The Breakthrough Institute recently held a press briefing to highlight concerns over the bill currently under consideration while presenting research that shows that cap and trade may mean little, if not a step backwards, for climate change.

"ACES establishes a (modest) carbon price and an emissions reduction target, but fails to provide the emissions certainty of a hard cap," said Jesse Jenkins, Climate & Energy Policy Director at the Breakthrough Institute. ACES will allow polluters to purchase up to two billion tons a year of carbon offsets, which would lead to a "capped" emission increase of up to 9% between 2005 and 2030.

To achieve success, the price of carbon has to be raised sufficiently, yet with free allowances and measures like the Strategic Reserve Pool, that could prove difficult. The SRP can raise the carbon cap by 10% in any year and is triggered when the cost of carbon is too high.

However, the SRP presents a way for pollution to surpass the emissions cap. If the two billion tons of offsets are limited due to a restricted supply of affordable offsets, the government sells reserve allowances to be 'replaced' by international forestry offset allowances later.

The Breakthrough Institute suggests that in order for the emissions cap to actually exist, international offsets must be more expensive than domestic reduction options and the cost of the domestic allowances would have to cost enough to prevent widespread purchase.

Utility qualification threshold, existing state standards (and generation) and the partial compliance of energy efficiency will render minimal to no new renewable energy development under the bill's goal to meet 20% of demand through renewable sources and energy efficiency. The Breakthrough Institute also found that the Renewable Energy Standard would have "little to no impact" on domestic renewable electricity generation, a claim shared by the Southern Alliance for Clean Energy.

Investment in clean energy technologies and energy efficiency is promised, yet clean energy research and development makes up only a fraction of the ACES budget. Broadly defined clean energy investments will account for 12 percent of the allowance value, a distant third to overseas offsets and existing infrastructure— what the Breakthrough Institute referred to as "old dirty energy industries."

Tyson Slocum, director of Public Citizen's Energy Program, raised concerns during a press briefing regarding the bill's sensitivity towards low-income homes. "Language tailored to retail rate payers was absent any sort of specific language that set aside a certain amount of benefits for household ratepayers… we're not satisfied with the way the current language is structured."

Offsets could create a major oversupply of emissions allowances during the first year of cap-and-trade, leading to either a drop in emissions allowance value or for permits to be used in future compliance. One of the biggest issues is the banking of allowances, which ACES does not limit.

U.S. polluters may not utilize the "limited" pool of carbon offsets, according to some. The argument that eventual price increases will lead to the pursuit of emissions reduction strategies might be wishful thinking—perhaps the same wishful thinking involved in free permits.

Taking into consideration the maximum two billion tons of offsets, emissions could rise until 2037, per the Breakthrough Institute. With one billion tons of international offsets per year, emissions would grow at "business as usual" rates until 2025 under ACES provisions.

Offset quality is also an issue—as aptly described by a blogger, they could very well be the Styrofoam peanuts of the Waxman-Markey bill, a "filler that shouldn't break stuff but is still kinda messy." Offset certification will be necessary, and if extensive offsets are utilized, the emissions cap will take years to actually take effect.