China is showing interest in starting cap-and-trade programs for greenhouse gases amid a “very uncertain” outlook for a national carbon market in the U.S., according to the chief of the Intercontinental Exchange Inc.
“Tremendous discussion and movement towards more carbon trading is coming out of China,” Jeff Sprecher, chief executive officer of the Atlanta-based company, said on a conference call today.
Intercontinental, the second-largest U.S. futures market, acquired carbon-trading hubs in Chicago and London when it bought Climate Exchange Plc in July.
China’s government is examining carbon and energy-usage caps for “major industrial cities,” Sprecher said. The interest in pollution trading isn’t the result of United Nations negotiations over a new treaty to curb the greenhouse gases scientists have linked to climate change, he said.
“It’s really being driven by the government wanting to allocate energy resources and deal with local pollution issues,” Sprecher said. By comparison, “there’s a very uncertain U.S. regulatory appetite for cap-and-trade.”
Cap-and-trade programs, in which companies buy and sell carbon dioxide pollution rights, already operate in Europe and in a 10-state region of the U.S. Northeast. Some western U.S. states, led by California, may join Canadian provinces to start their own trading bloc in 2012.
The U.S. House of Representatives, with the support of President Barack Obama, passed cap-and-trade legislation last year that called for a 17 percent emissions cut from the 2005 level by 2020.
Legislation Stalls
The measure later stalled amid criticism from Senate Republicans and some Democrats that it would make fossil fuels such as coal and oil more expensive to use and slow the U.S. economy’s recovery from the worst recession since the Great Depression.
Senate Majority Leader Harry Reid, a Nevada Democrat, said in September the proposal won’t pass this year. Republicans in the U.S. House of Representatives have said they will block cap-and-trade legislation, which they describe as a “national energy tax,” if they win a majority of seats in tomorrow’s midterm elections.
