President Obama should revisit cap and trade legislation if he’s serious about cutting US carbon emissions, a former climate advisor to Bill Clinton says in an open letter to the White House.
Dirk Forrister, who’s now head of the International Emissions Trading Association (IETA), has written asking for the government to explore ‘market’ options to cut emissions where possible.
Obama has promised to address the causes of climate change in his second term of office, and Forrister says the best solution is trading.
“Market mechanisms are the most efficient form of greenhouse has regulation, because they create incentives to unleash the creativity and ingenuity of the private sector, and spur sustainable economic growth,” he said.
“We maintain that the best solution for the United States to adopt in meeting its climate policy goals would be the adoption of simple market-based legislation.”
California’s carbon market opened for business in November 2012, but the US has yet to adopt a national scheme for trading emissions
US emissions have been on a gradual decline since 2006, largely due to shale gas replacing coal, which emits twice as much carbon dioxide, but the country is still the second largest source of greenhouse gases in the world after China.
Negotiations over a nationwide cap and trade bill collapsed in Congress back in April 2010, although initiatives operate in California and in the nine north-east states that make up RGGI.
In the letter Forrister, who was chairman of the White House’s Climate Change Task Force during the Kyoto Protocol negotiations, argues that growth in the renewable energy industry will only continue if it receives the ‘right policy signals’ from the federal government.
Observers expect the administration to use its existing executive powers through the Environmental Protection Agency (EPA) to target high domestic emitters, such as coal-fired power plants, but Forrister insists a more long-term strategy is required.
“In [their] absence, America’s progress will be slower and less focused, and it will likely mean rising costs for businesses and communities to adapt to the impacts of a changing climate,” he said.
“While action to mitigate and protect our economy from climate impacts has costs, inaction is not free – it is costly and disruptive to society and business alike.”
This week the price for carbon hit a record low in Europe as the over-supply of emissions permits during the economic crisis continued to undermine the carbon market.
The price fell below 4.8 euros in early trading, before recovering to above 5 euros by the end of the day.
Experts believe the price should be around the 25 euro mark to provide an incentive for companies to invest in low carbon technology.