House Leadership Prepares Cap-and-Trade Legislation for April
E&E News’s Darren Samuelson reports in a pair of stories that the House of Representatives is moving forward to introduce companion legislation to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation wending its way through the Senate. Rep. John Dingell (D-Mich.), whose Energy and Commerce Committee has jurisdiction, told steel industry officials last week that he plans “to release one or more draft global warming bills for comment by mid-April.”
Samuelson also reported that Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming and a strong ally of Speaker Pelosi, has been meeting with “alternative energy producers, labor groups, financial market officials and industry representatives” to craft legislation.Rep. Markey is preparing to send a report directly to Pelosi with proposals to address climate change or offer amendments when the House Energy and Commerce Committee holds a markup on a major piece of climate legislation, sources on and off Capitol Hill said today.
Markey said: “I think you should do the best you can each year. I do. And we have a real chance this year. If there’s an epiphany that occurred at the White House, then there we are with a chance to make history.”
International Aspects of a Carbon Cap and Trade Program
- Jennifer Haverkamp, Senior Counsel, Environmental Defense, Washington, DC
- Abraham Breehey, Assistant Director of Government Affairs, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers
- Kjell Olav Kristiansen, Director, Advisory Services, Point Carbon North America
- Ruksana Mirza, Vice President, Government and Environmental Affairs, Holcim, Inc.
Cap, Auction, and Trade: Auctions and Revenue Recycling Under Carbon Cap and Trade
Just a few hours after its release in Europe, a new global warming pollution auction-and-trade system will arrive on American soil tomorrow morning at a hearing before the Select Committee on Energy Independence and Global Warming. A leading figure in the European Commission’s carbon market will appear before the Select Committee to discuss how the European Union has shifted from a pollution trading scheme where credits are given out for free to a system where companies must bid on credits.
“Because this administration has refused to push forward on global warming policy, we must look to the E.U. and other countries for lessons on global warming policy,” said Rep. Edward J. Markey (D-Mass.), Chairman of the Select Committee. “Europe has learned some hard lessons which can help America avoid policy pitfalls and reduce carbon dioxide emissions sooner and more effectively.”
The hearing will examine the role of auction or allocation systems for global warming emissions credits in a cap-and-trade climate bill. Along with several prominent witnesses from the United States, Peter Zapfel, Coordinator for Carbon Markets and Energy Policy, European Commission – Environment Directorate General, will cover these new developments in the E.U.
Witnesses- Peter Zapfel, Coordinator for Carbon Markets and Energy Policy, European Commission – Environment Directorate General
- Hon. Ian Bowles, Secretary of Energy and Environmental Affairs, Commonwealth of Massachusetts
- Dallas Burtraw, Senior Fellow, Resources for the Future
- John Podesta, President and Chief Executive Officer, Center for American Progress
- Robert Greenstein, Executive Director, Center on Budget Policies and Priorities
Polluters Believe This May Be the Best Year for Climate Legislation
Representatives of the coal, oil, and gas lobby met yesterday at the United States Energy Association’s “State of the Energy Industry” conference at the National Press Club in Washington. They agreed that Lieberman-Warner may be the best legislation they can hope for, especially if issues like polar bear habitat set the standard for legislation.
Katherine Ling reports for E&E Daily that David Parker, president and CEO of the American Gas Association, said “Who would you rather have writing a bill in the Senate? I might guess it may set a tone for business to fully work with the Senate this year.” He continued that “the polar bear habitat is going to really drive this [climate change] debate. We all have a big education job to do and I think we need to do it collectively.”
Bill Scher has further commentary at Blog for Our Future.
While most panelists agreed it was not likely that a full bill capping greenhouse gas emissions would pass this session, they said a great deal could be accomplished in laying the groundwork this year.Tom Kuhn, president and CEO of Edison Electric Institute, predicted there will be a floor vote in the Senate this year on a climate bill. “No matter what happens on those votes, that will set the marker for what we do in the future,” he said, especially if there is White House involvement.
David Parker, president and CEO of the American Gas Association, agreed with Kuhn. Despite a general disagreement the energy industries have with the climate bill sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.), he said, future legislation could be even harder on the industry.
“Warner is retiring this year, and then the question is, ‘Who comes into play?’” Parker said. Potentially, Sens. Barbara Boxer (D-Calif.) and Bernie Sanders (I-Vt.) – who both favor greater emission limits than those in the Lieberman-Warner bill – could lead the next attempt to pass climate change legislation under a Democratic president, he said.
“Who would you rather have writing a bill in the Senate? I might guess it may set a tone for business to fully work with the Senate this year,” he said.
Achieving workable legislation will require educating policymakers and the public a great deal more on energy markets, panelists said.
Parker said he was worried that “the polar bear habitat is going to really drive this [climate change] debate. We all have a big education job to do and I think we need to do it collectively.”
At the Auto Show: Dingell Supports EPA's Denial of California Waiver
In a Detroit News piece entitled Dingell tours show; says state-by-state emissions rules would doom carmakers, David Shepardson writes that Dingell fully supported last month’s decision by the EPA to deny the California waiver to regulate tailpipe greenhouse gas emissions.
Dingell, D-Dearborn, chairman of the House Energy and Commerce Committee, said if California got the waiver it could impose conflicting federal and state standards. The California standards could be make automobile production “so expensive that people won’t be able to buy and second of all get so difficult that the companies won’t be able to produce anyhow.”Dingell said the California system could lead to 50 different standards. He said the EPA decision “makes good sense.”
As has been previously discussed on Hill Heat, the specter of 50 different standards is simply false. Under the Clean Air Act only California has the authority to get waivers from national standards. Other states can then follow California or the federal standards. At most there can be two different standards.
Dingell plans to introduce a climate change bill in his committee “as fast as we can” but wants to exclude the auto industry, arguing that the CAFE standards in the 2007 energy bill are sufficient regulation: “We’ve had everybody else get practically a free ride and auto industry has to come up with a 40 percent increase in fuel efficiency,” Dingell said. “We’re going to try to see that the pain is shared equally all around.”
Update: Dingell has issued a clarification of his remarks, stating that he considers CAFE standards to be a “carbon constraint” and that the CAFE standard increase “tightens the cap on automobiles by 40 percent by 2020.” Any carbon cap would entail “further reductions” that would be have to matched by “comparable contributions” by other industries.
Shepardson also reports on an interview with Margo Oge, director of the EPA’s office of transportation and air quality. She didn’t expect the agency to issue a formal written denial “until next month at the earliest.” The EPA may be trying to argue that its the EPA press release announcing the denial isn’t actually grounds for a suit to overturn the decision. She also said that the EPA “completed its draft of its own new regulations to reduce greenhouse gas emissions” but didn’t provide details.
Krupp said he that he and Dingell don’t agree on all issues, but do on the need for a broader climate change.“He may be the only one that can get a climate change bill,” Krupp said, noting Dingell’s experience in moving large pieces of environmental legislation.
Krupp said he liked the increase in advanced technology vehicles especially in hybrids in broader vehicle lineups. “The fact that the Big Three makers as well as Toyota and others are making these higher mileage options available in everyday cars is terrific,” Krupp said.
Asked about the fact that hybrids still account for just 2 percent of U.S. sales, Krupp noted the growth rate year over year. “I suppose people said initially that very few people were buying Macintosh Apple computers,” Krupp said. “When gasoline prices are $3.50 a gallon, I think you will see growing interest in these options.”
Krupp said there’s “going to be a need for a shared burden” among automakers, oil companies and utilities. They all will have to “belly up to the bar,” Krupp said.
Lieberman-Warner Markup Summary: Morning
The morning part of the session was carried live on C-SPAN 2.
Sen. Bond’s chart from his opening statement:
Amendments adopted: Sanders low-carbon manufacturing incentives, Lautenberg decoupling incentives, Cardin good government.
Amendments rejected: Craig offramps, Inhofe auto-industry job offramp, Bond low-income family cost-relief, Isakson nuclear title, Voinovich available-tech offramp.
Amendment withdrawn: Carper multiple-pollutant title.
Enviro-Energy Corp Report Says US Can Achieve Greenhouse Goals
Achieving these reductions at the lowest cost to the economy, however, will require strong, coordinated, economy-wide action that begins in the near future.
The report was commissioned by the environmental organizations Environmental Defense and National Resources Defense Council and the energy technology companies Honeywell, National Grid, PG&E Corporation, Shell, and DTE Energy. The Conference Board, the leading U.S. corporate think tank, endorsed the paper.
McKinsey found that a broad mix of abatement options need to be followed; no one strategy accounted for more than 11% of the total abatement, noting:In regions with high-carbon grids, energy efficiency improvements, typically through upgrades to building standards, HVAC equipment, and appliances, are likely to be the most effective and lowest-cost strategies. Conversely, sectors and regions with access to low-carbon grid infrastructure offer more compelling applications of such emerging technologies as PHEVs (plug-in hybrid vehicles).In its conclusion the report reiterated the importance of immediately implementing energy efficiency strategies, many of which end up saving more money than they cost, to “buy time” for emerging technologies to develop commercially.
New Lieberman-Warner Draft Circulated
An aide to Sen. Joe Lieberman (I-Conn.), a lead co-author of the bill, said one of the biggest changes involves an “upstream” cap placed on the heat-trapping greenhouse gas emissions that come from natural gas processors. With the new bill’s natural gas section, more than 80 percent of the greenhouse gas emissions that come from the U.S. economy will be covered under the legislation.Some of the other changes (see line-by-line comparison):Previously, the bill dealt with about 75 percent of the U.S. economy.
Another change in the legislation speeds up by five years the end date for the free emission credits given out to power plants, manufacturers and other industrial sources. Free credits will now be phased out at the start of 2031, rather than the start of 2036.
- Hydrofluorocarbons (HFCs) are separately capped (all allowances freely distributed), to “remove the financial incentive for companies to shut down their plants that use HFCs and move them to countries that don’t have similar limits” (s. 1202, 3901, 3906, 10001-11002)
- 25% of energy R&D funds explicitly allocated to renewable energy projects (an increase from a failed Sanders amendment in subcommittee markup) (s. 4401, s. 4406)
- 0.5% of annual emissions allowances to go to a “program for achieving” methane emissions reductions from landfills and coal mines (s. 3907)
- 1% of annual emissions allowances to go to states for mass transit funding, distributed following federal highway aid apportionment rules (s. 3304)
- Per the request of international aid groups, the national-security requirement for the Climate Change and National Security Fund has been dropped (s. 4801-4804)
- SEC requirement of corporate disclosure of climate risks dropped (s. 9002)
- Interagency Climate Task Force headed by EPA Administrator to submit a report “make public and submit to the President a consensus report making recommendations, including specific legislation for the President to recommend to Congress” in 2019 based on the triennial National Academy of Sciences reports
- Details added to Climate Change Worker Training Program (s. 4602-4606)
- Details added to Adaptation Fund (including combatting ocean acidification) (s. 4702)
- Details added to eligibility for carbon sequestration bonus allowances (s. 3602)
2007 CBO Director's Conference on Climate Change
CBO will hold the 2007 Director’s Conference on Climate Change on Friday, November 16, from 9 a.m. to 12:30 p.m. CBO Director Peter Orszag will host the conference, which will feature leading researchers addressing key questions in the debate on climate change.
Allocating Allowances: Efficiency and Distributional Effects- Lawrence Goulder, Stanford University
- Richard Goettle, Northeastern University
- Dallas Burtraw, Resources for the Future
- Gilbert Metcalf, Tufts University
- Howard K. Gruenspecht, Energy Information Administration
- Francisco De La Chesnaye, Environmental Protection Agency
- Henry D. Jacoby, Massachusetts Institute of Technology
- John P. Weyant, Stanford University
Space is limited so please register in advance by emailing the CBO Office of Communications contact below.
The Director’s Conference is held each year to bring outside experts together with CBO analysts in a collaborative effort that helps further the agency’s research agenda.
Press Contact: Melissa Merson Director of Communications (202) 226-2602 MMerson@cbo.gov
NWF Campaign Targets 50 House Lawmakers 1
The National Wildlife Federation has launched a campaign to get a total of 218 sponsors for the Waxman (HR 1590, equivalent to Boxer-Sanders) or the Olver-Gilchrest (HR 620, equivalent to McCain-Lieberman) cap-and-trade climate bills. The two bills combined have 170 co-sponsors. NWF is targeting what they call The Final Fifty, fifty legislators who have not co-sponsored either bill.