London (Platts)--6May2008

US emissions could drop from 5.78 billion mt in 2012 to 1.70 billion mt
in 2050--or by 1.8%/year--analysts at Deutsche Bank Research said in a survey
published Monday in Berlin.

According to the study, the climate policy of the United States has
clearly come to a cross road and power generation is to shift to low-emission
technologies and new technologies are expected emerge on a broad scale.

"The US--the world's number one emitter of greenhouse gases for
decades--is now debating a major policy shift from indirect approaches in
tackling climate change to a cap-and-trade program which would greatly reduce
emissions," author of the survey, Klaus Deutsch, said during the survey's
presentation in Berlin. "This will be the litmus test of US domestic politics
over the next two years," Deutsch added.

The three running candidates for November's US-presidential
elections, Hillary Clinton and Barack Obama (Democrats) and John McCain
(Republican) all advocate more radical emissions reduction policies.
Deutsch said the upcoming political change facilitated a new chance of an
extensive climate policy. "The central legislative proposal of Senators Joseph
Lieberman and John Warner, the so called Climate Security Act, proposes a
reduction of the emissions between 60% and 80% until 2050," he said.

Pending legislation in the US senate, the climate security act would
establish a comprehensive and stringent climate policy, the survey said.
The most important vehicle to achieve this goal is, according to the
survey, is emissions trading.

The world's largest market for carbon trading is expected to be
established and double digit billions of dollars in public revenues from the
auctioning of emissions allowances would be spent on mitigation and adaptation
programs.

So far, power generation (33%) and transportation (28%) are the main
sources for greenhouse gas emissions in the US.