US elections: what’s at stake for carbon markets? Part 2 – Congressional races

Thirty-four US Senate seats are up for election in November, as well as all 435 seats in the House of Representatives – with the makeup of the US Congress having a bearing on carbon markets in North America going forward, we take a look at Congressional races most likely to influence the balance of power in the US legislative branch – and how that might impact legislation relevant to carbon markets. A more Republican balance of power in Congress makes for a near term future in which the Inflation Reduction Act reduces carbon abatement costs less, which in turn increases demand for allowances in existing cap-and-trade programs for an overall bullish effect on carbon prices in the markets they create.

Relevant election outcomes Although who is elected president is a major determinant of US climate policy and therefore influences carbon markets (mostly at the international level, see our previous analysis in this series), the makeup of the US Congress a…