Carbon Credits - A new American game

First the US refused to sign the Kyoto Protocol, an international agreement that seeks to limit world greenhouse gas emissions to slow down global warning.

Next they came up with this bill HR2454: American Clean Energy and Security Act 2009, which was passed by the US House of Representatives on June 26 and was sent to the Senate to be debated and voted on.

Under the pretext : "To create clean energy jobs, achieve energy independence, reduce global warming pollution and transmission to clean energy economy", Obama has given licenses to industries to pollute. Upon passing the bill, limits will be imposed on industries to cap the amount of carbon and other greenhouse gases emission that they can produce per year. The beautiful part of the bill is that when companies have exceeded their limits, they can buy sufficient carbon credits from other companies to keep their industries running and producing more pollutions. No closing down, no expenditure to reduce pollution, no need to carry out research in pollution reduction, just go to the Chicago Climate Exchange to purchase sufficient carbon credits. Treat this extra cost as one of the production costs and pass it to the consumers. All industries in US now have licenses to pollute openly. No body can question why the American don't sign the Kyoto Protocol anymore. The industries don't pay for the cost of purchasing credits, the consumers that breath the polluted air pay for it.

Once the bill is passed, activities in the Chicago Climate Exchange (CCX) that trade in six greenhouse gases and Chicago Climate Future Exchange (CCFE) that trade derivatives on emission allowances (a virtual thing to me) are expected to pick up. Remember how the commodity bubble burst in 2008 and how crude oil that dropped from $US145 to $US33 within 6 months, this coming virtual commodity bubble can be worst.