Felix Salmon

Whither cap-and-trade? An IM exchange

By Felix Salmon
June 12, 2009

One of the great things about working for Reuters is that I get to pester journalists who actually know what they’re talking about. So after reading Timothy Gardner’s story on the cap-and-trade bill today, I got him on IM, and learned a lot — not least that Waxman-Markey is being considered more of an all-encompassing energy bill, as opposed to simply a way of creating a cap-and-trade scheme. Which on the one hand means that it can be loaded up with enough pork to make it pass, but on the other hand makes everything much more complicated:

Felix Salmon: Your headline says that a cap-and-trade bill is “more likely” in 2010 than in 2009, is that right? And is this a new development?

Timothy Gardner: Well I think a lot of people who are watching Congress closely believe the stars are aligned like never before for action from the U.S. on climate. The EPA has proposed that greenhouse gases are a danger to human health, Obama has set new CAFE standards for vehicles and he also supports a cap and trade market.

TG: But I think too that NGOs, and carbon market developers like the International Emissions Trading Assocation, are beginning to realize that in a lot of ways the compromises have just begun. It’s not new that many people think the bill wont be completed unitl sometime next year. But the complexity of the many of the issues including what to do about nuclear, which is not addressed very much in the bill, and reframing the costs of putting a price on carbon during the recession, are new. The head of the IETA office in Washington, who worked on the Hill for 9 years on climate, said today “there’s not a snowball’s chance in hell” that the bill will pass this year.

FS: Yikes.

TG: There’s still a lot of optimism out there especially because now the White House supports forming a carbon market.

FS: But that was the other thing I wanted to ask you about — this nuclear thing

FS: Obvs nuclear energy has zero carbon emissions, right? So it will benefit from any cap-and-trade bill?

FS: But your story seems to imply that there might be something in the bill to scale back nuclear energy?

TG: Well, it’s close to zero emissions because you would have to build new plants and mine the uranium and dispose the waste. But yes it could benefit from a cap and trade bill but so far it has mostly left out of the process.

TG: I didn’t mean to imply that it would be scaled back. It’s just that any benefit it would get from cap and trade would have to be balanced with a program on what to do with the waste since storing it at Yucca Mountain has run into so many problems.

FS: I’m confused about this. Surely questions about what to do with nuclear waste are questions about what to do with nuclear waste whether or not there’s a cap-and-trade scheme, right? Why should those questions be addressed in a cap-and-trade bill?

TG: Nuclear doesnt necessarily have to be addressed in the Waxman bill, it could be addressed in another bill in parallell, but that could take time

TG: But the bill is first and foremost an energy bill, not just a cap and trade bill. So from what I’m hearing some Senators are looking for funds and loan guarantees to build new nuclear plants. If they get that there would probably have to be some kind of deal or plan on what to do with nuclear waste as well.

TG: It costs $3 to $5 billion to build a nuclear plant, so to build one will take time

FS: Hobbling carbon-derived energy isn’t enough for these guys? They need extra pork for nuclear energy on top?

TG: If the Senate wants to gain a few votes to get to the required 60, particularly if Al Franken doesn’t make it in. There are still more than 20 iffy Democrat Senators and quite a few Republicans that could go either way

FS: Wow, sounds like this is going to end up with more pork than David Chang festival. Thanks for your time!

7 comments so far | RSS Comments RSS


If we pass this bill, we are going to need nuclear power plants to replace new and/or old fossil fuel plants. Wind and/or Solar will be unable to pick up the slack for quite some time.

To pass the bill without planning for more nukes and disposal of their waste would be irresponsible.

In addition to financial incentives, we are going to have to pass laws that allow construction to happen without wasting decades/money in constant litigation with anti-nuke activists.

BTW – if they wanted to replace the dirty oil and coal plants in my state with a brand new nukes, I would be very happy camper.

Posted by Brad Ford | Report as abusive

> the costs of putting a price on carbon during the recession

This is one big advantage of cap-and-trade over a carbon tax; given a targeted curb on emissions, the price of carbon will be lower in an economy that is underperforming expectations under cap-and-trade, and higher in an economy that is overperforming, than under a pre-set tax. It’s countercyclical. Because the economy is weak right now, carbon use will be coming down anyway.

I’ve become convinced that the current Waxman-Markey is worse than nothing, though. Once cap-and-trade is in place, with a given level of emissions, subsidies to various particular activities amount to incentivizing those activities at the expense of unsubsidized activities that result in exactly the same reduction (mostly, it’s my impression, conservation) — unless the price of carbon actually goes to 0, subsidizing biofuels doesn’t reduce emissions, because you still have the same binding cap. And this bill is just absolutely replete with this nonsense. Throw it away and start over.


No patriotic and informed American can support the global warming/cap and trade scam, more fraudulent than any Nigerian scam.

Cap and Trade “would be the equivalent of an atomic bomb directed at the U.S. economy—all without any scientific justification,” said famed climatologist Dr. S. Fred Singer. It would significantly increase taxes and the cost of energy, forcing many companies to close, thus increasing unemployment, poverty and dependence.

Cap and trade represents huge taxes and cost increases, which will hurt mostly the poor and the middle class. Cap and trade will give dictatorial powers to Obama and will further enrich his billionaire friends (Gore, Soros, Goldman Sachs, Obama’s Chicago Climate Exchange friends, GE, etc.) — all at our expense and at the expense of our children and grandchildren.

Those brainwashed to the point of wanting to destroy the economy to “prevent global warming” are behaving like the most primitive human beings who were duped into believing that human sacrifices would ensure them good weather. Human beings don’t have the power to control climate! And killing the economy will not help the environment. Poor countries can’t protect the environment. Just look at Haiti!

Posted by AntonioSosa | Report as abusive

An increasing number of scientists and thinking people all over the world are realizing that man-made global warming is a hoax that threatens our future and the future of our children because it’s being used for criminal scams, such as cap-and-trade.

More than 700 international scientists dissent over man-made global warming claims. They are now more than 13 times the number of UN scientists (52) who authored the media-hyped IPCC 2007 Summary for Policymakers. http://www.climatechangefraud.com/conten t/view/3562/218/

Additionally, more than 30,000 American scientists have signed onto a petition that states, “There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate.” http://www.petitionproject.org

We pray that honest leaders – both Democrat and Republican – are able to save us from Obama’s criminal global warming/cap-and-trade scam.

Posted by AntonioSosa | Report as abusive

NASA came out with the Goddard Study which states CO2 has nothing to with global warming and that climate change is caused by the Sun, so I don’t see why climate change is still an issue. The Weekly Standard has an online article explaining the failed failed theories of James Hansen, the ex-NASA Scientist who was not a meterologist and doesn’t know what he talking about. The article is call: The Man who cried Doom.

Posted by Terry Skipper | Report as abusive

Cap and TRADE(TAX) is ENRON forced onto everyone.

CAP and TRADE(TAX) puts the entire U.S. economy on the shoulders of the Chicago Climate Exchange(CCX)

Just say no to CAP and TRADE(TAX)!

Posted by Les Horn | Report as abusive

California CalEPA Secretary Linda Adams, signed a MOU with the UN in China on earth day. China gets about 50% of the world carbon tax and the China government gets a 50% tax of the credits.

** China goods and services may increase

** We pay the carbon tax and Pew Business Environmental Leadership Council (BELC) Member Companies: ABB, Air Products, Alcoa Inc., American Electric Power, Bank of America, BASF, Baxter International Inc., The Boeing Company, BP, California Portland Cement, CH2M HILL, Citi, Cummins Inc., Deere & Company, Deutsche Telekom, The Dow Chemical Company, DTE Energy, Duke Energy, DuPont, Entergy, Exelon, GE, Hewlett-Packard Company, Holcim (US) Inc., IBM, Intel, Interface Inc., Johnson Controls, Inc., Lockheed Martin, Marsh, Inc., Novartis, Ontario Power Generation, PG&E Corporation, PNM Resources, Rio Tinto, Rohm and Haas, Royal Dutch/Shell, SC Johnson, Toyota, TransAlta, United Technologies, Weyerhaeuser, Whirlpool Corporation, Wisconsin Energy Corporation and friends may all share in the public/private partnership of corporate and NGO welfare

Posted by Charlie Peters | Report as abusive

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