Will Businesses Push Back Carbon Trading?

President Barack Obama’s personal aura tends to give his policy prescriptions a feeling of inevitability. But as the fight over the stimulus package showed, his power only extends so far. At times, the new Administration will need to make compromises, and likely bigger ones than occurred with the stimulus.

Which is why climate change activists might do well to start worrying about whether carbon trading legislation will pass. Right now, that issue feels like it’s on the distant horizon, preoccupied as the country is with bank rescues and lost jobs. But Obama, and other lawmakers, have previously indicated their desire to put a carbon trading scheme in place as soon as possible.

If the economy were booming, business interests and conservative holdouts might be expected to put up a fight, but ultimately lose. In the current environment, their resistance might carry more weight. Here’s what’s happening in Australia, according to The Age (I’ve removed some paragraph breaks from the original for spacing):

Plans to start emissions trading next year are in trouble after a powerful business group withdrew its support. The Australian Industry Group (Ai Group) has called for the scheme to be delayed until 2012 because of the economic crisis. This caps off a horror stretch for the federal government’s scheme. Industry groups, farmers and green groups are all ramping up their opposition to the scheme…

The Ai Group’s policy change is significant because it had previously been quite supportive of the government’s plans. The group had called for a delay to be considered before, but in more gentle language and with no date. Now they’ve made up their mind.

“The 2010 start date is neither necessary nor realistic,” chief executive Heather Ridout said. “(This is) because of the impacts of the global financial crisis on business confidence, cash flows and the availability of credit.” Delaying the scheme to 2012 would provide “much-needed breathing space”, Ms Ridout said. However, the group still supports emissions trading.

We don’t have to wait around in the United States to see if any of our home-grown business organizations throw up opposition. The Western Business Roundtable, which represents businesses in Western states, has already commissioned a lengthy study to show that a regional carbon trading scheme would hurt the economy.

The WBR warned that enacting trading would chase away investment dollars, overburden the electricity grid and hurt businesses. You can find their whole report here.

Environmental groups and California governor Arnold Schwarzenegger, one of several who support carbon trading, have indicated that the WBR’s study is a pack of lies (not in those words, of course). You can decide for yourself, but diving into the details, be aware that groups on both sides have figured out ways to use the numbers to support their own position.

And that’s exactly the point. Carbon trading may look attractive from here — but the propaganda has yet to seriously start in the United States. Once a national trading plan seems to be in the works, that will change, and there’s no telling who will come out on top.