Remember the big “acid rain” scare during the 1970s and 1980s attributing damage to lakes and forests to emissions from Midwestern utilities? If so, did you ever hear the results of a more than half-billion-dollar, 10-year-long national Acid Precipitation Assessment Program study that was initiated in 1980 to research the matter?

Probably not.

As it turned out, those widespread fears proved to be largely unfounded, since only one species of tree at a high elevation suffered any notable effect, and acidity in lakes was traced to natural causes. The investigating scientists reported that they had “turned up no smoking gun; that the problem is far more complicated than it been thought; that other factors combine to harm trees; and that sorting out the cause-and-effect was difficult and in some cases impossible.”

Robert Bruck, a North Carolina State University plant pathologist who worked on the project, observed: “if you're environmentally oriented, you going to find things to be concerned about; if you're one who finds no reason to get excited, you'll find much to support that too.”

Although the Reagan-Bush administration refused to sponsor any acid rain legislation before the results were in, the regulatory groundwork had already been established through the EPA to avoid letting a perfectly good crisis go to waste.

Senator John Heinz (R–PA) and Timothy Wirth (D-CO) had previously cosponsored a “Project 88” to provide a pathway for converting environmental issues into business opportunities. That media-fueled alarm about acid rain provided a great basis for new “allowance trading” legislation to create markets for buying and selling excess sulfur dioxide (SO 2 ) credits. Project 88 became the Clean Air Act of 1990.

Carbon-Capping Cronies: Enron, Al Gore and Friends

One of the big traders in the SO2 allowance market was Enron. Back at that time in the 1990s the company was diversifying its energy business, and already owned the largest natural gas pipeline that existed outside of Russia, a colossal interstate network. However natural was having difficulties competing with coal.

The hype about global warming which had been ginned up by then-Senator Al Gore’s famous 1988 congressional hearings on the matter provided what Enron recognized as a dream opportunity. After all, since a cap-and-trade market had been established for SO 2 , why not do the same for CO 2 which was already being blamed for a climate crisis? Natural gas was a lower CO 2 -emitter than coal. Besides, they knew exactly where to go in Washington to get some help.

Enron’s CEO Ken Lay had met with President Clinton and Vice President Gore in the White House on August 4, 1997 to prepare a strategy for the upcoming Kyoto conference in December. Kyoto was the first step toward creating a carbon market that Enron desperately wanted Congress to support.

But there was one very pesky problem. Unlike SO 2 which really does produce unhealthy smog, CO 2 wasn’t a pollutant…at least not yet…and therefore EPA had no authority to regulate it. So after Al Gore’s Senate pal Timothy Wirth was appointed to become undersecretary of state for global affairs in the Clinton-Gore administration, Enron’s boss Lay began working closely with him to lobby Congress to grant EPA necessary CO 2 regulatory authority plus also gain public support for the U.N.’s Kyoto Protocol initiative.

And lobby they did. Between 1994 and 1996 the Enron Foundation contributed nearly $1 million to the Nature Conservancy, and together with the Pew Center and the Heinz Foundation they engaged in an energetic and successful global warming fear campaign which included attacks on scientific dissenters. Incidentally, the Heinz Foundation, headed by Teresa Heinz Kerry, generously provided a $250,000 award to Al Gore's star congressional hearing witness, NASA’s James Hansen, who subsequently went on public record supporting her new husband John Kerry’s failed presidential bid.

An internal Enron memorandum stated that Kyoto would “do more to promote Enron's business than almost any other regulatory initiative outside the restructuring [of] the energy and natural gas industries in Europe and the United States."

The rest, as they say, is history. Al Gore and his partner David Blood, the former chief of Goldman Sachs Asset Management (GSAM) took big stakes in the Chicago Climate Exchange (CCX) which was poised to make windfall profits selling CO 2 offsets if and when cap-and-trade was passed in Congress. Speaking before a 2007 Joint House Hearing of the Energy Science Committee, Gore told members: “As soon as carbon has a price, you’re going to see a wave [of investment] in it…There will be unchained investment.”

Thanks to a 2010 Republican mid-term House cleaning that didn’t occur.