Second-Best World

Trading Carbon

May 2010

By Kyle Danish and Tomás Carbonell

As each month goes by without action by the US Congress, the possibility grows that the near-term federal regulatory regime for carbon in the US will be the Clean Air Act.

It wasn’t supposed to happen this way. When President Barack Obama’s administration took office in January 2009, part of the legacy it inherited from the previous administration was an April 2007 decision by the Supreme Court, Massachusetts versus EPA (Environmental Protection Agency). Most observers had  already concluded that Massachusetts effectively required the EPA to start regulating greenhouse gas (GHG) emissions under the federal Clean Air Act.

From the beginning, however, the Obama EPA made clear that it was a reluctant regulator. The President announced his strong preference for Congress to occupy the field by enacting a comprehensive cap-and-trade programme for GHG emissions, and the EPA has moved at a relatively deliberate pace to roll out its regulatory programme.

This approach reflected a broadly-held view that the Clean Air Act is ill-suited to addressing climate change.


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This article first appeared in the May 2010 issue of Trading Carbon magazine. For further information please visit


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