Financial Regulatory Forum

COLUMN – Massachusetts election kills U.S. cap-and-trade: John Kemp

– John Kemp is a Reuters columnist. The views expressed are his own –

By John Kemp

LONDON, Jan 20 (Reuters) – The Republican Party’s stunning special election victory in deep-blue Massachusetts has killed any lingering prospect of passing U.S. cap-and-trade legislation in 2010, and with it international negotiations to produce a binding climate accord before the end of the year.

With no chance of U.S. action in the short term, emerging markets such as China and India are under no pressure to accept mandatory emissions reduction targets. If climate legislation is eventually revived in the United States, in 2011 or beyond, it may come back in the form of a carbon tax rather than a permit trading programme.

TO RETREAT OR REINFORCE?

Perhaps the most important decision any general has to make is when to stand and fight, and when to beat a retreat in order to fight another day. The Massachusetts special election to fill the Senate seat left open by the death of Edward Kennedy confronts President Barack Obama with a similar strategic choice.

The administration can stick to its existing agenda and hope economic recovery comes in time to save the Democratic Party from heavy defeat at the mid-term elections in November. But with the loss of the crucial sixtieth vote in the Senate, much of that agenda now appears destined to sink into the upper chamber’s legislation swamp.

US EPA moves on emissions as Congress stalls

U.S. Environmental Protection Agency Director Lisa Jackson announces a new Obama administration position that greenhouse gasses are a threat to public health at the EPA in Washington, December 7, 2009. REUTERS/Jonathan Ernst  By Timothy Gardner

WASHINGTON, Dec 7 (Reuters) – The U.S. Environmental Protection Agency on Monday cleared the way for regulation of greenhouse gases without new laws passed by Congress, reflecting President Barack Obama’s commitment to act on climate change as a major summit opened in Copenhagen. 

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