Friday, February 13, 2009

Economic crisis to delay U.S. carbon trading?

In more recent comments Chu is open to considering a carbon tax, rather than cap and trade, a good thing perhaps.

More importantly perhaps he seems to indicate that the current economic crisis will delay either cap and trade or other carbon pricing mechanisms.

He said that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.

Dr. Chu said reaching agreement on legislation to combat climate change would be difficult in the current recession because any scheme to regulate greenhouse gas emissions would probably cause energy prices to rise and drive manufacturing jobs to countries where energy is cheaper.

“The concern about cap-and-trade in today’s economic climate,” Dr. Chu said, “is that a lot of money might flow to developing countries in a way that might not be completely politically sellable.”

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