NCPA - National Center for Policy Analysis


February 27, 2009

Will a cap-and-trade system, the centerpiece in President Obama's budget, really manage to address climate change and end U.S addiction to oil?  Well, it depends whom you ask, says the Washington Examiner.  

A new report from the National Center for Policy Analysis in Dallas, for example, states that there has been little indication that cap-and trade will lower emissions:

  • These programs have not lowered overall emissions in developed countries.
  • In the European Union emissions of carbon dioxide have gone up, not down.
  • By contrast, CO2 emission in the United States which did not ratify the Kyoto treaty, have grown much more slowly than in the EU, even declining in 2006.


  • Although greenhouse gas emissions per capita vary widely among European countries, the recent years increase has only been in the EU-12.
  • According to the European Environment Agency average per capita emissions decreased in EU-27 between 1990 and 2006.

But will a cap-and-trade system end U.S addiction to oil?  President Obama estimates that the program will fund vital investments in clean energy, totaling $150 billion over 10 years starting in 2012.

Not likely, says the Examiner:

  • A report by the World Economic Forum finds that at least for the next decades or so, carbon prices alone will be insufficient to prompt a large-scale roll out of renewable energy.
  • Nor will the prices be sufficient to promote carbon capture and sequestration.

Source: Caroline Calais, "Cap-and-trade system insufficient to prompt renewable energy roll out, part 1 of 2," Washington Examiner, February 27, 2009.

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