Gore, Goldman, and Cap and Trade - Tangled Web of Corruption
Re: Gore, Goldman, and Cap and Trade - Tangled Web of Corruption
Gore's Circle Of Business
Al Gore is chairman and founder of a private equity firm called Generation Investment Management (GIM). According to Gore, the London-based firm invests money from institutions and wealthy investors in companies that are going green. “Generation Investment Management, purchases -- but isn’t a provider of -- carbon dioxide offsets,” said spokesman Richard Campbell in a March 7 report by CNSNews.
GIM appears to have considerable influence over the major carbon-credit trading firms that currently exist: the Chicago Climate Exchange (CCX) in the U.S. and the Carbon Neutral Company (CNC) in Great Britain. CCX is the only firm in the U.S. that claims to trade carbon credits.
CCX owes its existence in part to the Joyce Foundation, the Chicago-based liberal foundation that provided $347,000 in grant support in 2000 for a preliminary study to test the viability of a market in carbon credits. On the CCX board of directors is the ubiquitous Maurice Strong, a Canadian industrialist and diplomat who, since the 1970s, has helped create an international policy agenda for the environmentalist movement. Strong has described himself as “a socialist in ideology, a capitalist in methodology.” His former job titles include “senior advisor” to UN Secretary General Kofi Annan, “senior advisor” to World Bank President James Wolfensohn and board member of the United Nations Foundation, a creation of Ted Turner. The 78-year-old Strong is very close to Gore.
CCX has about 80 members that are self-confessed emitters of greenhouse gases. They have voluntarily committed themselves to reduce their emissions by the year 2010 to a level 6% below their emissions in 2000. CCX members include Ford Motor Company, Amtrak, DuPont, Dow Corning, American Electric Power, International Paper, Motorola, Waste Management and a smattering of other companies, along with the states of Illinois and New Mexico, seven cities and a number of universities. Presumably the members “purchase” carbon offsets on the CCX trading exchange. This means they make contributions to or investments in groups or firms that provide forms of “alternative,” “renewable” and “clean” energy.
CCX also has “participant members” that develop the carbon-offset projects. They have names like Carbon Farmers and Eco-Nomics Incorporated. Still, other participant member groups facilitate, finance and market carbon-offset projects to “sequester, destroy or displace” greenhouse gases. CCX aspires to be the New York Stock Exchange of carbon-emissions trading.
Along with Gore, the co-founder of GIM is Treasury Secretary and former Goldman Sachs CEO Hank Paulson. Last September, Goldman Sachs bought 10% of CCX shares for $23 million. CCX owns half the ECX, so Goldman Sachs has a stake there as well.
GIM’s “founding partners” are studded with officials from Goldman Sachs. They include David Blood, former CEO of Goldman Sachs Asset Management (GSAM); Mark Ferguson, former co-head of GSAM pan-European research; and Peter Harris, who headed GSAM international operations. Another founding partner is Peter Knight, who is the designated president of GIM. He was Sen. Al Gore’s chief of staff from 1977-1989 and the campaign manager of the 1996 Clinton-Gore re-election campaign.
Like CCX, the ECX has about 80 member companies, including Barclays, BP, Calyon, Endesa, Fortis, Goldman Sachs, Morgan Stanley and Shell, and ECX has contracted with the European Union to further develop a futures market in carbon trading. What’s in it for the companies? They will benefit either by investing in carbon credits or by receiving subsidies for doing so.
Front and Center
Clearly, GIM is poised to cash in on carbon trading. The membership of CCX is currently voluntary. But if the day ever comes when federal government regulations require greenhouse-gas emitters -- and that’s almost everyone -- to participate in cap-and-trade, then those who have created a market for the exchange of carbon credits are in a position to control the outcomes. And that moves Al Gore front and center. As a politician, Gore is all for transparency. But as GIM chairman, Gore has not been forthcoming, according to Forbes magazine. Little is known about his firm’s finances, where it gets funding and what projects it supports.
We do know that Goldman Sachs has commissioned the World Resources Institute (affiliated with CCX), Resources for the Future, and the Woods Hole Research Center to research policy options for U.S. regulation of greenhouse gases. In 2006, Goldman Sachs provided research grants in this area totaling $2.3 million. The firm also has committed $1 billion to carbon-assets projects, a fancy term for projects that generate energy from sources other than oil and gas. In October 2006, Morgan Stanley committed to invest $3 billion in carbon-assets projects. Citigroup entered the emissions-trading market in May, and Bank of America got in on the action in June.
Some environmentalist groups disparage Gore and his investment banker friends. They say the Gore group caters to others who share their financial interest in the carbon-exchange concept. The bulletin of the World Rainforest Movement says that members of a United Nations-sponsored group called the Intergovernmental Panel on Climate Change (IPCC) stand to gain by approving Gore’s carbon-trading enterprise. The IPCC has devised what it says is a scientific measure of the impact of greenhouse gases on global warming. In fact, the critics charge, the IPCC sanctions a mechanism that mainly promotes the sham concept of carbon exchange.
The global non-profit organization Winrock International is an example of one IPCC panel member that seeks out groups and individuals with an interest in carbon trading. Arkansas-based Winrock provides worldwide “carbon-advisory services.” Winrock has received government grants from the EPA, USAID and the Departments of Labor, State and Commerce, as well as from the Nature Conservancy (whose chairman used to be Henry Paulson). Winrock argues that cap-and-trade carbon trading is the best way to prevent a climate change crisis. But consider this: When a non-profit group takes money from oil companies and advocates drilling for oil as a solution to energy shortages, it is certain to be attacked as a tool of Big Oil. So far, the groups linked to Al Gore have avoided similar scrutiny.
Then there’s the World Resources Institute (WRI). It was the first nongovernmental group to join CCX as an associate member (a designation for virtuous groups whose greenhouse-gas emissions are negligible). Many of its donors are CCX members or otherwise support carbon exchanges, including the Shell Foundation, Whole Foods Market, the Nature Conservancy, American Forest and Paper Association, and the Pew Center for Climate Change, as well as the Rockefeller Brothers Fund and the Ford Foundation.
Connect the Dots
In June 2006, the World Bank announced that it, too, had joined CCX, saying that it intended to offset its greenhouse gas emissions by purchasing emission credits through CCX. The bank says its credits would contribute to restoring 4,600 hectares of degraded pastureland in Costa Rica. Somehow, CCX has figured out that this is an amount equivalent to 22,000 metric tons of emission that the bank calculates are created by its activities.
A World Bank blog called the Private Sector Development Blog regularly features items touting Al Gore and the concept of carbon credits. Its articles typically announce corporate “green” initiatives in which carbon credits are said to cancel out “bad” CO2 emissions released by a company’s activities.
In fact, the World Bank now operates a Carbon Finance Unit that conducts research on how to develop and trade carbon credits. The bank works with Italy, the Netherlands, Denmark and Spain to set up carbon-credit funds in each country to purchase emission credits from firms for use in developing countries. In addition, it runs the Carbon Fund for Europe helping countries meet their Kyoto Protocol requirements. These funds are traded on the ECX (half of which is owned by CCX, itself a creature of Al Gore’s firm, Generation Investment Management). Can we connect the dots?
A website affiliated with An Inconvenient Truth invites concerned citizens to personally fight global warming by offsetting their “carbon footprint.” The ways to do that include changing over to fluorescent light bulbs and turning down your thermostat at home. But the website also urges Americans to offset their personal CO2 emissions by “buying” carbon offsets from a native-American-owned company called Native Energy. Native Energy promotes “renewable” wind energy by buying and selling carbon-emission credits and futures for wind turbine projects on Indian reservations.
What the website doesn’t mention is that that the founder of Native Energy, energy industry veteran Tom Boucher, also founded a marketing company called Green Mountain Energy, a CCX associate partner that describes itself as “the nation’s leading retail provider of cleaner energy and carbon-offset solutions. Green Mountain offers residential, business, institutional and governmental customers an easy way to purchase cleaner, affordable electricity products, as well as the opportunity to offset their carbon footprint.” In other words, Green Mountain sells advisory services to energy users, alerting them to opportunities to contribute to or invest in groups like Native Energy.
So it seems banks and investment houses are going green, eager to enter an emerging emissions market. Meanwhile, environmentalists are discovering new ways to get rich while believing they are saving polar bears and rainforests.
In 2006 Al Gore established his own global-warming non-profit group, the Alliance for Climate Protection, a 501(3)(c) charitable organization. The group favors more stringent environmental policy regulations on the private sector and especially wants cap-and-trade legislation so that companies will be forced to lower their greenhouse gas emissions and buy carbon credits.
The alliance CEO is Cathy Zoi, a former environmental advisor to President Bill Clinton. Gore is chairman of the board, which also includes environmental activist Theodore Roosevelt IV, Clinton EPA Director Carol Browner, the President George H.W. Bush’s National Security Advisor Brent Scowcroft and Reagan-era EPA Director Lee Thomas. Gore has reportedly given the alliance $250,000 and has donated his share of the profits from An Inconvenient Truth to the group.