When the US Congress unveiled a proposed national climate law for America last spring, the international community was left surprised and disappointed by its lack of ambition. "Handouts and loopholes" was the headline of The Economist story that summed it up best. "America's climate-change bill is weaker and worse than expected," the magazine declared.
The bill came as a sobering reality cheque, a comedown from the elation felt in climate circles at President Barack Obama's election. The law aims to reduce US emissions a mere four percent below 1990 levels by 2020, far short of both what the science demands and the European Union's reduction commitment of 20 percent. But the oddest thing about the so-called American Clean Energy and Security Act is that it sends its single most generous handout – more than USD 60 billion worth of free carbon credits – to the coal industry. Further, the fine print was even worse. It revealed that most of the proposed emissions cuts would likely come not from the actual reduction of industrial CO2 pollution in the US, but from a giant loophole that allowed for purchase of up to two billion tonnes of carbon 'offset' credits. Lawmakers had created a mechanism for allowing the US to outsource its emission reductions and proceed with business as usual at home.