Guest blogger Dale Gabbert heads the funds group in the London office of law firm Reed Smith. His practice covers hedge funds, private equity and property funds and he is the author of Hedge Funds, a legal guide published by Butterworths Lexis Nexis.
Democrats floated big plans to tackle climate change proposals in the U.S. Congress this week but realistically there will be much more hot air — both from industry and politicians — before this bill is turned into law.
The draft legislation, running hundreds of pages, will now be considered by the House Energy and Commerce Committee in coming weeks along with all manner of panels. And, oh yes, the Senate, home of the filibuster, will also get to weigh in.
At the heart of of the legislation is Cap and Trade — a panacea for those who believe greenhouse gas emissions are warming the planet to dangerous levels and a boon to those who think the sinking economy makes this the dumbest time to anchor industry with more costs.
“This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution,” said House Energy and Commerce Committee Chairman Henry Waxman.
Sounds good but Waxman is a Democrat from California, where these ideas are more readily embraced.
Listen to what a guy from Texas thinks: “Tuesday’s cap and trade bill marks a triumph of fear over good sense and science and it couldn’t come at a worse time because it proposes to save the planet by sacrificing the economy,” said Representative Joe Barton, the senior Republican on the energy and commerce panel.
In a cap and trade system, power plants and other industries would need permits for every ton of carbon dioxide they emit. Unused permits could be sold to other companies, but overall emissions would gradually drop.
Under the proposal that uses 2005 as a base year, U.S. carbon emissions would have to be reduced by 20 percent by 2020, 42 percent by 2030 and 83 percent by 2050. Those goals are a tad more aggressive than what President Barack Obama had proposed.
Now let the games begin. Very few seem ready to predict when a climate change bill will pass but most say it won’t be this year — especially if Democrats in Congress decide to give Obama’s health care plans the priority.
So there certainly will be a lot more talk, much of it heated. And one other thing is for certain: each yearly delay will mean the United States, as the world’s largest emitter, will spew another 6 billion tonnes of carbon dioxide into the atmosphere.