Speaking after Republicans won control of the House of Representatives, President Barack Obama has backed away from a cap-and-trade program saying he will work with Republicans on other ways to cut carbon emissions, reports Bloomberg Businessweek.
A cap-and-trade program was included in the climate bill passed by the House last year, but stalled in this year’s Senate. Peter Shattuck, a carbon-markets policy analyst at Environment Northeast, told Bloomberg News that prospects for a U.S. carbon market are “more remote than before the election because the vast majority of Republicans have opposed cap-and-trade proposals to date.”
According to the article, futures contracts in the U.S. Northeast’s carbon market fell to their lowest level in six weeks due to Obama’s comments. Regional Greenhouse Gas Initiative (RGGI) permits for December delivery fell 2 cents, or 1.1 percent, to $1.88 each on the Chicago Climate Futures Exchange. RGGI carbon prices have fallen 18 percent this year.
The RGGI auction of carbon dioxide allowances, held on Sept. 8, hit its lowest allowed level for allowance prices for the two-year old program, selling at $1.86 a ton. However, prices traded at $1.85 on Nov. 3, a record intraday low that was below the minimum allowable bid of $1.86 in carbon dioxide allowances.
Meanhwhile, the Chicago Climate Exchange (CCX) is set to close by year’s end. Although CCX commitments were set to
expire at the end of the year, those participating in the program thought it would have continued if there were any chance of climate change action, reports National Geographic.
Instead, the eight-year-old platform that enabled power companies, manufacturers, and others to reduce their greenhouse gas emissions and trade the credits they earned, will shut down at the end of this year, according to the article. Many in industry and the environmental community saw the CCX as a less costly approach for reducing greenhouse gases than regulations from Washington, D.C., with voluntary participation, reports National Geographic.
