The global recession, US mid-term elections and a weak deal at Copenhagen all play a part in the future of cap and trade.
Barack Obama put his reputation on the line at Copenhagen by saying America would act on climate change. Now it's up to Congress. The House of Representatives passed the Waxman-Markey bill last June which would set a price on carbon, and would put progressively tighter limits on greenhouse gas emissions with a 17% cut from 2005 levels by 2020, and 80% by 2050.
Barbara Boxer, a California Democrat, passed a nearly identical version of the bill out of the Senate environment committee last November. But action in the Senate has stalled. Boxer stared down a Republican boycott to get a bill through her committee. But Democrats are deeply reluctant to throw themselves into another full-on confrontation with Republicans so soon after the bruising battle over healthcare reform.
What happens next?
US environmental organisations say there is still a good chance the Senate will move ahead on a climate change bill this year. A triumvirate of Senators — Democrat John Kerry, Republican Lindsey Graham, and Independent Joe Lieberman — are working to craft a climate change bill they think would have a good chance of getting support from Republican as well as Democratic Senators. Kerry had earlier promised a blueprint late last year. The newest deadline is at the end of this month. The Senate is then expected to begin its push in the spring. Read more.