By Jim Kharouf

Call it a wrap. The election of Scott Brown in Massachusetts this week was a major blow to carbon cap-and-trade legislation in the US this year. But let’s face it, the 60-seat Dems were not getting it done on health care or financial reforms which simply pushed energy and climate legislation down the priority ladder. One more Republican wasn’t a backbreaker for the climate legislation. It was general voter and Congressional apathy on the subject, climate confusion campaigns and a lack of a cohesive Democratic leadership on the bill was largely what has put cap-and-trade in jeapordy. (See today’s story in Lead Stories “US climate bill backers seen pushing wrong message” from Reuters.

In the fine tradition of arm chair quarterbacking, carbon cap-and-trade has been fighting an uphill battle with steady erosion for some time. The Pew Research Center’s poll in October reported that Americans who believe in global warming fell from 71% in 2008 to 57% in 2009. And a November 2009 Washington Post/ABC poll showed an ongoing trend in Americans’ opinions about climate change, fewer and fewer see it as a problem. The poll showed that Republicans who believe climate change was happening now fell from 76% in 2006 to 54% in November 2009 and from 92% to 86% among Democrats. The Washington Post article quoted pollster Mark Mellman who said “”It’s a sad state of affairs when science becomes subject to partisan politics.” Indeed it is.

Which brings up the second major problem, the “you say yes, I say no” politics that has gripped Washington. Funny thing, given that both Sens. John McCain and Barack Obama both ran presidential campaigns essentially pushing the same cap-and-trade model. Now Republicans, almost to a person, are against the notion that a free market model will help establish a price for carbon that will help in reducing our carbon emissions. That’s odd, considering it was a bi-partisan effort in 20 years ago that established the Clean Air Act and the sulfur and nitrous oxide cap-and-trade models which have been so successful. Never mind that now, it’s a crappy idea.

The Dems are not without fault either. Backward Representatives like Collin Peterson, who held the ACES bill up long enough to get his farmers what they wanted (See Reuters story Farm Belt wins U.S. climate bill points: lawmaker, plenty of agriculture offsets, the USDA to verify ag offsets, a cheap out for ethanol makers and an exemption from GHG legislation. He’s not the only one who dove into the money trough for constitutents, other Dems didn’t step up and support the legislation despite the short-term pain, long-term gain scenarios.

And quite frankly, Obama hasn’t really led on this issue and let Republican efforts get some of the high ground. He’s lost some international clout by touting campaign promises without any solid backing from Congress. He’s also failed to push Congress to get things done on this issue.

So what’s next? There is the possibility that state and regional markets could gain a bit of momentum, but even those are under pressure of poor economies and corporate lobbyists who want to derail any carbon caps (See story in LA Times, “California cap-and-trade: A political gamble?.”) That said, states such as California and others are starved for cash. And one thing the Regional Greenhouse Gas Initiative in the northeast showed, was that auctions can bring in substantial revenues, even when carbon credits are priced very low. The Western Climate Initiative looks promising on its surface but experts tell me that at the end of the day, its a voluntary regional market, not a legally binding one. Meanwhile, the EPA option is under attack by Sen. Lisa Murkowski, (See Lead Stories)  who aims to stop the agency from regulating greenhouse gas emissions.

The question now is, can the Dems now come to the table to get a compromise done and still keep cap-and-trade?

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