Cap-and-trade takes shape, sort of

U.S. lawmakers appear to be playing hide-and-seek with cap-and-trade legislation.

By Jeff Lewis

February 01, 2010

U.S. lawmakers appear to be playing hide-and-seek with cap-and-trade legislation. Following last week’s State of the Union address, in which President Barack Obama renewed his call for tough action on the climate file, the federal government has included a ‘placeholder’ in its $3.8 trillion budget proposal for revenue generated by cap-and-trade provisions.

The Obama administration is championing a net-zero appraoch to emission reduction legislation, the NY Times reports. A climate bill currently making the rounds would increase government revenues by $873 billion through 2019 but would cost $864 billion to implement.

Revenue would stem from the auction of carbon credits. But, the Times points out, the government has yet to fully endorse a cap-and-trade system for reducing emissions, and it remains unclear how emission allowances would be divided or what percentage of credits would be auctioned.

The president’s address also included an olive branch for Republicans favoring nuclear power and increased offshore oil exploration. Whether or not nuclear enters the climate debate in a significant way remains to be seen. In Alberta, the greenest power of them all remains in limbo, although a new report from the University of Alberta’s Environmental Research Studies Center has attached a $9.4 billion price tag to the Bruce Power proposal in Peace River.