M&Co. Report: Cap-and-Trade Bill Comparison

By Toby Hicks, Legislative Intern
Marlowe & Company Report
December 3, 2009

Until recently the U.S. has shown some of the strongest reluctance of all developed countries to lower its emissions. The common argument against doing so is that it would decrease the U.S.’s international competitive ability. This resistance was most prominently illustrated when, despite becoming a signatory to the Kyoto Protocol, the U.S. decided not to ratify the treaty and be bound by its cap-and-trade system. Cap-and-trade is where a limit to overall U.S. GHG production would be set and firms then compete for the rights to emit portions of it. Subsequent legislative efforts to enact a broad cap-and-trade bill in the U.S. have been blocked in Congress. Now however, two bills – H.R. 2454 the American Clean Energy and Security Act of 2009, and S. 1733 the Clean Energy Jobs and American Power Act – are being examined by Congress and may be synthesized into law. H.R. 2454 was passed by the House on June 26, 2009 and is currently awaiting Senate action.

Although there are significant differences between the two bills, their goal of causing a significant reduction in GHG emissions through enactment of a cap-and-trade system is identical. If passed, either bill’s impact on local governments would be profound. Restrictions on GHG production will affect many types of commercial firms and, therefore, tax revenues and jobs within towns and cities.

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