By Simon Lomax
April 6 (Bloomberg) — The overhaul of U.S. regulations for Wall Street may help build support to create a federal cap-and- trade market for greenhouse gases, an Obama administration energy adviser said.
Prospects for a market, in which companies would buy and sell a limited number of pollution rights, were “undermined” by the financial crisis following the 2008 bankruptcy of Lehman Brothers Holdings Inc., according to Joseph Aldy, an energy and economic adviser to President Barack Obama. Cap-and-trade “has become a dirty word” in the debate over legislation to limit emissions linked to global warming, Aldy said today.
Obama is pressing Congress to pass the biggest restructuring of financial regulations in seven decades. The outcome of the debate over laws to govern financial companies will have “implications for how we think about markets for carbon,” Aldy said at a Washington conference hosted by the Energy Information Administration.
If the debate gives Obama what he seeks, new regulations for financial companies will “address some of the questions and concerns” lawmakers have about “creating a new market for carbon,” Aldy said.
Legislation to establish a cap-and-trade program for power plants, oil refineries, factories and other industrial polluters narrowly passed the House of Representatives last June. A similar plan, approved by the Senate Environment and Public Works Committee in November over a Republican boycott, failed to advance.
Senators led by Massachusetts Democrat John Kerry are revamping the legislation in hopes of winning bipartisan support and plan to unveil their new proposal later this month.
–Editors: Steve Geimann, Larry Liebert
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