"In sum, we estimate that the United States is on track to achieve emissions reductions of 16.3 percent by 2020 relative to 2005 levels.
"Important uncertainties are associated with the current path of US emissions reduction efforts that would have been lessened with the passage of comprehensive climate legislation. To forecast what will happen next in the United States, one must consider two key touchstones. One is the California program. If the first planned auction happens in November 2012, then the program will almost certainly begin in January 2013, with big implications for the nation. It is likely to face various legal challenges, but for the most part it is expected to survive intact.
"Second is the finalization of the new source performance standard for electric steam boilers, which is expected early next year, and EPA's posture in the development of existing source standards. The existing source standards may be more stringent than the technical documents have identified. That is because it is a state-driven process in which states develop implementation plans for EPA's approval. Many states view this as an opportunity to strengthen and broaden the regional trading programs. The uncertainty about the issuance of these standards is a concern, but the legal requirements of the Clean Air Act are clear. A new administration could -- slow walk -- the regulatory development and delay it for years, but is unlikely to stop it altogether.
"Another possibility is the reversal of the Clean Air Act, or at least the removal of authority for enforcing the GHG rules. This seems far-fetched because it would require an unbalanced legislature and administration. However, a less extreme outcome could be for a new legislature and administration to defund the activities of EPA in developing these rules. This would delay the rules indefinitely.
"If the eventualities play out as they currently are aligned, we find that not only is President Obama's pledge in Copenhagen within reach, but emissions reductions within the domestic economy could actually be greater than would have occurred under comprehensive climate policy with cap and trade, as proposed by WaxmanMarkey. The reason is that a large portion of the emissions reductions that were expected under cap and trade would have been offsets, whereas many of the factors driving emissions reductions under the current Clean Air Act regime would have been effectively or explicitly preempted under cap and trade. . .
"In the short run, to the surprise of many, the United States appears able to meet its mitigation obligations under the Copenhagen agreement. In contrast, however, the United States seems off-course with respect to meeting its financing obligations under the agreement. Cap and trade provided a vehicle and incentive to direct private capital toward investment in developing countries through the purchase of emissions offsets. It also provided a source of funds for the federal government that could have supported the public fund contribution to the financing obligation. In contrast, under a regulatory approach, these avenues are not available. In particular, international offsets appear to be unavailable as a legal compliance instrument by which to meet GHG reduction standards under the Clean Air Act. The subnational cap-and-trade policies allow for international offsets, but their supply in those programs is limited. Private financing of energy development internationally is already extensive but generally could not be seen as an additional contribution to the outcome of US climate policy. In the absence of cap-and-trade policies in general, and an active offset market in particular, the United States is likely to have difficulty meeting its commitment to finance international investments."
32 Years of Environmental Reporting for serious Environmental Professionals