A SHOCKER! – Installment 13 – June 05, 2008

Posted on June 5, 2008. Filed under: Uncategorized |

Richard L. Sandor is chairman and CEO of the Chicago Climate Exchange (CCX), the world’s first and North America’s only voluntary, legally binding integrated greenhouse gas emissions reduction registry and trading system. Dr. Sandor is also a research professor at the Kellogg Graduate School of Management at Northwestern University and a Member of the International Advisory Council of Guanghua School of Management at Peking University. While on sabbatical from the University of California, Berkeley in the early 1970s he served as Vice President and chief economist of the Chicago Board of Trade (CBOT). It was at that time that he earned the reputation as the principal architect of the interest-rate futures market. Richard L. Sandor was honored by the City of Chicago and the Chicago Board of Trade for his contribution to the creation of financial futures and his universal recognition as the “father of financial futures”. In October 2007, Dr. Sandor was honored as one of TIME Magazine’s “Heroes of the Environment” for his work as the “Father of Carbon of Trading.” http://www.chicagoclimatex.com/content.jsf?id=122 Chicago Climate Exchange Web Site

Notice that he is involved with Peking University, which is located in Beijing, China, the same university where Maurice Strong is operating. Dr. Sandor is also a member of the design committee of the Dow Jones Sustainability Index. He has a history of creating trading exchanges to buy and sell intangibles – in this case, thin air.

BNET, the go-to place for management at:


Sandor would continue to write new contracts for the CBOT adding 10-year notes and options on Treasuries in the early 1980s. He credits the leadership of then-CBOT Chairman Les Rosenthal with bringing innovations to market.

“We tried to develop as many new products because [Rosenthal] was very innovative and he was willing to lead the charge, knew what it took to make new markets, was very involved in structuring associated memberships and commodity options. If Les hadn’t provided an open canvas for me I couldn’t have done a lot of the things that I get credited for. We put as much in as we could while he was chairman.”

In the Wall Street Journal at http://online.wsj.com/article/SB120535230851631199.html?mod=%2528_pageid_%252…, by Leila Abboud, March 13, 2008, Page A1, Pollution Market Seen as Test for U.S.; One ‘Surreal ‘ Fall
CARBON KING – Economist Strikes Gold in Climate-Change Fight

His company, London-based Climate Exchange PLC, has carved out a key role in Europe’s booming trade in “carbon permits” — essentially, buying and selling the right to pollute. Since 2005, the European Union has required major polluters to either cut the amount of carbon dioxide they spew, or buy pollution credits in the open market.

Justin Steele
Richard Sandor at his Chicago office in May 2006.

A big chunk of the action occurs on an exchange founded by Mr. Sandor, a one-time Berkeley professor who has morphed into a gregarious climate-change entrepreneur.

He’s among the most successful investors trying to profit from rising environmental awareness, whether by speculating in energy commodities or launching wind-power companies. Last year, the total value of carbon permits changing hands — whether on public exchanges or in private, off-market transactions, where most still occur — nearly doubled to €40 billion, or about $60 billion, according to Oslo-based Point Carbon, a market research firm.

Yesterday, Climate Exchange’s stock jumped 16% after the firm reported a tripling in 2007 revenue to £13.6 million, or about $27 million. That gives the company, which handles about 90% of the trading on carbon exchanges, a market capitalization of roughly $1.31 billion. Mr. Sandor’s 20% stake is worth more than $260 million on paper.

The next big battlefield will be in the U.S., where Congress is currently debating setting up a system for regulating greenhouse-gas emissions. Lawmakers are considering a system like the one created by the 1997 Kyoto Protocol, a global United Nations-sponsored accord that set emissions-cutting targets for the 175 nations that ratified it. Europe’s program was an early test run of the Kyoto Protocol, whose emission restrictions began hitting industry this year.

The U.S. hasn’t ratified Kyoto. But all three leading Democratic and Republican presidential candidates say they want the U.S. to do more to fight climate change, and would likely set up a carbon-trading program.

Carbon permits are traded much like physical commodities — gold, oil or pork bellies. Each government-issued permit grants its holder permission to emit a ton of carbon dioxide into the air. Carbon Exchange makes money by taking a commission on each trade and by charging membership fees.

Last month, a report by the Congress
ional Budget Office said a carbon tax could achieve the same emissions reductions “at a fraction of the cost” of a cap-and-trade system.
The savings stem partly from the fact that such a policy is simpler to implement than building a carbon market.

Other criticisms of carbon trading focus on the financial wizards — such as Mr. Sandor — who design and run the markets. “Financial resources are being redistributed to the banks and traders rather than paying for technological innovations to cut emissions,” says Carlo Stagnaro of the Italy-based economic think tank Istituto Bruno Leoni, who just published a paper on the European Union’s emissions-trading system.

Europe’s own system shows evidence of these strains. Governments there initially yielded to industry pressure and allocated too many carbon permits, giving companies little immediate incentive to cut their emissions.

The system, which has been up and running only three years in Europe, hasn’t yet produced big reductions in emissions. But carbon trading has boomed — handing a tidy profit to banks, traders and exchanges such as the one founded by Mr. Sandor. Power companies and heavy industry trade carbon continuously to try to make money off price fluctuations and to hedge their future risk, as well as to comply with Kyoto rules.

“I am a capitalist who runs a business and has to deliver value to shareholders,” he said during a recent interview at the Ritz Hotel in London. “I consider myself to be an environmentalist, but I divorce those sentiments from my day job.” said Richard Sandor during an interview at the Ritz Hotel in London.

He first envisioned a carbon market long before many people had heard of global warming. In 1992 at the United Nations Earth Summit in Rio de Janeiro, he presented an academic paper on how markets might be used to reduce carbon emissions.

Of the conference, Mr. Sandor recalls: “There was more tie-dye there than at a Grateful Dead concert. It felt like a movement.” Indeed, the event laid the groundwork for what eventually became the 1997 Kyoto Protocol.

It was in Brazil, eating shrimp and sipping a caipirinha on the beach, that Mr. Sandor says he first thought about setting up his own carbon market. “I know how to pioneer new markets,” he recalls thinking. “I’ve done it before.”

He assumed the U.S. would sign on, too, so he founded the Chicago Climate Exchange in anticipation of a U.S. carbon-trading boom. However, soon after taking office, the Bush administration declined to ratify Kyoto, arguing it would hurt U.S. companies’ competitiveness because developing countries like China and India weren’t required to curb emissions.

Mr. Sandor’s dream fizzled. With no treaty, U.S. companies wouldn’t be required to cut carbon emissions. He was left with a company that basically had little reason to exist.

But rather than dumping it, he decided to convert the Chicago Climate Exchange into a system that companies could join to voluntarily reduce their emissions.



Statement to the U.S. Senate Committee on Environment and Public Works; Subcommittee on Clean Air, Wetlands and Climate Change by Dr. Richard Sandor, Chairman and CEO Environmental Financial Products LLC

Tuesday, January 29 2002

High-Level CCX Advisory Board

The Hon. Richard M. Daley, Mayor of the City of Chicago, accepted the invitation to become the Honorary Chairman of the CCX. A high-level Advisory Board has been formed to receive strategic input from top world experts from the environmental, business, academic and policy-making communities. Members of the Board include internationally recognized environmental leaders such as Maurice Strong and Israel Klabin, former governors of U.S. states (James Thompson and David Boren), and individuals who have served in senior positions in major businesses and academic institutions, such as Donald Jacobs and Jeffrey Garten. The dignitaries serving on this Board can help inform corporate and governmental decision-makers and contribute to the formation of a robust group of CCX market participants. Appendix B provides a brief biographical summary of each of the individuals who have agreed to serve on the CCX Advisory Board.

There’s an article wroth reading at http://www.larouchepub.com/other/2007/3413carbon_swindle.html

Richard Sandor, Maurice Strong, Al Gore and all the others have spotted the money pot and quickly attached their personal spigots to drain the barrell (read world businesses and tax-payers.)

Tell your elected representatives not to support “Cap and Trade” because you oppose the redistribution of billions of our dollars to their bank accounts.

There is no more time to do nothing.



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