Cap and Trade Legislation Coming Closer to Fruition

Posted on 08.23.10

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The American Clean Act Energy and Security Act of 2009 passed in the U.S. House of Representatives.  The U.S. Senate has since constructed a similar bill.

The bill consists of a cap-and-trade system, in which greenhouse gas emissions in the United States would be reduced in an effort to encourage companies to use and develop renewable resources.

Under the cap-and-trade system, the federal government would apply limits, or caps, on the total volume of greenhouse gas emissions that U.S. companies could emit yearly.  Companies would have an allowance for each ton of greenhouse gas emitted.  These allowances can then be bought and sold among companies.

The National Association of Manufacturers opposed the original House bill, due to the threat of increased costs and regulation to American manufacturers and consumers.  The Association also expressed concerns that the Act could potentially cause severe competitive damage if the U.S. industry is the first to act, and other international manufacturing economies do not limit their own emissions. We will continue to monitor the proposed bill.