most audacious bubble yet" — a new cap and trade derivatives scam written into HR 2454 with GS positioned to profit most from it.
Contributing $4.452 million to Democrats in 2008 (about $1 million to Obama) was mere pocket change for what it can reap from scams like cap and trade disguised as an environmental plan.
The scheme was devised. GS helped write it. The House passed it and sent it to the Senate.
Unless stopped, it will transfer more of our wealth to corporate polluters and Wall Street on top of all they've stolen so far from derivatives fraud and the imploded housing and other bubbles.
And Goldman will lead the way finding new ways to do it until there's nothing left to extract.
[Abridged from Sjlendman.blogspot.com. Stephen Lendman is a research associate of the Centre for Research on Globalization. He can be reached at <lendmanstephen@sbcglobal.net.]