Cap-and-Trade: The Next Best Stimulus?

Politico's Morning Energy has an interesting section this morning from the Glover Park Group's Joe Lockhart. In an email sent out this morning, Lockhart suggested that a utility-first cap-and-trade system could take the place of a phased-out stimulus. Due to regulatory uncertainty, Lockhart writes, private companies are sitting on $1.8 trillion in cash. If Congress moves on a climate bill and these companies can plan for their futures, they will be more likely to mobilize these funds. Such an injection of cash could energize the economy just as the stimulus fades away and leaves states in a tough spot:

The US stimulus bill has an end date that's approaching fast, and other governments are tightening fiscal and monetary policy (see http://bit.ly/9TBJUu). We're rapidly approaching the end-date of our near-term economic solutions - and it's not clear that we have a policy to get private dollars moving again once those solutions end. That makes movement on a utility-first cap on carbon emissions essential. The U.S. utility sector is holding up billions in job-creating capital that won't flow to new energy projects without certainty on their future environmental obligations. Major utility leaders want that certainty - want a utility cap - so they can make the investments and collect the returns.

Read the full story at Politico.

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Nicole Allan is a former senior editor at The Atlantic.

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