Where is Cap & Trade Legislation Now?
The debate over a national cap and trade system for carbon is moving along in Congress, though probably not as quick as the Obama administration would prefer. The Waxman-Markey Bill (HR 2454) certainly has as its cornerstone a national cap and trade system as has been previously blogged. The Bill sailed through the House Energy and Commerce Committee.
The real battle may lay in the House Ways and Means Committee where Republican members are pushing for a mark-up of the Bill, meaning Members would have a chance to offer amendments to address the concerns they have heard from their respective constituents.
Republican members of the committee have already characterized the cap and trade system as “a great big tax.” Republicans have also noted that Duke Energy has proposed significant rate increases due in no small part to its need to meet an expected cap on greenhouse gas emissions.
What does this mean? Skeptics know that Congress has a lot on their plate. If climate change legislation moves forward this year, prepare for a stand off over cap and trade in both the House and the Senate.
Judging from the Senate Finance Committee’s May hearing on cap and trade, it appears that a carbon tax is still on the table. To many on Capital Hill, the fixed cost of a carbon tax is preferable to the potential price fluctuation under a cap and trade system. The trade-off, as many economists have noted, is a slower rate in the reduction of greenhouse gases if a carbon tax is implemented in lieu of a cap and trade system.
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