The climate and energy bill being debated in Congress is focusing on the cap and trade definition. The types and limits of so-called greenhouse gases to be regulated are the heart of the bill. Such would determine the system for a trading market for the gases, the size of a tradable unit, and the costs and taxes to be imposed by the government.

After last night’s speech by President Obama from the Oval Office, renewed energies are being marshaled to pass the climate and energy bill this year. Already, the White House has developed a new time table based on the upcoming 2010 elections in November. To spare Democrats from voting on a new range of taxes, and imposing new regulations that would raise the cost of everything, the plan is to get the bill ready for voting after the November elections. The Obama Administration may be signaling that they already expect the Democrats to lose control of one or both bodies of Congress by conceding to wait till the ‘lame duck’ session to vote the climate bill into law.

Cap and Trade essentially would create a new level of bureaucracy which would assign all businesses a carbon limit. Those companies who do not use all of their allowed carbon credits would be able to offer them up for sale. Companies who exceed their ‘cap’ on carbon and need more would be able to buy them on a Carbon Credit Exchange (CCX), a market designed to handle the trading the units of carbon credits.

Many aspects are already in place for the CCX. The exchange would be located in Chicago and run by many people and firms with ties to the Obama Administration, such as General Electric and Shore Bank and others. Even Goldman Sachs is involved, as well as Freddie Mac, which owns the technology patents for the CCX. Some estimate that the CCX could rival the Dow Jones Index with as much as $10 Trillion dollars of carbon credit securities being traded.

Even individuals and their households may become subject to government set ‘caps’ on energy usage and assigned carbon credit limits. Just the added tax burden on citizens could range from $1,761 per year per household to $3,000 or more. The measure would bring in an estimated $366 Billion dollars per year to the Federal government in tax revenue. The added costs on energy and all products produced using energy, could add an extra $8,000 or more in expenses to the average family.

During his speech last night, Obama did not refer to the bill as cap and trade, or even as the climate change bill. Instead, he referred to it as the energy bill, attempting to tie the measure with the need to reduce America’s dependency on oil in lieu of the BP oil spill in the Gulf of Mexico. How the Congress settles the cap and trade definition remains to be seen.