Isramart: Obama admits Senate may need to drop carbon trading

Isramart news:
US President Barack Obama has acknowledged the potential need to strip cap and trade out of US energy legislation currently being re-drafted in the US Senate in order to pass the bill.

Speaking at a Town Hall Meeting in Nashua, New Hampshire on February 2, Obama answered a question on how to move forward on energy security and climate change. He conceded that cap-and-trade was the most controversial aspect of the energy bill passed by the House of Representatives in June 2009. Discussing similar legislation currently being examined in the Senate, he said: “We may be able to separate these things out. And it’s conceivable that that’s where the Senate ends up.”

However, the President also highlighted other successful programmes to incentivise clean energy using a market-based approach. “Remember acid rain? That’s how that got solved . . . the Clean Air Act slapped a price on sulfur emissions,” he said, referring to the sulfur dioxide (SO2) emissions trading programme launched in the US in 1995.

“And what ended up happening was all these companies who were saying this was going to be a jobs killer, etc, they figured it out,” he continued. “They figured it out a lot cheaper than anybody expected . . . So we should take a lesson from the past and not be afraid of the future.”

The International Energy Agency (IEA) also called this week for US politicians to pass an energy bill that included a cap-and-trade element. Reuters reported on Wednesday that Nobuo Tanaka, executive director of the IEA, had told the news agency that the US Senate needed to pass a cap-and-trade bill in order to hit Washington’s 2020 target of cutting carbon emissions by 17% from 2005 levels.

“To really achieve these [emission] targets, the US certainly has to introduce carbon prices either by cap and trade or carbon tax,” Tanaka told Reuters. “The Senate must pass this comprehensive energy and climate bill otherwise it cannot design a cap-and-trade system.”