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US carbon market and the expected federal cap and trade scheme |
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Adoption of US Senate's Lieberman-Warner Climate Security Act will create world's largest carbon market. It would surpass the European cap-and-trade emissions trading system by a big margin.
US carbon market
US carbon market is estimated to be worth around $240 million. Value of US carbon market is predicted to cross $1 trillion by 2020. US policymaker are moving towards a cap-and-trade system that may create world's largest carbon trading market. As of now, European Union's Emissions Trading Scheme provides largest carbon trading marketplace.
Cap-and-trade system
Under US' cap-and-trade system, the government would regulate emission of greenhouse gases by businesses. A permit would be issued to businesses stipulating a measure beyond which greenhouse gases should not be emitted.
But if a business requires allowance of additional emissions, it can buy emission allowances from other businesses that have excess of it. This cap-and-trade system is not any different from the existing US system for emission of sulfur oxide and nitrogen oxide compounds.
Buyers of carbon and greenhouse gas credits
Large emitters of greenhouse gases are likely to become major buyers of carbon and greenhouse gas credits. This will include petroleum refiners, coal-burning power utilities, and heavy industries.
Viewpoint of US presidential candidates
Both Democrats and Republicans agree over the necessity of a domestic trading emission system. It is generally believed that adoption of trading emission system will reduce greenhouse gas emission figures by 60-80 percent by 2050. Both Barack Obama and John McCain have support measures for reducing emission of greenhouse gases.
Role of George Bush
George Bush has been rejecting all efforts to impose a federal cap on greenhouse gases emitted by businesses within the country. For obvious reasons this has not gone down well with world environment experts. Some of them believe that lack of interest in imposing a federal cap has led to a situation where US had to experience severe storms, droughts and other problems.
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