Analysts at New Carbon Finance foresee a national cap-and-trade emissions trading scheme emerging in the U.S. in 2012-2013, one that by 2020 has the potential to grow to $1 trillion, more than twice the size of the European Union’s.
Though the Bush administration has said that any such legislation would be vetoed, the chances of a national cap-and-trade scheme being put into effect by law, perhaps as soon as 2009, look likely with the election of a new president, though the positions of the candidates, as well as the two houses of Congress, encompass a range of attitudes and approaches, the analysts note.
Climate Change in Congress
Some 13 greenhouse gas emissions reduction bills were put up before Congress this past year. Two would impose a carbon tax while 11 include some form of market-based mechanism, the most common being an emissions cap-and-trade system based on allowances for energy and power producers and offset credits generated by large consumers coupled with direct regulation. The Senate is leading the way with the Lieberman-Warner bill, known as America’s Climate Security Act, which is slated for discussion early this year.
The House of Representatives has been much slower than the Senate when it comes to development and debate of climate change legislation, New Carbon Finance notes. The House still awaits two bills from Representative Dingell, one introducing a carbon tax and the other a cap-and-trade system. House members are also waiting on a companion version of the Senate’s Lieberman-Warner bill.
Lieberman-Warner’s “America’s Climate Security Act” is the result of a bi-partisan effort led by the two senators to reconcile the various elements put forward in previous bills and put forward an acceptable compromise that incorporates the best of them. Due to be discussed on the Senate floor in coming months, the analysts consider it as having the best chance of being passed into law.
And on the Campaign Trail
Citing the need to achieve genuine climate change mitigation and enhance energy security, Democratic candidates are proposing larger and longer term greenhouse gas emissions reduction targets than their Senate counterparts, according to the New Carbon Finance report. Leading Democratic presidential nominees Senators Clinton and Obama are co-sponsors of the Sanders-Boxer Bill, which aims to reduce emissions by 80% by 2050. They are also both backers of the Lieberman-Warner Bill.
“Republican contenders have been much more cautious and have mostly refrained from calling for specific reduction targets, emphasizing energy security instead,” the analysts write, noting, however, that both John McCain and Mike Huckabee have been the only exceptions. McCain is a co-author of one the Senate’s climate-change bills and Huckabee has come out and stated his support of a federal cap-and-trade system. Though he has not come out in opposition to such a law, Romney, in contrast, appears not to favor any direct emission controls or market-distorting mechanisms.