Yes, federal cap-and-trade legislation went down to defeat in 2010, along with most of Obama’s progressive agenda. The once-Republican idea instead morphed into a political kill phrase for the right-wing, which they successfully branded as both taxation and regulation in one big ball of awful. But as Politico points out, cap-and-trade is actually alive and well at the state level, and it could be poised for expansion with EPA’s coming rule to reduce greenhouse gases from coal-fired power plants. California launched — and will be expanding — its program to reduce greenhouse gases, while nine northeastern states take part in the Regional Greenhouse Gas Initiative (RGGI) trading program. As Politico notes:
Those ranks could grow because of EPA’s upcoming climate regulation, which is expected to give states wide latitude in how they reduce the greenhouse gas pollution from existing power plants.
If EPA, as expected, allows states to develop cap-and-trade programs to reduce carbon from their coal-fired power plant sector, then many states may begin setting up trading platforms that could go a long way to detoxifying the political attitude about cap-and-trade. And once the political opposition melts with the realization that the economy won’t crash with emissions credit trading, it will be politically and structurally easier to incorporate more sources under the cap. Eventually, with a strong network of states using cap-and-trade to minimize greenhouse gas emissions, the federal government may even find it politically safe to develop a national trading platform, with the state markets as a foundation.
Back in 2009, I opposed the cap-and-trade program developed in the federal Waxman-Markey bill because I thought it gave away too much to industry, while undercutting both California’s and EPA’s more promising efforts. While I’m disappointed the US didn’t act faster and better on climate change at the national scale, I’m hopeful that this state-by-state approach, prompted in part by long-overdue EPA action, and unfettered by the industry giveaways we saw at the federal level, will have a better chance of delivering sound policy and actual carbon reductions.