Cap -and -trade is officially dead. This afternoon Senate Democrats, in a caucus meeting, decided not to pursue legislation that would seek to cap carbon and other green house gases by pricing them, a market-friendly scheme known as cap-and-trade.
This is a clear setback for cleantech and renewable energy companies.� A comprehensive climate change and energy law would have provided both the long-term certainty and funding they currently lack.
The decision, which comes just a few days after President Obama signed major financial reform into law, officially kills the Kerry – Lieberman, a comprehensive climate change and energy bill. It also� thwarts any chance for Obama to get a comprehensive energy and climate change law, something that — along with healthcare and financial reform — he campaigned hard on.
With the mid-term elections just a few months away, and predictions for strong Republican gains both in the House and Senate, it remains unclear if cap-and-trade will ever be revisited. What’s likely to emerge over the next few months is one or more bills that will help gulf communities recover from the BP oil spill and also extend existing green energy government funding programs. See here, for a recap of some of the “green legislation” now being considered by the Senate.
From the start Kerry – Lieberman� never had the 60 votes it needed to get to the president’s desk. Things got even more tricky last spring when Senator Lindsey Graham (R-S.C.), a co-author of the bill, walked away, angry that the White House, in the wake of the controversial Arizona immigration law, was considering pushing for immigration reform over climate change. His sudden� departure made getting any Republicans to support the bill even more difficult. These votes were crucial considering that many Democrats, mostly from carbon-dependent states, had from the start opposed any legislation that priced carbon.
Void of Graham’s support Senators John� Kerry (D-Mass.) and Joe Lieberman (I-Conn.)� still soldiered on to get those crucial 60 votes. Kerry argued that Congress passed many energy bills in the past which had done little to curb carbon and green house gases emissions. He repeatedly urged Senators to pass� a comprehensive legislation that included cap – and – trade and not settle for just� another energy bill.
Shortly after the caucus meeting, Senator Kerry said:
We�ve always known from day one, that in order to pass comprehensive energy/climate legislation, you�ve got to reach 60 votes, and to reach those 60 votes, you�ve got have some Republicans. And as we stand here today, we do not have one Republican. I think that it�s possible to get there.
The decision not to push for a cap-and-trade, while expected, still comes as a surprise, Kerry noting that just this morning he and� Senator Lieberman� met with “one Republican who has indicated a willingness to begin working towards something.”
Last month the White House hosted a bi-partisan meeting to find a way to get cap-and-trade passed. But despite its repeated call for the U.S. to lead the global green economy,� the Obama administration, never made cap – and – trade a priority. In his first Oval Office address last month President Obama did not mention cap-and-trade once. Neither did he mention it, earlier that same month, in Pittsburgh when he called for the country to wean itself off carbon-based energy. A few days after the Oval Office address, when asked if President Obama would sign a climate change bill that , White House Chief of Staff Rahm Emanuel avoided giving a clear yes-or-not answer, saying the president had called for Congress to pass a comprehensive energy bill with a component that would “reduce our carbon pollution.� He never mentioned cap-and-trade.
Today’s decision is also a setback for corporate America. Many Fortune 500 companies have come in support of a legislated, rather than an (EPA) regulated approach, to carbon pricing. John Rowe, CEO of Exelon, one of the nation’s largest power company, has been a prominent defender of cap – and trade. Last fall he actually pulled his company out of the U.S. Chamber of Commerce because of the powerful lobby group’s� opposition to cap-and-trade. Rowe has said that nothing else but cap-and-trade “will encourage low-carbon investments and discourage high-carbon investments.”
As is the U.S. is now halfway to pricing carbon. A little more than a year ago the House passed its own comprehensive climate change and energy bill, Waxman-Markey, which contains a cap – and – trade provision.
Kerry did not totally close the door on eventually getting his own bill� passed.
Senator Lieberman and I will continue to work with our colleagues and the stakeholders in order to carve a path to sixty votes for comprehensive legislation that appropriately targets, in an appropriate way, carbon, so that we can send signals to the marketplace and change the direction and create jobs for America and improve our security. The work we�ve done over the last year and a half will remain a foundation for all of this effort.