Moderate Democrats Revolt Over Obama’s Cap-And-Trade Climate Bill

  • Date: 28/12/09

The Times: Less than ten days after claiming a breakthrough on climate change in Copenhagen President Obama is facing a mutiny from senior Democrats who are imploring him to postpone or even abandon his cap-and-trade Bill.

Democratic Senators, fearful of a drubbing in the mid-term elections next year, are lining up to argue for alternatives to the scheme that is the centrepiece of the carbon reduction proposals that Mr Obama hopes to sign into law. With the Congressional battles over Mr Obama’s healthcare reforms fresh in their memory senior Democrats are asking the Administration to postpone the next big climate change push until at least 2011.

Senators from Louisiana, Indiana, Nebraska and North Dakota, some with powerful energy companies among their constituents, are falling out of love with the idea of a large-scale cap-and-trade scheme — which seeks to allocate tradeable permits to major polluters — in favour of less ambitious proposals that put jobs and the economy first.

Each of their Senate votes is vital for any climate change Bill to have a chance of being passed, and a firm American commitment to cap and trade is essential for similar carbon reduction mechanisms to be effective on a global scale.

Asked if she has urged the White House to abandon cap and trade — at least until after the mid-terms — Senator Mary Landrieu of Louisiana told the Politico website yesterday: “I am communicating that in every way I know how.”

At least five other high-ranking Democrats have lobbied the Administration in similar terms. Senator Kent Conrad of North Dakota said that winning passage of climate change legislation in an election year had “very poor prospects”, and Senator Ben Nelson of Nebraska said that he would “just as soon see [climate change] set aside until we work through the economy”.

Even more significant — as indicators of the majority party’s resolve to pass climate change legislation in the face of almost unanimous Republican opposition — were remarks from Dick Durbin, the Senate Majority Whip, and John Kerry, the Massachusetts Senator who is in the process of drafting a climate change Bill favoured by the White House

“At this point, I’d like to see a complete Bill but we have to be realistic,” Senator Durbin said. Senator Kerry, speaking at the Copenhagen climate conference this month, said: “I can’t tell you the method or the means by which we might price carbon. We haven’t resolved that issue yet.”

Proponents of cap and trade argue that allowing polluters to trade carbon permits gives them a powerful incentive to emit less than the maximum imposed by the cap — and ensures that these emission reductions are achieved by the most cost-effective means available, whether by investing in new, clean technology at home, or in offsetting schemes in developing economies where greater reductions can be achieved per dollar spent.

Critics of the system point to teething problems in the European pilot scheme, begun under the auspices of the Kyoto Protocol, when the price of carbon collapsed because of excessive free allocations of carbon permits to big, politically connected polluters such as the power generation industry.

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