Interview: Making Greenhouse Gases a Commodity

  • (Photo courtesy of the EPA)

We can expect Congress will take up a carbon

cap-and-trade bill soon. That would make

greenhouse gases a commodity. The United

States Climate Action Partnership wants to

know the rules of the carbon trading game

sooner rather than later. US CAP is made

up of businesses such as GE, automakers,

some power companies and environmental groups.

Other business leaders say a carbon cap-and-trade

program will only increase the cost of everything.

Dan Lashoff is with the Natural Resources Defense

Council, one of the US CAP members.

The Environment Report’s Lester Graham asked him

why the companies in US CAP would want Congress

to come up with a cap-and-trade program now?

Transcript

We can expect Congress will take up a carbon

cap-and-trade bill soon. That would make

greenhouse gases a commodity. The United

States Climate Action Partnership wants to

know the rules of the carbon trading game

sooner rather than later. US CAP is made

up of businesses such as GE, automakers,

some power companies and environmental groups.

Other business leaders say a carbon cap-and-trade

program will only increase the cost of everything.

Dan Lashoff is with the Natural Resources Defense

Council, one of the US CAP members.

The Environment Report’s Lester Graham asked him

why the companies in US CAP would want Congress

to come up with a cap-and-trade program now?

Dan Lashoff: The opportunity that we have, right now, is to, first of all, invest
billions of dollars in the economic stimulus package – which the Congress will be
taking up in the next couple of weeks, that President Obama has made clear he
wants to see a substantial portion of that investment go into clean energy
technologies: insulating homes, building a smart grid to carry renewable energy
around the country. So, there’s an immediate step that needs to take place to
get investment flowing, to jump-start the green energy economy that we need.
That should be quickly followed with the type of comprehensive climate policy
that US CAP has called for, because that will guide longer-term investments, it
will mobilize private capital that is needed to build the clean energy future that we
need to have. And that will put people to work installing wind turbines, installing
solar systems, insulating homes, insulating schools. And keep the investment
flowing, and actually create an export opportunity for companies that are making
clean and efficient energy systems that the world is going to increasingly
demand.

Lester Graham: President Obama has talked a lot about the green economy and
green-collar jobs that you just mentioned, but will those jobs actually offset the
economic pain that a cap-and-trade program is expected to cause?

Lashoff: Well, first of all, you have to realize, if we passed a cap-and-trade bill
tomorrow, the actual limits would not kick in until 2012 at the earliest, and, by that
time, hopefully, the economy is really moving forward. So, what the value of
passing the legislation now is that it sets the long-term agenda, it sets the
strategic agenda that’s going to reduce our emissions, and it mobilizes
investment flows. The actual price signal that is needed to discourage global
warming pollution actually wouldn’t kick in for a couple of years, and that actually
works quite well with the timing, that is appropriate given the current economic
crisis.

Graham: The 80% emissions reduction below 2005 levels by 2050 is exactly
what President Obama has suggested we do, but there still are enough
Republicans who hold enough seats in the Senate to block cap-and-trade if they
wanted to. What are the chances of having legislation like this passed?

Lashoff: Well, I’m very optimistic that with the momentum that the US CAP
proposal delivers, the strong business support from at least a significant portion
of the business community, certainly not universal, that we can move forward. It
certainly will require a bi-partisan effort. There will need to be Republicans
joining the Democratic majority in the Senate as well as in the House to enact
legislation. I think we can do that. I think that this proposal provides a lot of
insight into the types of provisions, in addition to the cap itself. Things like
energy efficiency investments that will hold down the costs for consumers,
approaches to dealing with concerns of the economic impact – that chose a
pathway to get legislation enacted, hopefully in 2009.

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