The Kyoto Protocol (named after the Japanese city in which it was drafted) is a 1997 liberal treaty backed by the United Nations concerning greenhouse gas emissions. It commits 39 participating industrial nations to a combined 5% reduction (from 1990 levels) in climate-damaging emission by the year 2012.
The stated goal of the treaty is to reduce greenhouse gas emissions in the signed countries, which supporters say is crucially needed to prevent a global environmental tragedy. Opponents of the treaty argue that ratifying the treaty would greatly harm many US industries while ignoring other high polluting, developing nations such as China and India. For these reasons, the United States, while it negotiated the treaty during the Clinton administration, has only signed the protocol, but has adamantly refused to ratify it. The Senate voted 95-0 not even to bring ratification up for a vote.
The Kyoto Protocol became effective on February 16, 2005, requiring the European Union to reduce its average emissions between the years 2008 and 2012 by 8% relative to 1990 levels.
An internal Enron memo says the treaty will, "do more to promote Enron's business than will almost any other regulatory initiative outside of restructuring the energy and natural gas industries in Europe and the United States." Lay told Enron employees Bill Clinton solicited Lay's views "in advance of a climate treaty to be negotiated at an international conference" And Lay said Clinton agreed to support Lay's proposal of a carbon emissions trading exchange from which Enron planned to profit hugely while American consumers paid steep price increases for electricity and natural gas.
The Republican Senate rejected the Kyoto treaty by a 95-to-0 vote on August 15, 1997.
Cap and trade
- Main article: Cap and trade
Even after the U.S. withdrew from the Kyoto protocols, Enron continued to push for a domestic regulatory scheme known as cap-and-trade, whereby the government would set a cap on the total amount of carbon dioxide emissions allowed in the U.S. It would distribute permits or allowances to companies affected by the cap giving them the right to emit a certain amount of carbon dioxide. Those allowances could then be traded on a carbon emissions trading exchange.
Enron executives believed that a cap-and-trade program would put them in a position to dominate the U.S. energy market. Electric utilities, required to reduce emissions of carbon dioxide, would be forced to switch from coal to natural gas as the only practical alternative to electricity production. As a leading trader of natural gas, Enron would be the recipient of a huge financial windfall.
While Barack Obama served as a board member for the Chicago-based Joyce Foundation, it gave nearly $1.1 million to start the Chicago Climate Exchange, calling itself "North America's only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide." In 2010, the Chicago Climate Exchange collapsed. As many investors were wiped out, its founder sold out before hand for $90 million and Al Gore, who was also associated by name with the company, pocketed $18 million.
- USA Today, Kyoto Era Begins.
- Robert Schlesinger, "Enron Ties May Also Tar Democrats; Company Lobbied Clinton, Donated To Top Legislators," The Boston Globe, January 24, 2002
- Obama Years Ago Helped Fund Carbon Program He Is Now Pushing Through Congress, By Ed Barnes, March 25, 2009. FoxNews.com
- Collapse of Chicago Climate Exchange Means a Strategy Shift on Global Warming Curbs, By Ed Barnes, November 09, 2010, FoxNews.com