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.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.


  1. Ravi Ravishankar on

    Cap-and-trade has been in effect in Europe for nearly 10 years. An how much carbon reduction has Europe accomplished? Also, the bills currently in Congress are so full of loopholes (free credits to so many) and have so woefully underpriced CO2 that they will be worse than useless – but downright counterproductive. The cap-and trade-schemes believe in those who believe in the fiction of a “created market”. These are nothing but a convenient mask for those legislators who do not have the courage to impose a tax when that is the most direct and expedient way to deal with CO2 emissions..

  2. I’m with Ravi–Waxman-Markey is going to be left totally toothless after all of the giveaways and concessions are doled out, which is just another reason why we should abandon it, get serious about stemming the tide of global climate change, and implement a revenue-neutral carbon tax.

  3. Remarkable! The most telling statement in the post: “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.” Proposing a “significant rate increase” in anticipation of an alleged increased cost? The Republicans are getting played here and are either too blind to see it, or are so set against any successful approach toward reducing GHGs that they will hitch their careers to any lame argument. If Duke’s actions say anything, it is that we should move full-speed ahead because the utilities simply cannot be trusted to do anything constructive on their own.