Climate Change Fraud: Hacked Emails!

[sullivan]

Freedom of information, my okole...

Willis Eschenbach

People seem to be missing the real issue in the CRU emails. Gavin over at realclimate keeps distracting people by saying the issue is the scientists being nasty to each other, and what Trenberth said, and the Nature "trick", and the like. Those are side trails. To me, the main issue is the frontal attack on the heart of science, which is transparency.

Science works by one person making a claim, and backing it up with the data and methods that they used to make the claim. Other scientists attack the work by (among other things) trying to replicate the first scientist's work. If they can't replicate it, it doesn't stand. So blocking the FOIA allowed Phil Jones to claim that his temperature record (HadCRUT3) was valid science.

This is not just trivial gamesmanship, this is central to the very idea of scientific inquiry. This is an attack on the heart of science, by keeping people who disagree with you from ever checking your work and seeing if your math is correct.

As far as I know, I am the person who made the original Freedom Of Information Act to CRU that started getting all this stirred up. I was trying to get access to the taxpayer funded raw data that they built the global temperature record out of. I was not representing anybody, or trying to prove a point. I am not funded by Mobil, I'm an amateur scientist with a lifelong interest in the weather. I'm not "directed" by anyone, I'm not a member of a right-wing conspiracy. I'm just a guy trying to move science forwards.

full article here

[sullivan]

I am commenting NOW because anything that I would have to say about this has already been said EXCEPT for the most glaring question of all:

WHY DID THIS REPORTER SIT ON THE MOST DAMAGING EVIDENCE OF THE LIES AND COVER-UP OF "GLOBAL WARMING" FOR OVER A MONTH?  

WHY?

Because the BBC are a thoroughly compromised organisation dedicated to propagandising, that's why.

[LordLindsey]

:lol:  :!:  :ugeek:

I was looking for a little more substance, but, HELL...

THAT'S A STRAIGHT ENOUGH ANSWER FOR ME!

LINDSEY

[sullivan]

A small collection of global warming propagandist comments regarding the emails.
Eg:
"The impressive thing about this conspiracy is that they managed to convince the planet's glaciers, sea ice, and hydrological cycles to play along."

Yes, they did, while the planet was actually warming. Now that it is cooling, the sea-ice extent has been building up and the glaciers have started growing again. Even if they had not, the least impressive thing about this conspiracy is not that they proved the planet was warming (which after all, an idiot could see) but that the failed to prove that CO2 was the cause of this warming and more importantly, that variations in solar output were not the primary driver. A fundamental rule of science is that correlation does not prove causation - they seemed to have ignored this from the outset.

[sullivan]

:lol:  :!:  :ugeek:

I was looking for a little more substance, but, HELL...

THAT'S A STRAIGHT ENOUGH ANSWER FOR ME!

Look into an organisation called Common Purpose. The BBC is apparently riven with these people. Their exact purpose is not completely known, but they are advancing an agenda and my bets are that the agenda isn't benign.

[kolnidre]

:lol:  :!:  :ugeek:

I was looking for a little more substance, but, HELL...

THAT'S A STRAIGHT ENOUGH ANSWER FOR ME!

Look into an organisation called Common Purpose. The BBC is apparently riven with these people. Their exact purpose is not completely known, but they are advancing an agenda and my bets are that the agenda isn't benign.

Common Purpose is Communitarian in nature. While the masters of deception herd nearly everyone into two left/right camps and get them to denounce each other as communists and right-wing nutjobs using cut-outs like Limbaugh, Beck, Chumpsky and Keith Obamamann, the real agenda of synthesis of hyper capitalism and socialist planning and control, known as Communitarianism, marches on. It is being manifested in such programs as the UN's Agenda 21 and Common Purpose, as well as the huge propaganda push for community rights to override individual liberties.

Niki Raapana has done a masterful job of explaining Communitarianism at her Anti-Communitarian League and blogspot sites:
http://nord.twu.net/acl/
http://nikiraapana.blogspot.com/

She is also an anti-Zionist.

[thirdeyewise]

A message to the environmental movement

[youtube:25jnow8g]http://www.youtube.com/watch?v=uEggt0ldQUI[/youtube]25jnow8g]

The Club of Rome's 1991 book, The First Global Revolution, which says:
"In searching for a common enemy against whom we can unite, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like, would fit the bill. In their totality and their interactions these phenomena do constitute a common threat which must be confronted by everyone together. But in designating these dangers as the enemy, we fall into the trap, which we have already warned readers about, namely mistaking symptoms for causes. All these dangers are caused by human intervention in natural processes, and it is only through changed attitudes and behaviour that they can be overcome. The real enemy then is humanity itself."

[sullivan]

the real agenda of synthesis of hyper capitalism and socialist planning and control, known as Communitarianism, marches on.

That pretty neatly sums up fascism, the original "third way".

[Jenny Lake]

Niki Raapana's blog is fascinating --thanks for posting it Kol Nidre.
It makes me nervous to start thinking about 'Game Theory' in all this and for the deeper implications of Big Science to further define 'itself' --the most ominous aspect to me ever since Arthur C. Clarke's "millenium" prediction. This event is going to narrow the field.

Re:the deliberate release of the "hacked" email:

It's been a long time since we've seen such a well coordinated effort to ditch a failed policy, but I believe the evidence supports that conclusion. I have always believed that the NWO would come on the heels of a rapid succession of catastrophic events which would allow no other options. Events which could be manipulated to focus on the precise time when The Plan is finally realized. Several people whom I consider credible due to their positions in the movement, sincerely believe that the opportune time for the transition will be like a window which will be open for a period of time before it closes, not to open again for thousands of years. According to many of those sources, we are presently within that window of opportunity.

[sullivan]

From The Daily Mail 25th November 2009

The scientist at the heart of the climate change scandal was under growing pressure to quit last night.

George Monbiot, a leading environmentalist, said Phil Jones should resign from the Climatic Research Unit over leaked emails that appear to show researchers suppressed scientific data.

More emails came to light yesterday, including one in which an American climatologist admitted it was a travesty that scientists could not explain a lack of global warming in recent years.

In another note, UK researchers dismissed the work of scientists challenging global warming as 'crap'.

Another appeared to call for pressure on the BBC after a reporter suggested that evidence for rising temperatures since 2001 was thin.

read full article

[sullivan]

Vincent Gray, Pajamas Media

Nothing about the revelations surprises me. I have maintained email correspondence with most of these scientists for many years, and I know several personally. I long ago realized that they were faking the whole exercise.

When you enter into a debate with any of them, they always stop cold when you ask an awkward question. This applies even when you write to a government department or a member of Parliament. I and many of my friends have grown accustomed to our failure to publish and to lecture, and to the rejection of our comments submitted prior to every IPCC report.

But only recently did I realize that I had evidence of their fraud in my possession almost from the birth of my interest in the subject.

I had copies of these two papers in 1990:

Jones, P. D., P. Ya. Groisman, M. Coughlan, N. Plummer, W. C. Wang & T. R. Karl 1990. Assessment of urbanization effects in time series of surface air temperature over land, Nature 347 169- 172.

Wang, W-C, Z. Zeng, T. R Karl, 1990. Urban Heat Islands in China. Geophys. Res. Lett. 17, 2377-2380.

The first paper has been the major evidence presented by Jones in all of the IPCC reports to dismiss the influence of urban change on the temperature measurements, and also has been used as an excuse for the failure to mention most of the unequivocal evidence that such urban effects exist. The paper was even dragged out again for the 2007 IPCC report.

The second paper, which shared authors Wang and Karl from the first paper, used the very same data from China which the first paper used to demonstrate the absence of urban influence — yet instead concluded that same data to be proof of the existence of urban influence.

read full article

[sullivan]

Climategate e-mails sweep America, may scuttle Barack Obama's Cap and Trade laws

The Telegraph (London),  November 26th, 2009

Just a few considerations in addition to previous remarks about the explosion of the East Anglia Climategate e-mails in America. The reaction is growing exponentially there. Fox News, Barack Obama's Nemesis, is now on the case, trampling all over Al Gore's organic vegetable patch and breaking the White House windows. It has extracted some of the juiciest quotes from the e-mails and displayed them on-screen, with commentaries. Joe Public, coast-to-coast, now knows, thanks to the clowns at East Anglia's CRU, just how royally he has been screwed.

Senator James Inhofe's Senate Committee on Environment and Public Works has written to all the relevant US Government agencies, acquainting them with the nature of the e-mails. But the real car crash for Obama is on Capitol Hill where it is now confidently believed his Cap and Trade climate legislation is toast. It was always problematic; but with a growing awakening to the scale of the scientific imposture sweeping the world, as far as the Antipodes, the clever money is on Cap and Trade laws failing to pass, with many legislators sceptical and the mid-term elections looming ever closer.

read full article

[sullivan]

Climategate: sack 'no longer credible' Michael Mann from IPCC urges climatologist

The Telegraph (London), November 27th, 2009

Not everyone shares the BBC's rosy view of discredited Climategate scientist Michael Mann (inventor of the roundly discredited Hockey Stick graph and unlikely Youtube comedy musical star) (hat tip: Bishop Hill) (Still less will they do so after the gobsmacking revelations by Steve McIntyre that in his latest paper, he's actually got his data UPSIDE DOWN!)

One of his IPCC co-authors Eduardo Zorita has demanded that Mann should be banned from contributing to future reports because his scientific assessments are "not credible any more." Zorita also calls for the barring of CRU's director Phil Jones and another IPCC lead author, Stefan Rahmstorf.

read full article

[thirdeyewise]

Climategate: five Aussie MPs lead the way by resigning in disgust over carbon tax

Australia is leading the revolt against Al Gore's great big AGW conspiracy – just as the Aussie geologist and AGW sceptic Professor Ian Plimer predicted it would.
ABC news reports that five frontbenchers from Australia's opposition Liberal party have resigned their portfolios rather than follow their leader Malcolm Turnbull in voting with Kevin Rudd's Government on a new Emissions Trading Scheme.


read:
http://blogs.telegraph.co.uk/news/jamesdelingpole/100018003/climategate-five-aussie-mps-lead-the-way-by-resigning-in-disgust-over-carbon-tax/

[MikeWB]

They'll still pass the Copenhagen accord since this whole scam is not about the climate anyway. They all know that. It's all about global control and taxes and their masters are pushing for it.

[Jenny Lake]

...and alot of funding promises have been made to the 'threatened by warming" countries who are expecting billions in pay-outs. Like this article from Yahoo news today: http://news.yahoo.com/s/ap/cb_climate_trinidad

[sullivan]

The Telegraph (London) 28 Nov 2009

The U-turn by the university follows a week of controversy after the emergence of hundreds of leaked emails, "stolen" by hackers and published online, triggered claims that the academics had massaged statistics.

In a statement welcomed by climate change sceptics, the university said it would make all the data accessible as soon as possible, once its Climatic Research Unit (CRU) had negotiated its release from a range of non-publication agreements.

The publication will be carried out in collaboration with the Met Office Hadley Centre. The full data, when disclosed, is certain to be scrutinised by both sides in the fierce debate.

A grandfather with a training in electrical engineering dating back more than 40 years emerged from the leaked emails as a leading climate sceptic trying to bring down the scientific establishment on global warming.

David Holland, who describes himself as a David taking on the Goliath that is the prevailing scientific consensus, is seeking prosecutions against some of Britain's most eminent academics for allegedly holding back information in breach of disclosure laws.

read full article

[sullivan]

The Telegraph (London) November 27th 2009

Breaking news from the splendid Bishop Hill. It seems the AGW establishment has launched an urgent damage limitation exercise in order to whitewash the Climategate scandal in time for Copenhagen.

Here's the (so far unconfirmed) story:

    1) Lord Rees (Royal Society) to be asked by UEA to investigate CRU leak.

    2) Foreign Office and government leaning heavily on UEA to keep a lid on everything lest it destabilises Copenhagen.

    3) CRU asked to prepare data for a pre-emptive release in past couple of days but trouble reconciling issues between data bases has stopped this.

The appointment of Lord Rees, if confirmed, is especially worrying. It's the rough equivalent of appointing King Herod's grand vizier to investigate a mysterious outbreak of mass baby killing in Judaea.

read full article

[sullivan]

WattsUpWithThat.com 27 November 2009

This is a surprise. Professor Mike Hulme of the University of East Anglia suggests that the "I.P.C.C. has run its course". I agree with him. We really need to remove a wholly political organization, the United Nations, from science.

read more

[sullivan]

About those emails and 'peer review.'

Wall Street Journal, 27 November 2009

The climatologists at the center of the leaked email and document scandal have taken the line that it is all much ado about nothing. Yes, the wording of their messages was unfortunate, but they insist this in no way undermines the underlying science. They're ignoring the damage they've done to public confidence in the arbiters of climate science.

"What they've done is search through stolen personal emails—confidential between colleagues who often speak in a language they understand and is often foreign to the outside world," Penn State's Michael Mann told Reuters Wednesday. Mr. Mann added that this has made "something innocent into something nefarious."

read more

[sullivan]

iceagenow.com 21 November 2009

Excerpts from a post by Michael Shedlock - "It's now official. Much of the hype about global warming is nothing but a complete scam. The global warming thesis was completely fabricated.

"Inquiring minds are reading Hacked: Hadley CRU FOI2009 Files on The Reference Frame by Luboš Motl, a physicist from the Czech Republic.

"So far, the most interesting file I found in the "documents" directory is pdj_grant_since1990.xls which shows that since 1990, Phil Jones has collected a staggering 13.7 million British pounds ($22.6 million) in grants.

read more

[Jenny Lake]

Thanks Sully for making a great news source in this thread!

[Christopher Marlowe]

As I was trying to find the emails, I noticed that a lot of stories have been spinning this one as nothing but a "right wing attack" story. Most people don't have time to read, and just accept the spin. NPR had a story on the emails saying the climatologists were just covering up inferior data that they thought might confuse people. Holy crap! MSM is pure drivel.

Anyway, I found a good source that had links and short summaries to a lot of the emails so that people can read the emails and decide for themselves. (But really, if you're covering up lies you created, isn't that consciousness of guilt?)

http://bishophill.squarespace.com/blog/ ... gs-33.html

[sullivan]

The Times (UK), 29 November 2009

Scientists at the University of East Anglia (UEA) have admitted throwing away much of the raw temperature data on which their predictions of global warming are based.

It means that other academics are not able to check basic calculations said to show a long-term rise in temperature over the past 150 years.

The UEA's Climatic Research Unit (CRU) was forced to reveal the loss following requests for the data under Freedom of Information legislation.

The data were gathered from weather stations around the world and then adjusted to take account of variables in the way they were collected. The revised figures were kept, but the originals — stored on paper and magnetic tape — were dumped to save space when the CRU moved to a new building.

read full article

[sullivan]

2g6ut10t]

[MikeWB]

Leaked emails won't harm UN climate body, says chairman
Rajendra Pachauri says there is 'virtually no possibility' of a few scientists biasing IPCC's advice, after UAE hacking breach

Read part one of our Pachauri interview: 'Our lifestyles are unsustainable'

James Randerson
guardian.co.uk,    Sunday 29 November 2009 17.03 GMT



Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change. Photograph: Jay Directo/AFP/Getty Images

There is "virtually no possibility" of a few scientists biasing the advice given to governments by the UN's top global warming body, its chair said today.

Rajendra Pachauri defended the Intergovernmental Panel on Climate Change (IPCC) in the wake of apparent suggestions in emails between climate scientists at the University of East Anglia that they had prevented work they did not agree with from being included in the panel's fourth assessment report, which was published in 2007.

The emails were made public this month after a hacker illegally obtained them from servers at the university.

Pachauri said the large number of contributors and rigorous peer review mechanism adopted by the IPCC meant that any bias would be rapidly uncovered.

"The processes in the IPCC are so robust, so inclusive, that even if an author or two has a particular bias it is completely unlikely that bias will find its way into the IPCC report," he said.

"Every single comment that an expert reviewer provides has to be answered either by acceptance of the comment, or if it is not accepted, the reasons have to be clearly specified. So I think it is a very transparent, a very comprehensive process which insures that even if someone wants to leave out a piece of peer reviewed literature there is virtually no possibility of that happening."

The IPCC, which was set up by the UN in 1988, is the world's leading authority on climate change. It advises governments on the science behind the problem and was awarded the Nobel peace prize along with Al Gore in 2007.

Pachauri was responding to one email from 2004 in which Professor Phil Jones, the head of the climatic research unit at UEA, said of two papers he regarded as flawed: "I can't see either ... being in the next Intergovernmental Panel on Climate Change report. Kevin [Trenberth] and I will keep them out somehow – even if we have to redefine what the peer-review literature is!"

Pachauri said it was not clear whether the wording of the emails reflected the scientists' intended actions, but said: "I really think people should be discreet ... in this day and age anything you write, even privately, could become public and to put anything down in writing is, to say the least, indiscreet ... It is another matter to talk about this to your friends on the telephone or person to person but to put it down in writing was indiscreet. If someone was to say something like this in an IPCC authors' meeting then there are others who would chew him up."

Jones has denied any suggestion that he tried to suppress scientific evidence he disagreed with or that he manipulated data.

Some commentators, including the former chancellor Nigel Lawson and the environmental campaigner and Guardian writer George Monbiot, have called on Jones to resign but Pachauri said he did not agree. He said an independent inquiry into the emails would achieve little, but there should be a criminal investigation into how the emails came to light.

Pachauri said he doubted that trust in the IPCC would be damaged by the affair. "People who are aware of how the IPCC functions and are appreciative of the credibility that the IPCC has attained will probably not be swayed by an incident of this kind," he said.

He pointed out that five days after the emails were made public, Barack Obama announced a major commitment to cutting greenhouse gas emissions ahead of the UN climate summit in Copenhagen.

[MikeWB]

Western lifestyle unsustainable, says climate expert Rajendra Pachauri
Ahead of the Copenhagen summit, leading scientist and IPCC chair Rajendra Pachauri warns of radical charges and regulation if global disaster is to be avoided

James Randerson
The Observer,    Sunday 29 November 2009


Rajendra Pachauri accepts the Nobel prize on behalf of the IPCC in 2007. Photograph: AFP/Getty Images

Hotel guests should have their electricity monitored; hefty aviation taxes should be introduced to deter people from flying; and iced water in restaurants should be curtailed, the world's leading climate scientist has told the Observer.

Rajendra Pachauri, the chair of the Intergovernmental Panel on Climate Change (IPCC), warned that western society must undergo a radical value shift if the worst effects of climate change were to be avoided. A new value system of "sustainable consumption" was now urgently required, he said.

"Today we have reached the point where consumption and people's desire to consume has grown out of proportion," said Pachauri. "The reality is that our lifestyles are unsustainable."

Among the proposals highlighted by Pachauri were the suggestion that hotel guests should be made responsible for their energy use. "I don't see why you couldn't have a meter in the room to register your energy consumption from air-conditioning or heating and you should be charged for that," he said. "By bringing about changes of this kind, you could really ensure that people start becoming accountable for their actions."

Pachauri also proposed that governments use taxes on aviation to provide heavy subsidies for other forms of transport. "We should make sure there is a huge difference between the cost of flying and taking the train," he said. Despite the fact that there is often little benefit in time and convenience in short-haul flights, he said people were still making the "irrational" choice to fly. Taxation should be used to discourage them.

He dismissed suggestions that the actions he was advocating were insignificant next to the decisions that would be made at the UN's climate summit which opens in Copenhagen in seven days' time. "In a democracy, governments will ultimately respond to what the people want," he said. "If the people have a strong desire which can be demonstrated through their actions, as well as their vote at the time of elections, you can bring about a major shift in policy."

Pachauri caused controversy last year by advocating, in an interview with the Observer, that people should eat less meat because of the levels of carbon emissions associated with rearing livestock. He is scheduled to deliver a keynote speech at the opening session of the Copenhagen summit.

He said the opening bids from China and the US on emissions – announced last week – had given hope that a deal could be reached in Copenhagen, even if some details would have to be filled in later. "I think it provides momentum to the whole negotiations," he said.

Pachauri was speaking to the Observer before a public discussion at the Wellcome Collection in Euston with the philosopher AC Grayling yesterday. It will be broadcast by the BBC World Service on Wednesday.

He said that he also believed car use would have to be "curbed": "I think we can certainly use pricing to regulate the use of private vehicles." He added he was a supporter of former London mayor Ken Livingstone's plan to increase the congestion charge to £25 for the most polluting vehicles. The proposal was dropped by Boris Johnson and the charge currently stands at £8. Pachauri also denounced the practice in some restaurants of providing iced water to customers who had not ordered it. "It is just an enormous amount of waste that we don't even think about," he said.

Ultimately, Pachauri said the value shift that was needed would take a generation to take hold. "I think the section of society that will make it happen is essentially young people. I think they will be far more sensitive than adults, who have been corrupted by the ways we have been following for years now."

[sullivan]

Thanks Sully for making a great news source in this thread!

You're welcome. Although it is one of many pertinent issues, it is one that is highly newsworthy right now, and one with which we can hopefully gain some traction.

[Ognir]

What a moron that Ed is, came out defensive and had sweet fa all to say :lol:

[MikeWB]

Could Cap and Trade Cause Another Market Meltdown?

By Rachel Morris | Mon June 8, 2009 4:00 AM PST
You've heard of credit default swaps and subprime mortgages. Are carbon default swaps and subprime offsets next? If the Waxman-Markey climate bill is signed into law, it will generate, almost as an afterthought, a new market for carbon derivatives. That market will be vast, complicated, and dauntingly difficult to monitor. And if Washington doesn't get the rules right, it will be vulnerable to speculation and manipulation by the very same players who brought us the financial meltdown.

Cap and trade would create what Commodity Futures Trading commissioner Bart Chilton anticipates as a $2 trillion market, "the biggest of any [commodities] derivatives product in the next five years." That derivatives market will be based on two main instruments. First, there are the carbon allowance permits that form the nuts and bolts of any cap-and-trade scheme. Under cap and trade, the government would issue permits that allow companies to emit a certain amount of greenhouse gases. Companies that emit too much can buy allowances from companies that produce less than their limit. Then there are carbon offsets, which allow companies to emit greenhouse gases in excess of a federally mandated cap if they invest in a project that cuts emissions somewhere else—usually in developing countries. Polluters can pay Brazilian villagers to not cut down trees, for instance, or Filipino farmers to trap methane in pig manure.
 

In addition to trading the allowances and offsets themselves, participants in carbon markets can also deal in their derivatives—such as futures contracts to deliver a certain number of allowances at an agreed price and time. These instruments will be traded not only by polluters that need to buy credits to comply with environmental regulations, but also by financial services firms. In fact, a study (PDF) by Duke University's Nicholas Institute for Environmental Policy Solutions anticipates that if the United States passes a cap-and-trade law, the derivatives trade will probably exceed the market for the allowances themselves. "We are on the verge of creating a new trillion-dollar market in financial assets that will be securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market," says Robert Shapiro, a former undersecretary of commerce in the Clinton administration and a cofounder of the US Climate Task Force.

Banks like JPMorgan Chase, Morgan Stanley, and Goldman Sachs already have active carbon trading desks that deal in instruments connected to Europe's cap-and-trade system and voluntary markets here. But business will explode if a cap-and-trade system becomes law. So it's no surprise that the financial industry has taken an intense interest in the fine print of the Waxman-Markey bill. According to data compiled by the Center for Public Integrity, the financial services industry has 130 lobbyists working on climate issues, compared to almost none in 2003. They represent companies like Goldman Sachs, JPMorgan Chase, and AIG (before it was shamed into temporarily halting its lobbying activities last fall). The industry "wants lawmakers to create a brand-new revenue stream for its bottom line, and cap and trade would do it," says Tyson Slocum of Public Citizen, who is a member of a Commodity Futures Trading Commission (CFTC) advisory committee considering how carbon trading should be regulated.

Among environmental groups, there is, understandably, less focus on the finer points of financial regulation. "The derivatives side is not something that a person who comes to the table worried about carbon emissions has on their agenda," says Michael Greenberger, a derivatives expert at the University of Maryland who has also served in the CFTC and the Justice Department. "Those people—and they're fighting a good battle—opened the door."

Already, the industry has achieved its main objective: The Waxman-Markey bill would create a big, convoluted market for carbon derivatives. Experts from the Congressional Budget Office have said that the most stable and effective form of cap and trade would involve a system in which the government periodically sets prices in much the same way that the Fed determines interest rates. That would prevent volatility, which would in turn remove the temptation to gamble on big price swings. In other words, it would provide far less opportunity for wheeling and dealing—and profits. Rep. Jim McDermott (D-Wash.) offered a proposal for a managed-price cap-and-trade scheme, but failed to gain any traction. Meanwhile, industry groups like the International Swaps and Derivatives Association pushed for a system in which a "broad suite" of financial products can be traded, and that's what Waxman-Markey delivers.

In an especially audacious move, the industry also argued that cap and trade should allow the very same types of unregulated instruments that helped spread risk throughout the financial system like a cancer, contributing to the economic meltdown. In particular, it lobbied for "over the counter" carbon derivatives—deals conducted directly between two parties with no one monitoring the risk. (Perhaps the most notorious form of OTC derivative is the credit default swap, which crippled AIG when it issued too many high-risk swaps while lacking the money to cover them.)

On this front, however, Wall Street was less successful. The day before the bill passed out of committee, Rep. Bart Stupak (D-Mich.) inserted language requiring all allowance derivatives to be either traded on an exchange or cleared by an organization registered with the CFTC. This would provide a paper trail for regulators, although the reporting requirements for clearinghouses are less stringent than those for public exchanges. Stupak also added limits to prevent speculators from cornering too much of the market. Still, the bill leaves many vital specifics to the White House, directing the president to form a task force to determine precisely how to avoid "fraud, market manipulation and excess speculation." Andy Stevenson, finance adviser at the National Resources Defense Council, says, "I would feel comfortable if much more of it were explicit." He applauds the bill's "spirit" but cautions that "the details are important."
 

The lobbying battle is not over. Chilton, the CFTC commissioner, praised Stupak's 11th-hour amendment, but expressed concern that it could be removed in the legislative process ahead. The bill, after all, has yet to pass through several more House committees—before the Senate weighs in. That gives the financial sector a few more bites at the apple. At the same time, Wall Street is marshaling its forces against Treasury Secretary Timothy Geithner's proposal to move most derivatives trading onto public exchanges, which would also cover carbon derivatives. "There are so many issues, so many jurisdictional obstacles out there, I'm just worried it's not going to get done," Chilton says. "I don't want people's good intentions to be all we get. I'm worried that people will start clustering and positioning, and the reforms these markets require aren't going to be enacted."

Even a well-designed regulatory system may not be able to prevent gamblers from contorting prices and discouraging the investments in green energy that are the entire purpose of cap and trade. After all, one lesson to be drawn from the economic crisis is that complexity is like catnip to the unscrupulous, and the carbon regime that would be created by cap and trade is nothing if not complex.

Perhaps the biggest uncertainty hinges on how offset derivatives—such as a contract to buy offset credits at a future date for a determined price—will be monitored. This too would be left to the White House task force to figure out. It will be a tough task because the quality of offset projects is notoriously difficult to verify. Sen. Jeff Bingaman (D-N.M.) has described them as "fraught with opportunity for game playing, which will be fully exploited, I'm sure."

In 2008, the Government Accountability Office examined the use of offsets in Europe's Emissions Trading Scheme, which theoretically has a rigorous process to certify that offsets are "additional"—that is, that they cause emissions cuts that wouldn't have occurred if the project hadn't been implemented. But even though projects must be reviewed by both national officials and an external independent monitor to qualify, the GAO found that it was "nearly impossible" to ensure that offsets really were additional. It concluded that offsets present "a significant regulatory challenge" and should probably be viewed as a temporary measure at best. "In practice [offsets] have proved impossibly difficult to successfully implement without fraud," writes Michael Wara, a carbon trading lawyer and coauthor of a Stanford University study that found that one- to two-thirds of offsets authorized by the Kyoto Protocol's Clean Development Mechanism didn't represent true emissions cuts. "Even in the presence of a tough regulatory system...that is working hard to get things right...lots of counterfeit carbon currency is making it into the system."

Michelle Chan, the investment program manager for Friends of the Earth, believes that if offset derivatives aren't properly regulated, they could become "subprime carbon"—futures contracts that promise emissions reductions but fail to deliver and then collapse in value. Already, she points out, some banks are bundling credits from multiple offset projects and splitting them into tranches to sell to investors. This kind of activity is "hauntingly close" to mortgage-backed securities, Chan told the House ways and means committee in March, arguing that it has the potential to spread risk throughout the financial system. At a CFTC hearing earlier this year, Skip Hovarth, president of the Natural Gas Supply Association, questioned whether the agency had the tools and the manpower to keep track of such an incredibly complex market, adding, "If this market fails, and all the derivatives and all the markets that attach to it that grow over time fail, it will make this last recession look like nothing.

Again, Europe's experience offers a glimpse of the difficulties of tethering an environmental goal to the whims of the financial system. In the early years of Europe's cap-and-trade system, speculators flocked to trade carbon. Prices seesawed wildly, and analysts warned of a "carbon bubble." Regulators made adjustments to stabilize the market—but then the financial crisis hit and carbon prices crashed. This January, an executive from the French energy giant EDF warned that carbon trading was in danger of becoming "a new type of subprime tool which will be diverted from what is its initial purpose: to encourage real investment in real low-carbon technology."

During the negotiations over cap and trade, little airtime has been given to the idea that perhaps carbon is fundamentally different from other purely commercial markets that weren't conjured into existence to save the planet. After all, the allowances are an artificial commodity—according to the logic of cap and trade, the government will issue fewer permits each year to encourage polluters to cut their emissions. "The supply is dwindling and will tail off—arguably it's much less clear that you need a derivatives market," says Greenberger, the derivatives expert. "You could try to control speculation, which is what Stupak wants to do—but even in a regulated market there are speculators, many of them. Or you could say, 'This is unlike any other market, and no regulation is perfect. So why take even the risk of speculation or malpractice that could distort the price—let's just not have derivatives.' I think it's a subject worthy of serious debate." Thanks to the persistent lobbying of the financial sector, however, that doesn't seem to be a debate that will happen anytime soon.