Less than a year ago, cap and trade was the policy of choice for tackling climate change.
Environmental groups and their foes in industry joined hands to embrace the approach, a market-driven system that sets a ceiling on global warming pollution while allowing companies to trade permits to meet it. President Obama praised it by name in his first budget, and the authors of the House climate and energy bill passed last June largely built their measure around it.
Today, the concept is in wide disrepute, with opponents effectively branding it “cap and tax,” and Tea Party followers using it as a symbol of much of what they say is wrong with Washington.
Mr. Obama dropped all mention of cap and trade from his current budget. And the sponsors of a Senate climate bill likely to be introduced in April, now that Congress is moving past health care, dare not speak its name.
“I don’t know what ‘cap and trade’ means,” Senator John F. Kerry, Democrat of Massachusetts, said last fall in introducing his original climate change plan.
Mr. Kerry’s partner in promoting global warming legislation, Senator Lindsey Graham, Republican of South Carolina, pronounced economywide cap and trade dead last month and has since been working with Mr. Kerry to try to patch together a bill that satisfies the diverse economic, regional and ideological interests of the Senate.
That plan, still being written, will include a cap on greenhouse gas emissions only for utilities, at least at first, with other industries phased in perhaps years later. It is also said to include a modest tax on gasoline, diesel fuel and aviation fuel, accompanied by new incentives for oil and gas drilling, nuclear power plant construction, carbon capture and storage, and renewable energy sources like wind and solar.
Why did cap and trade die? The short answer is that it was done in by the weak economy, the Wall Street meltdown, determined industry opposition and its own complexity.