A US carbon emissions
cap-and-trade bill won’t see a Senate vote before March 2010, leading Senators have confirmed. The news has also seen further falls on the US’s only existing regulatory carbon market, the north-eastern states’
RGGI. Expectations that Congress wouldn’t pass a bill by December have already dealt a blow to the chances of a new global climate agreement being reached in the upcoming UN climate change conference in Copenhagen.
A Senate version of proposed laws to cap carbon emissions and establish a nationwide trading market in emission rights is under development but has taken a back seat to a landmark health care reform bill taking up much of Congress’s time. Harry Reid, the majority leader in the Democrat-controlled Senate, and Republican John McCain, have both said they don’t believe a vote will be possible before the northern Spring. A lower-house bill, the Waxman-Markey American Clean Energy and Security Act, passed through the House of Representatives in June.
The lack of finalised US domestic regulations to cap emissions makes it difficult for the Obama administration to convince other nations to bridge gaps on emissions reductions and strike a new international deal.
A group of moderate Senators is reported to be considering drafting an alternative climate bill that would see only power generators subject to cap and trade. Non-market measures to limit emissions, like fuel and buildings energy efficiency standards, would be applied to other high-emitting sectors of the economy, a senior aide to Senator Richard Lugar said.
A regional US cap and trade scheme targeting power companies already exists in the north-east. Carbon prices there have continued to slide as hopes fade for the enacting of federal carbon trade laws. The RGGI market is somewhat compromised with more emissions permits on issue than are required by power generators in the ten participating states. But federal cap-and-trade proposals offer recognition of the permits and conversion value. However, as hopes for a federal scheme wilt under the eight of Senate delay, speculative interest in RGGI permits is waning.
The benchmark December futures RGGI contract closed at $2.21 on Thursday on the Chicago Climate Futures Exchange after eight days of falls. There may now be little to stop prices falling to a minimum level set by regulators of $1.86, one market analyst said.
Bloomberg, Wall Street Journal, New York Times 18/11/09
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