Cap and Trade is Major Feature of Energy Bill

The bill aims to summon the country "to face one of the great challenges of our time” by reducing dependence on foreign oil and promoting clean energy technology.

One key part of the bill is the establishment of nationwide “cap-and-trade” system.

Cap and trade sets limits on air pollutants

	Governor Sarah Palin has opposed a cap-and-trade system, arguing that states should tap into their natural energy resources instead.

Under a cap-and-trade system, the government sets limits on the amount of harmful greenhouse gas emissions factories can release into the atmosphere. Each company is issued credits permitting a certain amount of pollution. If a company’s emissions exceed the cap, they must purchase credits from companies that emit less.

The Obama administration projects that such a system will reduce America’s emissions by 80 percent by the year 2050. 

“A cap-and-trade system is a tried-and-true mechanism that we use right now to control the pollution that causes acid rain,” Daniel Weiss of the Center for American Progress argued on the NewsHour.

This proposal has also drawn significant criticism.

“We've seen it operate in Europe, and it caused price increases in Europe, it caused job-shedding in Europe, and we still haven't seen any environmental benefit from that. In fact, CO-2 has gone up in Europe," Karen Harbert of the U.S. Chamber of Commerce told the NewsHour. 

Shortly after announcing her intention to resign her post as governor of Alaska, Sarah Palin, viewed by many as a contender for the 2012 Republican presidential nomination, wrote in a Washington Post op-ed that she is "deeply concerned about President Obama's cap-and-trade energy plan" because it will raise everyone's electricity bills.

"I believe it is an enormous threat to our economy,” Palin said. 

Climate change bill passes House of Representatives

	Many representatives who voted against the energy bill hail from districts that depend on manufacturing for revenue and jobs.

On June 26, the House of Representatives passed ACES with 219 members voting in its favor, 212 against and three members abstaining. 

Before it got to the House floor, it had to be approved by the House Energy and Commerce Committee.

Before it can be signed into law, the bill must be debated and successfully passed by the Senate.

“This is a long, long process,” Dina Cappiello, an Associated Press reporter told the NewsHour.

"But the hope is, from the administration and from Democrats in Congress, to get this done by the end of the year, because in December the nations meet in Copenhagen to actually work out an international climate treaty.” 

Kyoto Protocol debate set for December

	Former vice president and environmental activist Al Gore unsuccessfully urged Congress to ratify the Kyoto Protocol in the 1990s.

On Dec. 11, 1997, a major international environmental treaty designed to limit emissions of greenhouse gases around the globe was signed in Kyoto, Japan.

The Kyoto Protocol, as it’s known, has been ratified by 183 countries. The United States signed the treaty, a symbolic gesture, but has never ratified it and so has not had to abide by the limits it set.

A new international treaty to address climate change will be considered this December at the United Nations Climate Change Conference in Copenhagen, Denmark. The Obama administration argues that passage of ACES would send a signal that the United States intends to participate more fully in a global effort to lower greenhouse gas emissions. 

European and regional trading schemes

	Pollutants emitted from power plants can endanger the environmental conditions of neighboring communities.

The European Union's Emissions Trading Scheme, which began operating in 2005, is the most developed cap-and-trade system in the world. 

Though no nationwide cap-and-trade system currently exists in the United States, some regional arrangements have been established. 

The first major interstate effort to control carbon dioxide emissions is the Regional Greenhouse Gas Initiative. Ten states on the East Coast established a mandatory cap-and-trade system with a goal to reduce carbon dioxide emissions from power plants by 10 percent by 2018. Those states were Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. 

On the West Coast, a similar program is in the works to begin in 2012 with the hope of lowering emissions 15 percent of 2005 levels by 2020. Known as the Western Climate Initiative, the agreement includes seven U.S. states and four Canadian provinces.

Yet another planned market-based emission-fighting system, the Midwestern Greenhouse Gas Reduction Accord, would include Minnesota, Wisconsin, Illinois, Iowa, Michigan, Kansas and the Canadian province of Manitoba.