Obama Tells Business Roundtable: “If You’re Giving Away Carbon Permits For Free … It Doesn’t Work”..... What an insightful man!

American President Barrack Obama spoke to the CEO's from the world's biggest companies yesterday offering his opinions on how the world economy is having to move towards a tradable carbon credit sytem. Offering the idea that you can't simply give away the credits. Well I thought this to be somewhat intuitive didn't you?

At the Business Roundtable meeting, Obama reaffirmed that, "I said during the campaign we were looking at a hundred percent auction," and warned inaction was not an option because we face a return to $150 a barrel oil and serious climate impacts:

"The science is overwhelming. This is a real problem. It will have severe economic consequences, as well as political and national security and environmental consequences." E&E Daily reports.

I was especially pleased to see that he focused on the threat of ever-worsening security issues as if that was the United States major concern at this point! Weyerhaeuser President Daniel Fulton, said companies are worried about the costs of a cap & trade bill during tough economic times. But Obama had already made the key point:

"I understand that this will be a difficult transition for many businesses to make, and that's why this budget does not account for such a cap until 2012 -- a time when this economy should be on the road to recovery." E&E Daily reports.

Realistically, a climate bill is not going to be law before 2010 within the U.S. (or even Canada!), and I doubt the cap is going to be put in place before 2013 -- and it won't bite for a few years after that. I'd be amazed if the price for CO2 was much higher than, say, $15 a ton in 2015, which means a total "cost" of maybe $90 billion (assuming consumers and businesses do no energy efficiency whatsoever) -- not a very large impact on a $15 trillion U.S. economy.

THE NEED FOR A MINIMUM CARBON PRICE

As we know the cost of future impacts on the Earth's climate, we should NOT miss any mitigation opportunity cheaper than any given level. This would simply be bad economics. For this reason, a carbon floor price should be applied.

I realize you must have a big picture but begin with the small things but North America is suffering now!