What's the deal with carbon trading?

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Josh Clark: Hey, and welcome to the podcast. I'm Josh Clark. There's Chuck Bryant. He's giving a little salute.

Chuck Bryant: I did.

Josh Clark: That was good.

Chuck Bryant: Stuff you should know army, sir, reporting for duty.

Josh Clark: I need a beer and a cigar.

Chuck Bryant: Yes.

Josh Clark: Yeah. Chuck, how are you doing?

Chuck Bryant: What? Like Castro?

Josh Clark: Yeah.

Chuck Bryant: Okay, thanks.

Josh Clark: You know me way too well.

Chuck Bryant: Yes, I'm doing great, Josh. You?

Josh Clark: I'm great, Chuck.

Chuck Bryant: On with the show, what's your witty setup here?

Josh Clark: I don't have a witty setup. It's more of a depressing setup.

Chuck Bryant: All right. Let's hear it.

Josh Clark: Obama finally conceded that the energy bill that Congress is going to pass under his first year or so of the administration is not going to have cap-and-trade segment to it.

Chuck Bryant: No.

Josh Clark: No, it was going to. The House passed something with it. The Senate is like no, we're not going to. We just don't want to. We're not going to. It's not that there's anything wrong with it, but we're the Senate, so nothing's ever going to escape. It's like the black hole of legislation.

Chuck Bryant: Right.

Josh Clark: Nothing can escape it, you know.

Chuck Bryant: Uh-huh.

Josh Clark: So cap-and-trade is dead. And that's really sad, as we'll see because it can be beneficial.

Chuck Bryant: Sure.

Josh Clark: At least in theory.

Chuck Bryant: Yeah, yeah.

Josh Clark: And as a result, all of these voluntary initiatives, because it was going to be a mandatory cap-and-trade.

Chuck Bryant: Right.

Josh Clark: Setup for the United States, a bunch of voluntary stuff, specifically out west, there was a regional cap-and-trade scheme that was going on, or about to go on. And the whole thing was proposed and underwritten by Arizona as its greatest champion. And now that the Senate is like no, we're not passing this; Arizona is like by the way, we don't really want to do this.

Chuck Bryant: Really? The voluntary one?

Josh Clark: So it's falling apart. There's a bunch of them falling apart. It looks like the only one that's new, that hasn't been set up yet, that's still going forward, is California.

Chuck Bryant: Well, of course.

Josh Clark: Yeah.

Chuck Bryant: Wow, that's disappointing.

Josh Clark: It is. And do you think we should let everybody in on what cap-and-trade scheme means?

Chuck Bryant: Yes, Josh, we're talking about carbon. And it's basically a way to regulate carbon emissions.

Josh Clark: Yeah.

Chuck Bryant: Through a market-based, much like any market-based thing, like the stock market, except its limiting carbon emissions. So what you do is you set a cap. That's the cap part.

Josh Clark: Right.

Chuck Bryant: Which is the limit of emission you're allowed to emit, as a factory, let's say. And then the trade part comes in because you can, if you don't use all of your emissions credits, let's say, you can bank them or you can trade them and sell them with your factory buddies.

Josh Clark: Right.

Chuck Bryant: Is that a good way to say it?

Josh Clark: That's exactly, that's perfect. As a matter of fact, (clap, clap), Chuck Bryant, everybody!

Chuck Bryant: Salute.

Josh Clark: There's a regional cap-and-trade scheme up in the Northeast, that's been fairly successful so far.

Chuck Bryant: The Chicago one?

Josh Clark: No, the Northeastern states, like in New England, among, I think, electrical utilities. And it's voluntary. And basically you have a body that's governing this. And then they say - they set a cap, like you said. And let's just pull a number out of the air. They can, all of the people who are members of this, all of the electrical companies that are members of this, combined, are allowed to emit 100 million metric tons of carbon dioxide next year.

Chuck Bryant: Right and you're just making up that number, right?

Josh Clark: Pulling it out of the air. And then you create these credits, right, that are slices of that, tranches of it. So let's say each tranche is 100, that means there's 1 million credits out there available for everybody. And let's say they're distributed evenly, maybe, at first. But then factory A puts out - and there' s ten factories, so each one can put out 10 million metric tons of CO2 next year.

Chuck Bryant: Okay.

Josh Clark: Then factory A says okay, we're accidentally putting out 11 million. Factory B, we notice that you're on track to put out 8 million. That means that you have two extra credits. Can we buy one of those from you?

Chuck Bryant: Boom, done.

Josh Clark: Done, so these things now have a value, a money value. And there is a penalty for going over, which should be more than the credit is.

Chuck Bryant: Right.

Josh Clark: Right?

Chuck Bryant: Otherwise there would be no incentive.

Josh Clark: Right.

Chuck Bryant: To stay under.

Josh Clark: Right.

Chuck Bryant: Yes, very well said.

Josh Clark: Yes.

Chuck Bryant: So that is a cap-and-trade scheme.

Josh Clark: And they are in existence.

Chuck Bryant: And scheme just sounds negative because the Ponzi thing and scheme just sounds - they should change the name. It has a negative connotation.

Josh Clark: It definitely does. And I can't help but think that there are people out there that are like oh, I don't want a cap-and-trade scheme. Don't really know about it.

Chuck Bryant: Exactly. That's just the word for it, though. It's not bad.

Josh Clark: There is actually a scheme in Europe that's fairly vital, heavily criticized, but still also, it's the first mandatory one, I think, in the world.

Chuck Bryant: Right.

Josh Clark: It was born out of the Kyoto Treaty, right?

Chuck Bryant: Yes, the ETS, European Trading Scheme is like you said, born out of the Kyoto Protocol, which does not tell people; tell participating countries how to participate. They just have to meet the standards.

Josh Clark: Right.

Chuck Bryant: So Europe, the EU came up with the ETS and it includes 12,000 factories and utilities in 25 different countries. And each member state, I thought this was odd, sets its own emissions cap, based on the Kyoto Protocol.

Josh Clark: Right.

Chuck Bryant: Which we are not a member of.

Josh Clark: No we're not. I'm like what's the Kyoto Protocol. This is the first time I've heard of this thing.

Chuck Bryant: That's not true. You've heard.

Josh Clark: Okay.

Chuck Bryant: Yeah, but although we helped draw it up, the Clinton Administration did.

Josh Clark: Yes, and then it was scuttled when it came - before it came into effect in 2005, by the Bush Administration.

Chuck Bryant: Right, because of fears that it would A, that it wasn't properly put together to begin with, and B, that the financial impact might harm America's economy.

Josh Clark: Well plus, also, it divided countries by annex one and annex two, annex one being industrialized nations and annex two being developing economies.

Chuck Bryant: Right.

Josh Clark: The problem is two of the world's biggest developing economies; India and China are also two of the world's biggest polluters, as far as CO2 emissions goes. And that was one of the problems that the United States had with the Kyoto Treaty is that it didn't put heavy enough sanctions on those developing countries.

Chuck Bryant: Because they're not required to meet the same standards.

Josh Clark: No.

Chuck Bryant: And that makes sense.

Josh Clark: It does make sense. And there's a certain amount of hey, we already screwed up the world, but we learned from it. So now you can't build your economy by screwing up the world because we've already learned the lesson the hard way. Even though we wouldn't be in this mess if we hadn't already screwed up the world, but you can't do the same thing we did.

Chuck Bryant: Right.

Josh Clark: So there's a certain amount of that. But at the same time, there's also a certain amount of okay, we need to remain competitive in the global marketplace. And one of the things, well the whole point of carbon tax is to make it harder to emit or to make economic sanctions on emissions. So that means that there's an extra cost that American companies have to bear that companies operating in China or India don't have to.

Chuck Bryant: That's not a carbon tax though. That's different than carbon trading, right?

Josh Clark: No, carbon tax is just straight up, you put X number of emissions out, you pay X number of dollars on those emissions.

Chuck Bryant: Okay.

Josh Clark: So there is an incentive to reduce your emissions because you're paying a lower tax. But both of them are de facto taxes on pollution.

Chuck Bryant: Right. So we were talking about the ETS.

Josh Clark: Sorry.

Chuck Bryant: The European Trading Scheme.

Josh Clark: Yeah, yeah.

Chuck Bryant: You were saying that it was controversial. And one of the reasons it was controversial is because they - the government can allocate, kind of at will it seems like, so preferred industries, maybe, might get some free credits if they're inching up toward their limit, their cap limit, and basically they call it a permit to pollute.

Josh Clark: Right and it exempts those industries, those favorite industries, or the ones that have the best lobbyists.

Chuck Bryant: So that's no good. Like everything, it gets tainted.

Josh Clark: Right and it's also there is a market over there. You can buy carbon credits from the ETS, just as a speculator. But it's mandatory, which takes a certain amount of market fluctuations or market base out of the whole thing, the whole equation.

Chuck Bryant: Right, the mandatory participation.

Josh Clark: Yeah.

Chuck Bryant: Right, right.

Josh Clark: So if you have a voluntary participation trading scheme, cap-and-trade scheme, you would think that based on Adam Smith's theories, this thing would be flawless, right? Where would you find such a thing?

Chuck Bryant: In the United States.

Josh Clark: Yes, you would.

Chuck Bryant: Yeah, since we're not a member of the Kyoto Protocol, I almost called it the Pyoto krotocol. I think that's what we should call it. That's what we have here now. We didn't participate, officially, but I think 130 mayors, across the country, implemented their own programs in their city that met the similar standards as the Kyoto.

Josh Clark: Which is as heartwarming as moose playing in the sprinkler?

Chuck Bryant: Yes, it is, evidently.

Josh Clark: Yeah.

Chuck Bryant: So that's good though, 'cause we're getting with the program anyway.

Josh Clark: Right, we're on the money.

Chuck Bryant: You wrote about the Chicago Climate Exchange. Is that right?

Josh Clark: Yeah.

Chuck Bryant: Tell me about that one.

Josh Clark: So there's a guy named Dr. Richard Sandor. And I believe he's an economist. He's out of Chicago. I know that much. And in 2005, he founded something called the Chicago Climate Exchange.

Chuck Bryant: Yeah, the CCX.

Josh Clark: Right. And it functions exactly like a stock market does. Actually, that's not true. It functions more like a commodities market does.

Chuck Bryant: Right, right.

Josh Clark: So pork belly futures or oil or gold or something, but what they trade on the Chicago Climate Exchange are carbon credits.

Chuck Bryant: Yes, but it's still legally - it's voluntary, but it's still legally binding.

Josh Clark: Right. When you sign up as a company, on CCX, what you're saying is I agree to reduce my carbon emission by X amount. And if I don't, there's actually a huge penalty for it.

Chuck Bryant: Really?

Josh Clark: Five grand per metric ton.

Chuck Bryant: Wow, that adds up, too.

Josh Clark: Yeah, it does, real quick, and it is legally binding. So the CCX can levy these really stiff penalties for people who don't meet their quotas. Now, on the CCX, what they trade are carbon credits. So on any given day, they're like maybe three, four bucks. I don't know what they're up to these days. I know the ones in Europe, since it's mandatory; they're usually about ten times higher, ten times higher in value than the ones in Chicago. But let's say four bucks for 100 metric tons of CO2 emissions.

Chuck Bryant: Right.

Josh Clark: Right? So just like what we were talking about before, a company who is going to emit more can buy these credits so that they don't have to pay these stiff fines. But they have to buy credits, say, from somebody who - another company who is coming in under.

Chuck Bryant: Who is under, right?

Josh Clark: So the other company is provided a financial incentive for lowering their emissions, in the form of these credits, right?

Chuck Bryant: Right.

Josh Clark: And then the company who is going over is being penalized.

Chuck Bryant: Right.

Josh Clark: In the form of these credits, right?

Chuck Bryant: Yeah.

Josh Clark: You can also earn more credits, not necessarily just by buying some from somebody else, but by funding projects that actually reduce carbon, right?

Chuck Bryant: Yes.

Josh Clark: As long as they're verified.

Chuck Bryant: Yes, and you can actually do that in the ETS, as well. You can earn credits through two Kyoto mechanisms. The clean development mechanisms, that allows you to help out poor annex two countries that can't afford their own, reduce their own carbon output. And then joint implementation is when you can partner with other in annex one countries, which I guess that's a good thing too.

Josh Clark: Well yeah, either way, as long as you're reducing CO2.

Chuck Bryant: Sure.

Josh Clark: One of the very distinct aspects of reducing greenhouse gases and CO2 is that no matter where you do it, you're affecting everything.

Chuck Bryant: Yeah.

Josh Clark: So planting trees in Sudan or something will, ultimately, have an effect for the rest of the planet, right?

Chuck Bryant: Yeah, a lot of companies offer that now, as part of like I know certain airlines and airline websites will offer an extra, if you want to pay an extra $10.00 on your ticket, they'll plant ten trees for you in some other country.

Josh Clark: Right.

Chuck Bryant: So that's kind of nice, in a way.

Josh Clark: It is nice. Are you ready to talk about that?

Chuck Bryant: Yeah, are we - yeah, we might as well.

Josh Clark: Let me correct myself. The CCX was founded in 2003, not 2005.

Chuck Bryant: Yeah, you know what, let me go ahead and throw out a state since we're still on CCX. They traded, about four years ago, a total of 10.2 million tons of CO2.

Josh Clark: And Chuck, also, the value went from next to nothing, a couple of years ago, to, I think, as much as $100 million. The carbon market itself, I think, generated about $30 billion in 2007.

Chuck Bryant: Holy cow.

Josh Clark: And what we're talking about is something that doesn't exist. It's a reduction. They represent a reduction in CO2.

Chuck Bryant: Yeah, it's sort of hard to wrap your head around that.

Josh Clark: It definitely is, and it actually, it can work.

Chuck Bryant: Yes.

Josh Clark: Right? There's a model that's very similar. Do you remember, Chuck, when we were younger, acid rain?

Chuck Bryant: Oh yeah.

Josh Clark: Whatever happened to acid rain?

Chuck Bryant: I know. The fears of schoolchildren everywhere to go outside and our skin would melt in the rain.

Josh Clark: Yeah, it was the communists, AIDS and acid rain.

Chuck Bryant: Yeah, the big three.

Josh Clark: We had a really rough childhood, didn't we?

Chuck Bryant: Yeah, we did.

Josh Clark: But acid rain, you never hear about it any more. And the reason why is because the U.S. Government actually instituted a mandatory cap-and-trade scheme on methane emissions. Isn't that what it was that caused acid rain?

Chuck Bryant: Sulfur dioxide.

Josh Clark: That's right.

Chuck Bryant: So close. So the acid rain program, Josh, yes, limits sulfur dioxide that powers plants here in the states. And it has worked to the tune of emissions have dropped 50 percent below what they were in 1980.

Josh Clark: Yeah.

Chuck Bryant: Not bad.

Josh Clark: No, not at all, and they did it slightly differently. They put a cap on. They divided it amongst emitters of sulfur dioxide, which I think are, again, electrical plants or power plants are the worst emitters for it. And they said here are your allowances. Don't go over. And if you do, you're in big trouble. And then each year, they'd revise the cap, lower, lower, or maybe every couple of years. And that's the whole point. I don't think we talked about that. The point of the cap-and-trade scheme is that you don't just put the cap somewhere and leave it there.

Chuck Bryant: Yeah, it should go down.

Josh Clark: It should eventually go down, with a moderate pace.

Chuck Bryant: Right.

Josh Clark: Because you don't want to go too far down, or else the economy is going to be crippled.

Chuck Bryant: Right, right.

Josh Clark: You don't want it to be too high, or else there's not going to be any point to it.

Chuck Bryant: Yeah, exactly.

Josh Clark: But you do want to raise it, systematically.

Chuck Bryant: Which is actually lowering it?

Josh Clark: Lowering it, systematically, over time.

Chuck Bryant: Yes.

Josh Clark: So Chuck, have you noticed that the carbon credits we're talking about sound an awful lot like something else called carbon offsets?

Chuck Bryant: Yes.

Josh Clark: I said that you and I can go on to the Chicago Climate Exchange.

Chuck Bryant: Uh-huh.

Josh Clark: And buy carbon.

Chuck Bryant: Right.

Josh Clark: 100 metric tons of carbon, if we want, for like four bucks, I think, a pop.

Chuck Bryant: Okay.

Josh Clark: You can also find a broker and say I want to buy a carbon offset. And what do you get for that, Chuck?

Chuck Bryant: Well these are pretty popular now. What you get when you buy a carbon offset, let's say Al Gore made the headlines a few years ago, Mr. Green, Al Gore, who I love, and you do as well.

Josh Clark: Eh.

Chuck Bryant: He was under fire because of the amount of energy his large house in Tennessee consumed, which was a lot.

Josh Clark: Yeah, right after Inconvenient Truth came out.

Chuck Bryant: Exactly.

Josh Clark: I think Drudge Report broke like his electric bill or something like that.

Chuck Bryant: Did they? Right, so they kind of held his feet to the fire and he said no, I purchase - wait, that was my Clinton.

Josh Clark: Good enough.

Chuck Bryant: He purchases -

Josh Clark: Wait, can you do a Gore, because if so, I do want to hear it?

Chuck Bryant: I purchased carbon offsets. How was that?

Josh Clark: That was actually really good, Chuck, nice.

Chuck Bryant: So carbon offsets, let's say, you could go through a company like TerraPass, who we'll talk about in a little more detail. And he would buy, basically - he would invest in renewable energy in other parts of the world.

Josh Clark: Right.

Chuck Bryant: So let's say if he's using 100 credits over what he should be using, he'll buy 100 credits worth of renewable wind energy in Africa.

Josh Clark: Right, because like we said -

Chuck Bryant: To make up for what he's using.

Josh Clark: If you alleviate CO2 emissions anywhere in the world, it has just as good of an effect at home.

Chuck Bryant: Right, sure.

Josh Clark: So, that -

Chuck Bryant: Making him carbon neutral, I believe, is the word they like to use, right?

Josh Clark: Right, so like if he calculates that his electricity that he uses annually at his house equals 50 metric tons of CO2 emissions, he can go buy that, right? So what you do is you go to a broker who sells carbon offsets.

Chuck Bryant: And takes a cut.

Josh Clark: Right, they sell them for, let's say, nine bucks a metric ton, right?

Chuck Bryant: Okay.

Josh Clark: I think that's about right, actually. So you say okay, well that's great because I only need 200 of these for the year. You've got to have some coin in your pocket, a little extra spending money, but for 1800 bucks, you can offset all of the CO2 emissions that your family puts out, for a year.

Chuck Bryant: It sounds great.

Josh Clark: It does sound great.

Chuck Bryant: And you know what, it can be. We're not pooh-poohing it, but there is another side to the coin, Josh.

Josh Clark: There definitely is. Anything that sounds too good to be true or lets you sit back with your hand down the front of your pants, drinking a beer and still, somehow, alleviating global warming, you should be suspicious of.

Chuck Bryant: Yes, and a lot of people are because a lot of times, what's happening is - and this is the way I read this article, was that it's not necessarily creating new initiatives. A lot of these initiatives, where the money is going, either were already in place or were going to be in place anyway.

Josh Clark: Right.

Chuck Bryant: So these firms are making a little extra cash, which they seem to appreciate.

Josh Clark: The firms who are undertaking these CO2 emission reduction programs.

Chuck Bryant: Right. They have said, and there's some quotes in the article. They said I made 16 grand last year and we're glad to get it, but we would have been doing this anyway.

Josh Clark: Right, that was a farmer who actually created or invested in very high-tech machinery that used methane emissions from his cows manure to generate electricity for his farm.

Chuck Bryant: So he could save money.

Josh Clark: Well, he's actually paid money through investment in this. The problem is this guy was going to do it anyway. It is good that he's being rewarded for it, but why aren't we seeking out projects that won't get off the ground unless there's investment.

Chuck Bryant: Exactly.

Josh Clark: Because then that means this farmer was going to do it anyway. And there's another project that wasn't going to happen unless it got this investment.

Chuck Bryant: Right.

Josh Clark: It doesn't seem like there's a lot of active, seeking out of investments. These brokers struck me as somewhat lazy and find stuff that's already there.

Chuck Bryant: Yes, and the other little hinkey thing is that there's not a lot of transparency going on here. When - I think was this Business Week?

Josh Clark: Yeah.

Chuck Bryant: Business Week got in touch with some of these firms. And no one will say. The broker won't say how much of a cut they're getting. They won't necessarily say who they're getting in touch with to help alleviate the carbon reduction.

Josh Clark: Right.

Chuck Bryant: To help manage the carbon reduction. So there's not very much transparency, and that has set off a lot of alarm bells with a lot of non-profits.

Josh Clark: Yeah, and it should. There's also the farmer, Darrell Vader is his name. Is it really Vader?

Chuck Bryant: D. Vader.

Josh Clark: Vander.

Chuck Bryant: Oh, that's too good to be true.

Josh Clark: Yeah, just like a carbon offset.

Chuck Bryant: Right.

Josh Clark: Darrel Vander, who has his poop powered electricity farm, he said that -

Chuck Bryant: (Heavy breathing.)

Josh Clark: Right, thank you for that because I was about to start stammering.

Chuck Bryant: I'm sorry.

Josh Clark: The investment that he's getting is $2.00 out of the $9.00 per -

Chuck Bryant: Right, less than two.

Josh Clark: Per ton, that's what he's getting from this firm. So you have TerraPass, right, which is a broker. And then he was set up with TerraPass through a middle-man. So from the $9.00 that a person's putting in to TerraPass for that one ton of carbon dioxide, only $2.00 of it is going to the actual program.

Chuck Bryant: Right and we're not pooh-poohing TerraPass here. They're a San Francisco company that I believe a teacher at Wharton started.

Josh Clark: Yeah, and he bikes to work, so he's legitimate.

Chuck Bryant: He proposed to his students to come up with an idea and they did. And it's working. They've got, I think, close to 50,000 customers. So I think they're trying to do the right thing, but it would be awesome if there was some new initiatives, and not necessarily hey, we'll give this farmer some dough for this thing he was already doing to begin with.

Josh Clark: Right, but I mean you can make the point that they are rewarding this guy for going above and beyond. Word gets out and yada, yada, yada, right?

Chuck Bryant: Yeah, very true.

Josh Clark: There's a - did you know that Vail Ski Resort -

Chuck Bryant: Yeah, let's talk about that.

Josh Clark: What's the company called?

Chuck Bryant: It is called Vail Resorts.

Josh Clark: Appropriately enough, they are 100 percent wind power.

Chuck Bryant: Right.

Josh Clark: Did you know that not one bit of their electricity comes from wind?

Chuck Bryant: Yeah, so they're able to claim that they're 100 percent powered by wind, when in fact, they have spent a lot less money buying renewable energy certificates, representing the amount of wind generated that they would require to generate all their power.

Josh Clark: Right, so what the - and their PR flak is pretty correct in saying we're in the resort business. We're not in the power generation business. But the resorts, actually, did look into powering themselves, their entire resort wit h wind power.

Chuck Bryant: Right.

Josh Clark: But they're like whoa, that's a lot of money when we can buy these offsets, right?

Chuck Bryant: Right.

Josh Clark: But there's a guy who actually does wind power electrical generation. It's called FPL Energy. And he's quoted as saying that voluntary renewable energy certificates like the ones that the Vail Resorts Company bought are pure corporate marketing and image management. And that's it. And this guy is actually the one who is on the receiving end. And he's like this is not right. It doesn't work.

Chuck Bryant: Right.

Josh Clark: So when the boots on the ground are telling you that everything is all screwed up, that usually means something is really screwed up. And again, when you're sitting back, just writing money out of your checkbook instead of actually doing something in your own backyard, it's probably not having the same effect, even though on paper it looks like it.

Chuck Bryant: Right. Can I throw you another quote?

Josh Clark: Mm-hmm.

Chuck Bryant: This is from Anja or Anja, Anja Culnos. She's outreach coordinator at Tufts Climate Initiative, and it's an advocacy group for the environment. And she kind of sums it up. "Nature does not fall for accounting schemes."

Josh Clark: Yeah.

Chuck Bryant: So that kind of says it all. It allows Hollywood hot shots to feel good about their life by purchasing offsetting their massive energy consuming lifestyles. And it allows companies, like Vail Resorts, to say we're powered all by wind, when they're really not actually powered by wind.

Josh Clark: Right.

Chuck Bryant: So, I'm at odds because I'm a green guy and it's good that people are doing things like this and not anything at all. But at the same time, new initiatives!

Josh Clark: Well plus -

Chuck Bryant: That's what we need.

Josh Clark: There's also a big debate about exactly who the onus should be on for reducing emissions in emitters, right? So Delta Airlines had a little program. I don't know if they still do, where for $5.50 for domestic flights, or $11.00 for international flights, you could contribute extra. You pay extra in your ticket and Delta would plant a tree. The question is Delta is actually the one that's polluting. Yes, you are. You're contributing. But you're also paying -

Chuck Bryant: Because you're buying the ticket.

Josh Clark: Hundreds and hundreds of dollars for your ticket. Why isn't Delta putting out any of their money to reduce their emissions or to find ways to reduce emission or to fund projects that actually reduce emissions? Like it keeps the whole carbon offset thing that these companies are actually using for their own public image are actually being paid for by the company's customers.

Chuck Bryant: Yeah. So Delta looks great.

Josh Clark: It's kind of a bit of a shell game.

Chuck Bryant: Right, yeah.

Josh Clark: Although, I did discover one place, at least one place that you can buy a carbon offset and it actually has an effect.

Chuck Bryant: Where's that?

Josh Clark: I talked to a guy once -

Chuck Bryant: Down on the corner?

Josh Clark: Michael Short. Yeah, I've got them right here in my jacket. What do you want? A guy named Michael Short with the Clean Air Campaign, they actually, you can go on to their website, calculate what your car puts out or how much you use in electricity, as far as CO2 emissions, and they'll give you X number of tons. Do you want to buy an offset?

Chuck Bryant: Oh, okay.

Josh Clark: And what they do, actually, is they take your money to go buy carbon credits from the Chicago Climate Exchange, and they sit on them. They retire them. They take them off the market, which drives the prices up on the ones that are on the market because the law of supply and demand. The scarcer something is, the more expensive it is.

Chuck Bryant: That makes sense.

Josh Clark: So they're actually in the game, buying these carbon credits and taking them away from the actual emitters, so that they do, it will eventually become more cost-effective for these people to take carbon reduction measures.

Chuck Bryant: Wow. And you know what? It's all paper. It's all in the ether.

Josh Clark: It is. That'

s vaporChuck Bryant: Yeah, it's vapor. It's what is so hard to understand about it.

Josh Clark: Yeah.

Chuck Bryant: But not really, once you wrap your head around it.

Josh Clark: Yeah, and I'm not even an environmental guy. I just love economics.

Chuck Bryant: Oh yeah you are. Are you kidding me?

Josh Clark: No, not really.

Chuck Bryant: Folks, Josh headed up the recycling program here at work before we officially had one and took the cans, himself, every week and allowed the can thing, collector to be at his desk. And you didn't take any credit for that.

Josh Clark: It's a little late for that. Thank you. Thank you, everybody! You left out the part where I took the cans to a homeless guy so he could take them in for money.

Chuck Bryant: Oh man, that would have been like the ultimate cherry on top.

Josh Clark: That was.

Chuck Bryant: Oh, you really did that?

Josh Clark: Yeah.

Chuck Bryant: Wow, look at you.

Josh Clark: I think I need to alleviate the shame of be ing so vain by buying some carbon offsets from the Clean Air Campaign.

Chuck Bryant: They should have like karma offsets, just for being a bad person. You could just buy karma offsets.

Josh Clark: I could use some of those. We should start selling them.

Chuck Bryant: Yeah, we should.

Josh Clark: Yeah.

Chuck Bryant: Heavily invest ourselves.

Josh Clark: Look for those in the future from Chuck and Josh. Until then, if you want to learn more about carbon trading, type those two words into the handy search bar at HowStuffWorks.com and it's now time for listener mail. So everybody grab your carpet square. Lay down.

Chuck Bryant: Josh, how about a Kiva update first.

Josh Clark: Ooh, that's an even better idea.

Chuck Bryant: You want to just break it down real quick for those who don't know what it is.

Josh Clark: Sure, Kiva.org is a micro lending site where you can contribute to investors or entrepreneurs, I should say in developing countries and in the U.S. And we have our own team, which you can find at www.Kiva.org/team/StuffYouShouldKnow. And we have a hell of a team, Chuck.

Chuck Bryant: We do, dude. We had a goal of $100,000.00 loaned and we are currently over $88,000.00 loaned.

Josh Clark: Wow.

Chuck Bryant: Through only close to 1800 members on our team.

Josh Clark: That's fantastic.

Chuck Bryant: Which is awesome, but I do know that is a fraction of our audience. So I put the call out to you folks who have said oh man, I keep meaning to do Kiva. Just go to Kiva and sign up. It's really fast and it's fun to loan.

Josh Clark: In $25.00 increments.

Chuck Bryant: $25.00 increments. My loans are recycling now, actually, so they're going to be due up to re-loan soon, which is pretty cool.

Josh Clark: That is awesome.

Chuck Bryant: Yeah.

Josh Clark: Way to go, Chuck.

Chuck Bryant: Way to go, Josh.

Josh Clark: That's the Kiva update, right?

Chuck Bryant: Yeah. So now listener's mail?

Josh Clark: It's time now for listener mail.

Chuck Bryant: Yes, Josh, I'm going to call this my family were witch burners. This is from Gwen, in Southern California. I'm so glad you guys did the podcas t on witchcraft. I've been interested in witchcraft since I was a kid. In fact, it started while researching my family history. I discovered a long line of involvement with the craft. Our family is directly descended from Increase and Cotton Mather.

Josh Clark: Ooh.

Chuck Bryant: And by the way, if I ever have a son, I'm going to name him Increase.

Josh Clark: Increase Bryant.

Chuck Bryant: Yeah, that's a great name. Or Goody, Goody Bryant.

Josh Clark: That's a girl's name.

Chuck Bryant: Oh.

Josh Clark: Good is short for Goodwife.

Chuck Bryant: Oh, okay. So if I have twins, I can name them Increase and Goody, if they were -

Josh Clark: That would be pretty awesome.

Chuck Bryant: They were both Puritan ministers, living in Boston in the 17th Century. Cotton, who was the son of Increase, wrote a great deal on the subject of witchcraft, spectral activity. Even directly accused a number of individuals to be witches! He was said to believe to be nearing - he believed we were nearing the last judgment and felt that he, himself, led the way against the devil's legions.

Josh Clark: Don't we all feel that way?

Chuck Bryant: Yeah, he was clearly wrong. He was personal friends with a few of the judges that presided over the Salem Witch Trials and urged them to use confession as the greatest evidence. And I'm sure the confession was probably wrung out.

Josh Clark: Beaten out of them.

Chuck Bryant: Yeah, beaten out of them. He and his father attended one of the final executions at Salem, but Cotton never recanted his position on witchcraft or his involvement with the trials, although his father became more and more vocal with his doubts of spectral activity, most likely because his own wife was threatened and called a witch. This is her family, dude. Is that sinking in?

Josh Clark: Yeah, it is.

Chuck Bryant: Cotton is pretty famous and somewhat of a legend in the history of witchcraft. When I was younger, I got to visit Salem and they did reenactments of the trials. Some was cheesy, some of it really cool. I later got to visit the grave of Cotton Mathers at Cobb Hill where we spoke with and learned a ton from the grave keeper. Strangely enough, on the other side of my mom's family, the Alexander side, we had a female ancestor burned at the stake.

Josh Clark: Wow.

Chuck Bryant: So she's really got it coming from both directions here. Unfortunately, we couldn't find out more about this because the documents are locked up in Ireland. Hopefully some day I can pick up this investigation, dig up more history. This all led me to study Wicca a lot when I was younger, and you guys did a great job laying it out. So that is Gwen. Well, we already said the last name, Mathers. And she said, evidently -

Josh Clark: She's got the last name still?

Chuck Bryant: Well, she said they picked up an S in the last hundred years. Weird? No?

Josh Clark: Yeah.

Chuck Bryant: Because it used to be Mather.

Josh Clark: That means that the kid who played Beaver in Leave it to Beaver is related then.

Chuck Bryant: Yeah.

Josh Clark: Jerry Mathers.

Chuck Bryant: Maybe he was a witch hunter.

Josh Clark: Excellent.

Chuck Bryant: So firsthand account from Gwen in Southern California, love it.

Josh Clark: Thank you, Gwen, appreciate that revelation about your family tree. If you have a story about how the Irish are keeping a stranglehold over information you wish to seek, put it in an e-mail and send it to StuffPodcast@HowStuffWorks.com.Announcer: For more on this and thousands of other topics, visit HowStuffWorks.com. Want more How Stuff Works? Check out our blogs on the HowStuffWorks.com home page.