John Kerry uncertain of fate of cap and trade

  @ibtimes on December 16 2009 4:17 PM

COPENHAGEN - U.S. Senator John Kerry raised the possibility on Wednesday that a major energy and climate change bill he is trying to craft might not contain the cap and trade mechanism for reducing carbon dioxide emissions.

At a press conference on the sidelines of an international global warming meeting, Kerry said there was a 100 percent likelihood the Senate will pass major climate legislation next year.

But the Democratic senator added that he and other senators had not yet worked out the method or means by which we might price carbon.

Kerry said some want a carbon tax, others seek different mechanisms, while still others believe in just arbitrarily setting the (carbon) reduction target and letting the economy work its way.

Legislation narrowly passed by the House of Representatives in June would establish a cap and trade system to cut U.S. smokestack emissions of carbon by 17 percent under 2005 levels by 2020. Similar legislation has been stalled in the Senate for months.

Besides setting the cap on emissions, it would require companies to buy permits to emit dwindling amounts of carbon. Those permits could be traded in a regulated financial market.

Some senators do not want Washington to establish what could become a trillion-dollar carbon market on the heels of massive banking industry mismanagement and poor government oversight that contributed to a severe U.S. recession. Others think cap and trade is too complicated.

But Democrats in Congress, the Obama administration and major environmental groups all have embraced cap and trade, saying that a carbon tax lacks political backing on Capitol Hill, especially with congressional elections less than a year away, and that other approaches would not effectively reduce carbon pollution.

Many Republicans, and some moderate Democrats, repeatedly have urged congressional leaders just to pass a bill already in the pipeline that would encourage the growth of alternative energy use in the United States without mandating carbon reductions.

Such a move could anger leaders around the globe as they try to work out new international steps to stave off global warming and possibly catastrophic flooding, drought and spread of disease. The United States is the world's second largest carbon polluter behind China and if it stays out of a new carbon control program, global efforts could fall apart.

NEED FOR GLOBAL DEAL

In a speech earlier on Wednesday to a U.N. group, Kerry warned that if international climate change talks falter this week, chances for the United States approving its own carbon pollution-reduction plan will seriously erode.

While he sought to encourage the negotiators in Copenhagen and assure them that the United States had finally joined their efforts, Kerry said that a failure to address core global issues here will make it exceedingly difficult for elected officials to back legislation.

The failure of the U.S. Congress to pass legislation before this meeting of 193 nations in the Danish capital has complicated efforts for a global deal. Many developing countries are suspicious that the U.S. has not yet committed to binding targets for reducing emissions.

President Barack Obama joins more than 120 leaders here on Friday in hopes that he can help seal a political deal on key goals for attacking climate change problems. The idea is that with another six or 12 months of negotiating, a final pact can be reached in 2010. But the Copenhagen talks, after nine days of haggling, had not yet produced tangible progress.

Kerry warned that deep political concerns will have to be quelled in the Senate before legislation can pass sometime between March and June.

He noted difficult economic times in the United States that complicate debate of a climate change bill.

Giving one example, he said, To pass a bill, we must be able to assure a senator from Ohio that steel workers in his state won't lose their jobs to India and China if those countries are not subjected to tough climate control requirements in a global deal.

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