US ready to take carbon mantle

WASHINGTON (Reuters) - Steps President Barack Obama has taken on climate and clean energy have shown that the United States is getting ready to lead the world in fighting global warming, a White House official said on Tuesday.

A resident rides a bicycle past a chemical factory in China in this February 25, 2009 file photo. REUTERS/Stringer (CHINA).

“The administration is signaling to the rest of the world that the United States is ready to assume leadership in helping to bring the world together and reduce our greenhouse gas emissions and protect the planet,” Nancy Sutley, chair of the White House’s Council on Environmental Quality, told a carbon trade conference.

Delegates from nearly 200 countries are trying to agree by the end of the year on a successor to the Kyoto Protocol on global warming. The goal is an agreement that requires both rich countries and rapidly developing countries like China and India to take measurable actions to fight climate change. The United States and China are the world’s two biggest carbon emitters.

Obama has pushed for U.S. greenhouse gas emissions cuts of 14 percent from 2005 levels by 2020 and more than 80 percent from that level by 2050. His stimulus bill devoted billions of dollars to clean energy, and the Environmental Protection Agency has proposed a system for big carbon polluters to report their emissions, a step toward regulating those gasses.

Sutley said cleaner energy and emissions reductions should help change the way the United States uses energy, which remains essentially the same as in the days of Thomas Edison and Henry Ford. This could help break the country’s dependence on foreign oil, she said.

U.S. Reps. Henry Waxman and Edward Markey late last month began circulating draft legislation that would launch a cap and trade market on greenhouse gases. The Democrats are seeking slightly tougher limits than Obama.

Chances are thin that the climate bill would be passed before the U.N. deadline to form a new global agreement at Copenhagen in December. A fight looms in the Senate, where supporters do not have the 60 votes required to break a likely filibuster. Passing a climate bill that could eventually raise energy prices will be a challenge during a recession, analysts have said.

The House bill did not address one of the most contested aspects of a cap-and-trade program -- how to initially distribute tradeble credits that allow companies to pollute.

Obama has said he favors auctioning 100 percent of those credits to business, instead of giving them away. This would raise hundreds of billions of dollars to fund clean energy programs and give tax breaks to greener companies. But some, including big polluters such as coal-burning power plants, say the costs of 100 percent auctions would be too great.

Obama has indicated willingness to compromise on the percentage of the credits that are auctioned.

Sutley said turmoil in financial markets has shown that a cap and trade market needs strong market oversight.

The House legislation suggested that the Federal Energy Regulator Commission would regulate aspects of a national carbon market. Many carbon brokers would prefer the Commodity Futures Trading Commission regulate the market. Sutley said the White House has not decided which agency should do the job.

Reporting by Timothy Gardner; Editing by David Gregorio