A United States National Cap & Trade Bill
This is the event we all expected would happen per the promises of the Obama administration and the efforts of the Democrat controlled Congress of the United States. While a House of Representatives draft of the legislation passed, the Senate did not pass a bill to be signed into law in 2010.
Why Didn’t a U.S. National Cap & Trade Bill Pass?
Industry experts believe that the Health Care Bill took precedence over virtually every other promised legislation. Additionally, the Gulf oil spill and the continuing recession caused political upheaval influencing the mid-term elections in November.
When will a National Cap & Trade Bill be addressed?
While many experts don’t expect to see a National Cap-and-Trade bill for 1-2 years, cap & trade in the USA has taken on several new forms as listed below
Individual States, Regions and the EPA
Individual states have moved swiftly to pass their own initiatives in response to failure of the Congress to act this year. To date, these include:
California AB32 – A true Cap & Trade Law commencing January of 2012
California has lead the way in environmental issues once again, by passing a true Cap & Trade law. This has created an active market for offsets and allowances, although there is still much to be decided on the inclusion of offsets from sources outside of California’s Climate Action Reserve registry. The California Air Resources Board has solicited public opinion and is being pressured to widen its inclusion of offset types and sources. This program will include the use of offsets.
Western Climate Initiative commencing January of 2012
California and 9 other US states and Canadian provinces are moving forward with plans to set up their own carbon trading market. The plan for the sub-national North American carbon trading scheme, slated now to launch in January 2012, is part of a goal to reduce greenhouse gas emissions regionally 15% by 2015. The trading of pollution allowances under the scheme is expected to run to $21 billion annually.
The WCI currently includes:
Washington • Oregon • California • Montana • Utah
Arizona • New Mexico • British Columbia • Manitoba
Ontario • Quebec. Others may join as well.
This program will include the use of offsets.
Environmental Protection Agency
The U.S. Environmental Protection Agency (EPA) intends to regulate Greenhouse Gases and has begun to release its standards and enforcement rulings. This may evolve into a National system which could include Cap & Trade like features including the use of allowances and offsets. Opposing Governors and other legislators have begun many court cases, over which the EPA has to date prevailed. Industry leaders are lobbying for the inclusion of offsets. This initiative may include the use of offsets.
Summary
The USA did not pass a National Climate Change law in 2010. Cap-and-Trade in the USA is assembling itself on a regional basis and will allow the use of certain offsets in their compliance programs. Analysts expect various offset standards to be issued which will determine offset inclusion in these initiatives.