Shifting gears on the cap-and-trade debate is the latest proposed approach for reducing greenhouse gas emissions in the U.S. by decoupling the major emitters: utilities, industry, and transportation. The latter would be addressed through a "linked-carbon fee" on transportation fuels. That is, a gasoline carbon tax, but also on aviation fuel and diesel. While details are still forthcoming, on the surface there’s a lot to like. The transportation sector is one the largest contributors of GHGs in the U.S. today so any strategy to reduce emissions will have to start there.
Details about the forthcoming Senate climate bill are still scarce, alas. As mentioned earlier, the hot rumor of late is that Kerry, Graham, and Lieberman are planning to unveil a plan that would have a cap-and-trade system for emissions from electric utilities and then a separate "carbon fee" for oil and other transportation fuels, with the revenue either getting funneled back to consumers or used for projects that reduce oil consumption. And there are even some signs that this strategy could boost the bill's chances of passage.
Over the weekend, The Washington Post reported that John Kerry, Lindsey Graham, and Joe Lieberman are preparing to unveil their much-discussed Senate climate bill in the next few weeks. The eye-opening twist, though, is that their bill probably won’t include a single cap-and-trade program for the entire economy. Instead, it would include different types of pollution controls for different sectors.