Obama may drop cap and trade to squeeze climate bill through congress

President Obama acknowledged this week that Congress may have to abandon
carbon trading measures to force an energy bill through to his desk.

But a day later Obama signalled that he still hoped that a bill with
cap and trade in it would pass and that three democratic senators – John
Kerry, Joe Lieberman and Lindsay Graham – were working hard on making that
a reality.

At a town hall session in Nashua, New Hampshire on Tuesday Obama said cap
and trade might have to be considered separately if the government is to
make headway on energy reform.

"We may be able to separate these things out. It's conceivable that that's
where the Senate ends up," said Obama.

But in the same session he then said cap and trade was still his preferred
solution.

"But the concept of incentivising clean energy so that it's the cheaper,
more effective kind of energy, is one that's been proven to work, and it's
a market-based approach," he said.

With China and India relying heavily on coal plants, he argued that the US
has to invest in technology that it can franchise to other countries if it
is to help make a difference globally.

The markets need a "price on pollution" to equalise the cost of fossil
fuels and clean energy, he continued, arguing that it would take up to
forty years before renewable energy sources could compete with polluting
technologies without factoring in the cost of pollution.

"No matter how good the technology is, if you're not factoring in the soot
that is going to be put in the atmosphere, then coal is going to be cheaper
for a long time," Obama warned.

And the next day Obama signaled his preference for a cap and trade solution
because it taxed emissions as well as rewarding clean energy development.

"I don't want us to just say the easy way out is for us to just give a
bunch of tax credits to clean energy companies. The market works best when
it responds to price," he said.