Apr 3 - McClatchy-Tribune Regional News - Peter B. Lord The Providence Journal, R.I.

In the 1980s, acid rain was an alarming environmental problem brought under control in part by giving businesses incentives to reduce their air emissions. Now, a Chicago firm is gambling millions of dollars on the theory that a similar program could let businesses solve the climate-change challenge.

Richard L. Sandor, founder and head of the Chicago Climate Exchange, a company that allows businesses to buy and sell credits for carbon emissions, told a packed room of the state's business, environmental and political leaders Monday night that markets could solve climate change as well as social and environmental problems.

"Debating climate change is no longer relevant," Sandor said. "It shouldn't even be discussed. The question is how to make jobs and wealth -- to let the markets work. This is important to me as a parent and grandparent. And it's not an incomprehensible problem. The answers are already here."

As he spoke to about 170 people at Save the Bay headquarters at Fields Point, Sandor pointed toward Narragansett Bay and said it was important to see that resource protected and preserved for future generations -- not damaged by climate change and rising sea levels.

The unusual business and environmental event was organized by state Treasurer Frank T. Caprio and his staff. Caprio said he got the idea when he attended a climate-change conference at the United Nations. The Rhode Island conference, he said, was made possible by Sandor's agreeing to come here.

Caprio said that much as he moved last year to shift state pension investment funds out of securities backed by subprime mortgages, he is now having his staff review whether state investments could be affected by climate change.

He encouraged local business leaders to do all they can to operate in a "green way."

"This is our chance to be a leader in the new economy," Caprio said.

Mindy Lubber, president of Ceres, a coalition of investors and environmental leaders working to improve corporate environmental, social and governance practices, also addressed the group. She voiced both optimism and pessimism about solving climate change, calling it "one of the great crises of our time."

She said that last year's World Economic Forum in Davos, Switzerland, was like a Greenpeace environmental activist group conference because such issues were so prominent. She said the world of finance and economics is starting to "get" climate change and that if a carbon tax is put in place soon, it can have a big impact.

But on the other hand, she said, China plans to build 436 coal-fired power plants in the next few years, and India has plans for 162 coal plants.

"The good news is there is action and we're seeing it every day," Lubber said. "The bad news is we are still acting with small steps."

She said the only way to get China and India to change is to have the United States act and develop technological solutions.

Sandor described his own view of the different eras in wealth creation in the United States since World War II.

First, he said, wealth was created by manufacturing. But in the 1970s, more wealth was created by selling commodities such as oil and grain.

In the 1980s, mortgages became a valuable commodity as home ownership rose to 68 percent of the population.

In the 1990s, Sandor said, information became a commodity, and the developers of Google and other information sites made fortunes.

He said it was clear to him that the next industrial era will be centered around the commoditization of air and water as the government puts a tax on carbon emissions and clean water becomes more scarce.

Sandor said he got a $1.2-million grant to start the carbon market and then saw a seemingly endless series of setbacks: The United States refused to ratify the Kyoto Protocol on climate change, the 9/11 terrorist attack, the Afghan war, the Iraq war and now a recession.

More investors were sought, Sandor said. Gradually, in the absence of any regulatory mandates, the exchange signed up more and more corporate members pledging to reduce their carbon emissions by 6 percent by 2010.

The world changed, he said, on Super Tuesday, when three leading candidates for president were identified and all three had pledged to regulate carbon emissions with a cap and trade system ---- probably one that would establish a limit on emissions and allow for a market for efficient companies to sell "carbon credits" to companies having trouble reducing their emissions.

Sandor said the price of carbon tripled after Super Tuesday, as companies sought to take early action before regulations are imposed.

"We believe that ultimately emissions trading will evolve much like cotton trading in the 19th century," Sandor said. "There will be a national system in the U.S."

"We will have five million green jobs," said Sandor. "With Rhode Island's colleges and universities and its history, it should be in a good position to take on green technology."

Near the end of the evening, Caprio pledged to organize more conferences for the business community.

And Michael F. Ryan, president of the Rhode Island distribution company for electricity and natural-gas utility National Grid and a former top staffer for the late Sen. John H. Chafee, an early advocate for tackling climate change, offered this observation:

"If John Chafee were here today, he'd be so proud of what is happening."