Intensive negotiations go on behind the scenes in the U.S. Senate, as focus turns toward climate change legislation during the course of 2010. The House of Representatives may have narrowly passed the American Clean Energy and Security Act in 2009, but the intensive cap and trade program contained therein did not meet with much favor on the other side of Capitol Hill.

Under new initiatives posed by a Republican Senator (Graham), a Democrat (Kerry) and Washington’s only independent (Lieberman), power companies would be forced to buy and sell their “rights” to pollute within a new carbon market, with oil companies expected to pay fixed fees for their emissions. This is essentially a hybrid utility carbon market, which is another angle for consideration by legislators.

Historically, the issue of climate change has been very contentious across the political divide and few observers expect the Senate to be able to advance climate change legislation without a serious fight during 2010. Many expect the looming political elections in November to temper activity and that little will be effectively done until the 2011 congressional sessions.

Many argue that widespread support for controversial “cap and trade” legislation has waned somewhat, especially as political attention was focused on health care issues during almost all of 2009. Many were disappointed by the lack of results emanating from the Copenhagen Summit and environmentalists continue to warn us that we can ill afford to stall and must pay clear attention to the introduction of carbon market forces.

As seems to be always the case, complications within a legislative bill could threaten the outcome of the overall legislation itself. Here we see that initiatives encouraging offshore oil and gas drilling within overall climate legislation are problematic and Senators representing states that are directly affected by such issues are up in arms.

If the Senate can move beyond such issues as whether to allow offshore oil drilling or not, they could enact a provision that develops the carbon market for power companies and oil companies. The oil companies themselves would pay a fixed fee for emissions and this would be linked to the price of carbon dioxide allowances that the power companies are responsible for. Such calculations would be tied to what is felt to be fair within an overall carbon market.

Political minefields proliferate, but yet there is a growing feeling that some form of carbon market will emerge at the end of the process. Companies across the country and around the world know that they will be affected and the more forward thinking organizations are already looking at their daily operations to see how they can make a difference. They must reduce their energy usage and by tempering their carbon emissions will also be seen as being more sustainable from a public perspective.

Activity from the cross party group of senators is now accelerating, as they seek to help introduce a workable trading scheme for the carbon market ahead. As this exploration continues, industry groups including Chambers of Commerce and bodies representing electricity and utility production companies are becoming more actively involved.

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categories: carbon emissions,environmental damage,climate change,climate,environment