Federal carbon trading bill to be "passed next year,” says lawmaker

A Democrat on the US House of Representatives Energy and Commerce Committee says that a carbon cap and trade bill could be passed in the United States as soon as the middle of 2008.

Representative Jay Inslee, a Washington-based Democrat, made his comments in a keynote speech to attendees of the Carbon Market Insights conference, hosted by Point Carbon.

He noted that while “the President would need to have an epiphany to sign something this year,” Inslee was bullish that a bill could be signed within a year’s time.

Inslee’s comments come at a time when the notion of carbon trading in the United States is gaining rapid momentum, and follow the unveiling last week of a bipartisan cap-and-trade bill devised by Independent Senator Joe Lieberman and Republican Senator John Warner.

“American’s Climate Security Act of 2007” aims to cut US greenhouse gas emissions by 15% below 2005 levels by 2020 and calls for 51% of the emissions allowances to be auctioned to emitters in the power and industry sectors from the trading scheme’s foreseen start in 2012, increasing to 100% by 2036.

Observers in Washington regard the bill to be the front runner with which to drive domestic climate change policy.

In his speech, Inslee also stated that the majority of carbon dioxide allowances should be auctioned under a US cap-and-trade program to raise money for clean energy technology development.

When asked if such an auction process might be perceived by industry as a stealth tax, Inslee said that he believed that it should instead be seen as a form of “royalty payment.”

"If a mining company comes into your state and takes the gold, they have to pay," he said, adding that the "sky is a community resource," in reference to demonstrators who briefly took the stage before his keynote speech to protest at the commoditization of the environment.

Inslee added that companies emitting C02 into the atmosphere “are using up a scarce resource and they ought to pay for it."

Elsewhere, James Cameron, vice chairman of environmental investment banking group Climate Change Capital, called for market participants to do a better job of convincing the public and politicians that any wealth generated by carbon trading was “a wealth worth having.”

“The message of what the carbon markets can bring to the environment is not getting through,” he noted, claiming that terms such as “offsets” had negative connotations with a public suspicious of the motivation of market participants.

“We need to think more about a prize worth striving towards that’s both environmental and economic,” he said.