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Senate staff may rethink proposals on offsets in cap-and-trade bill

PointCarbon, December 10, 2007


Plans by US companies to use offsets from the international carbon market may prompt the authors of the main senate climate bill to allow purchases of foreign credits, Congressional staff told Point Carbon today.

At present the cap-and-trade programme in the Lieberman-Warner bill, a climate change proposal that will go to a vote next year in the senate, would not allow US companies to purchase credits from international carbon reduction projects in developing countries to comply with the their emissions limits.

But staff from the offices of the bill’s authors, Senators Lieberman and Warner, told Point Carbon at the sidelines of the UN climate conference in Bali that the level of interest in global carbon markets they witnessed first hand at the UN negotiations may prompt a re-think of the proposal’s international credit provisions.


“I didn’t realise until a lot of regulated emitters at this conference brought it up – until we got these questions – that this was so big an issue,” said Chelsea Maxwell of Warner’s office after a panel discussion on their bill at the UN climate summit in Bali, Indonesia.

Andrei Marcu, president of the International Emissions Trading Organisation (Ieta), had asked Maxwell and other senate staff what it would take to include credits from the Kyoto protocol’s clean development mechanism (CDM) in the bill.

In its current state the bill only allows offsets – particularly from agriculture and forestry projects – to be sourced domestically.

“What we want is to have a global market” Marcu told the staffers. “I find inside the US a strong opposition to foreign markets,” he added, asking what it would take to get “public political acceptance of international offsets within US cap-and-trade.”

David McIntosh of Lieberman’s office said the ability to buy CDM credits had not been a high priority for many of the stakeholders with whom he has discussed the bill.

“It will take that the companies who want (to be able to buy CDM credits) put it high up on their task list. Many have instead focussed on other requests, such as the allocation system and auctions versus free allocation,” he said.

“We in the US are not going to do anything that loses more votes than it gains us. It will take lobbying pressure, frankly,” he added.

But Lisa Jacobsen of the US Business Council for Sustainable Energy confirmed that companies and organisations lobbying for cap-and-trade have prioritised issues such as how allowance value is transferred, seeing offsets – especially international ones – as just another method to lower compliance costs.

She added that witnessing the size of the international carbon market firsthand at the UN summit may influence the staff’s advice to their bosses back home.

“The good part of having them here is getting them exposed to the international process,” she said, referring to the multilateral negotiations where global carbon markets play a central role.



Senate  staff  may  rethink  proposals  in  cap-and - trade  bill