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Say Goodbye to Cap-and-Trade in the U.S.

Speaking one day after Republicans won control of the House of Representatives, President Barack Obama has backed away from a cap-and-trade program saying he will work with Republicans on other ways to cut carbon emissions, reports Bloomberg Businessweek.

A cap-and-trade program was included in the climate bill passed by the House last year, but stalled in this year’s Senate.

Peter Shattuck, a carbon-markets policy analyst at Environment Northeast, told Bloomberg News that prospects for a U.S. carbon market are “more remote than before the election because the vast majority of Republicans have opposed cap-and-trade proposals to date.”

In addition, it’s likely that the Republicans will increase pressure on Obama to delay or cut his plan to regulate carbon through the Environmental Protection Agency (EPA), Kevin Book, managing director of ClearView Energy Partners, told Bloomberg.

Dozens of business groups and associations, who oppose EPA regulation, have been lobbying and/or have filed challenges to stop the EPA’s carbon rules.

The president remains committed to “common-sense” EPA regulation of greenhouse gases, Heather Zichal, deputy assistant to the president for energy and climate change, said in an e-mailed response to Bloomberg.

And Obama stands behind his pledge to cut U.S. emissions about 17 percent by 2020, said Todd Stern, Obama’s top climate negotiator, in the article.

As a result of Obama’s comments, futures contracts in the U.S. Northeast’s carbon market fell to their lowest level in six weeks, reports Bloomberg Businessweek. Regional Greenhouse Gas Initiative (RGGI) permits for December delivery fell 2 cents, or 1.1 percent, to $1.88 each on the Chicago Climate Futures Exchange. RGGI carbon prices have fallen 18 percent this year.

The RGGI auction of carbon dioxide allowances, held on Sept. 8, hit its lowest allowed level for allowance prices for the two-year old program, selling at $1.86 a ton.

However, Bloomberg reports that prices traded at $1.85 on Nov. 3, a record intraday low that was below the minimum allowable bid of $1.86 in carbon dioxide allowances.

Meanhwhile, the Chicago Climate Exchange (CCX) is set to close by year’s end. Although CCX commitments were set to expire at the end of the year, those participating in the program thought it would have continued if there were any chance of climate change action, reports National Geographic.

Instead, the eight-year-old platform that enabled power companies, manufacturers, and others to reduce their greenhouse gas emissions and trade the credits they earned, will shut down at the end of this year, according to the article.

Many in industry and the environmental community saw the CCX as a less costly approach for reducing greenhouse gases than regulations from Washington, D.C., with voluntary participation, reports National Geographic.

It’s estimated that the 450 members of the exchange, including power companies, manufacturers, cities, and universities, cut emissions by nearly 700 million metric tons of carbon dioxide since 2003. Reductions in industrial emission accounted for 88 percent of those cuts, while the remaining 12 percent came from offset projects, according to the article.

CCX will continue to operate a registry for carbon offset programs, and there will continue to be carbon trading on the Chicago Climate Futures Exchange (CCFE), a platform for both voluntary and small, regional mandatory climate programs like RGGI, reports National Geographic.

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9 thoughts on “Say Goodbye to Cap-and-Trade in the U.S.

  1. One step forward. Two steps back. Is inaction what the people want or is this just big business and dirty energy money influence over the Republicans in Washington? or both? Can all those scientist be wrong??

  2. This seems like another case of short-term perspective killing the long-term potential, much like our negative savings rate, nuclear power, and our obesity epidemic. When we just focus on our current pain/discomfort and ignore the potentially negative impacts of our present actions on future opportunities, we perpetuate a shallow, empty, and reactive existence and fail to reach our full potential as individuals or a species.

    However, if we accept that the present will always have pain and challenges, and we attempt to address current concerns without undermining the future, we can make continual and gradual progress. The question posed to voters and decision makers should be: how much are you willing to change/sacrifice now in order to protect future health and prosperity? Everything is a series of trade-offs, but we are still stuck in the mind-set of wanting everything, immediately, with no cost or sacrifice.

    The other fundamental issue here is selfishness vs. compassion and empathy. If we consider our impact on others, it is obvious that we should extract, consume, and pollute much less (especially in the US, when any of those are considered on a per capita basis). We have to want fresh water and vaccines for everyone more than we want 2nd homes, 3rd cars, or cheap gas for ourselves.

  3. Rich: Yes, they can all be wrong, just as Einstein himself was wrong about certain things. Most of those who “believe” in human-caused climate change are not specialists. They just defer to their fellow scientists, who they think ought to know. Unfortunately, those specialists are held hostage to the catastrophic scenarios dictated by their sources of funding.

  4. @Pat,

    Well said. This country has a problem in the way we operate living short term and everyone try to manipulate the system for their own personal benefits. Problem is that the long term impacts of short term decisions end up doing much more harm than good, and the people with the foresite to see it coming and try to do something about it are overpowered by other parties. And most of the american public is uneducated/unaware and when you try to explain why they dont care.

    Lets not forget, America is still the new kid on the block relative to the rest of the world, and while we may have sprinted ahead doing the right thing, we can easily fall behind (as we are now) by doing the right now thing. In order to stay ahead of the world and be the trend setters we are, we need to innovate. And innovation doesnt stem from helping business make more money. It truly comes from people thinking ahead and doing what is right and what works.

    If we sell out to make the rich richer, we lose our country and ultimately the planet. Be a voice for the voiceless, and who speaks for earth?

  5. I agree with all the comments about one step forward…

    But we should also realize that 33 states have made a commitment in the form of RPS, AES or target GHG goals. The states are making Congress irrelevant. Looking at EREE’s map of states with RPS, if the poverty belt states, like TN, AL , MS, AR, NE, et al would realize what benefits solar and other RE industries can do, the need for Congress will disappear completely. True, state RPS target only one industry — utilities — but CA is leading the way with a more general standard.

  6. Martin:

    You are wrong about the scientific consensus. Most of the climate specialists do in fact accept the science behind climate change. The fact that other scientists who also accept it are working in other fields does not change that. Both within and outside of the climate field, scientists everywhere accept that AGW is real, and represents a danger.

    Furthermore, the only scientists whose conclusions are dictated by their funding sources are the ones still proclaiming the science to be unsettled or outright wrong.

  7. John:
    Unfortunately there is very little actual science used in climatology. Correlation = causation and unverifiable computer models do not constitute science. Real scientists don’t have to fudge their data. They don’t attempt to silence those who don’t agree with them. Their is no credibility in the alarmist projections of climatologists.

  8. God, this is the biggest bunch of socialist democrat drivel, trite sound bites from Gibbs and Axelrod…”most Americans are too dumb,” doing the “right thing,” “if we perpetuate the rich get richer,” “the smart ones will do this”…do you ever actually stop and listen to yourselves?? It is why Democrats were run out of office this week. Know-it-all, all-knowing condescension, hypocrisy (I’m sure no one posting takes a vacation using an airplane, has two cars, or keeps their heat above 60 degrees), and shallow-minded, unicentric thinking. How about if you first put your foot on your leaders like Al Gore, the of the massive carbon foot print home and his constant use of private jets?? How about Speaker Nancy Pelosi who first, during tough times, increased the federal budget so that she could buy a private plane to serve her office, and then takes it back and forth to CA with her grandchildren? How about Obama and family and Oprah taking multiple Air Force Ones to Europe to bid on the Olympics? How about the 34 (!) war ships accompanying him on his present trip? How about jamming fellow socialists and communist-lovers like China to get on board with cap and trade? How about you let the American people choose, rather than jamming stuff down their throats? Perhaps, just perhaps, they know better than you.

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