“President Obama says he wants to see a cap-and-trade bill on his desk this year. That’s a pretty strong statement. There is a political desire and we can work out something,” the California scholar says.
Although making it very clear that TransCanada will work with any carbon pricing scheme American legislators will come to agree upon, Kvisle doubts that a carbon cap-and-trade scheme will function as envisioned.

“They are patterning this after the programs to reduce NOx and SOx,” he says, referring to programs to reduce nitrous oxide and sulfur oxide successfully implemented in North America over the last 30 years. Those schemes worked well because the cap allowed high-value industries to buy emission permits from low-value industries, he adds.

“The interesting thing is that there were a lot of low-value emitters, people who generated relatively worthless economic products, who also emitted a lot of NOx and SOx. The high-value plants could make it worth the low-value plants’ while to shut down, to cease production and make their credits available to the high-value producers. That’s going to be a problem in CO2. When I look around, I have a hard time seeing who is going to shut down. I am skeptical that cap-and-trade is going to work as well in an enormous emissions stream such as CO2.”

Hyndman is likewise committed to a North American plan. While the CAPP official has his own reservations about cap-and-trade, he says that the most important part of any carbon policy is that it is clear and well understood.

“We have to align with the U.S., and one of the tricks is going to be whether people take the time to understand the details of policy,” Hyndman says. “Clearly Canada could adopt an Alberta-style policy that is comparable to what the U.S. does. The question is whether we can get past the rhetoric of people who are either trying to mislead others or don’t really understand this stuff and are mixing up issues and confusing the discussion.”

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