Waxman-Markey climate change and energy bill faces significant political hurdles
On March 31, 2009, House Energy and Commerce Committee Chair Henry Waxman (D-MA) and Energy and Environment Subcommittee Chair Ed Markey (D-MA) unveiled the American Clean Energy and Security Act of 2009 (ACES). Although the legislation sketches a skeletal framework for carbon regulation, it is conspicuously silent on several key issues. Most importantly, the bill does not discuss what percentage of allowances, if any, will be auctioned or provided free of charge; nor does it specify whether, to what extent, and in what form, the billions in revenue generated by allowances will be returned to US taxpayers. These critical questions have been tabled for committee deliberation.
Reps. Waxman and Markey have fast-tracked ACES to be out of committee by Memorial Day. This schedule is consistent with the administration’s larger objective of signing a comprehensive climate and energy bill into law in advance of the December 2009 UN Climate Change Conference in Copenhagen. With key questions yet to be addressed and stark policy differences between supporters and detractors of the draft bill, some are skeptical whether the US can agree on comprehensive climate legislation before the Copenhagen summit.
The far-reaching, 648-page draft bill sets forth standards and incentives designed to promote clean energy and energy efficiency while reducing greenhouse gas emissions. Employing a comprehensive approach, the legislation is intended to enhance US energy independence, reduce energy costs to American consumers, create green jobs, and curb global warming pollution. The draft bill’s global warming regime is modeled largely on US Climate Action Partnership (USCAP) recommendations from the Blueprint for Legislative Action. To reduce global warming emissions, the bill broadly outlines a market-based cap-and-trade program with aggressive carbon reduction standards and offset-availability to covered entities. Relative to 2005 levels, the bill calls for reductions of 3% by 2012, 20% by 2020, 42% percent by 2030, and 83% by 2050.
The bill’s energy provisions require that 25% of the US energy supply be generated from renewable sources such as wind, solar, and geothermal by 2025. In addition, the bill promotes development of carbon capture and sequestration technology (CCS), modernization of the US electrical grid, increased production of electric vehicles, and heightened energy efficiency across all sectors of the economy, including building, appliances, and transportation. To facilitate transition to a clean energy economy, Title IV of the bill subsidizes domestic education and training for green jobs as well as exportation of clean technologies to developing countries abroad.
The Waxman-Markey draft has sparked a chorus of approval among commentators and policymakers alike. In an email statement, White House spokesman Ben LaBolt affirmed that “President Obama is committed to an energy policy that launches a new sector of clean energy jobs, makes our economy more competitive, and weans the nation off its dependence on foreign oil,” adding that “[i]t is clear that Chairman Waxman’s legislation would advance all of those goals.” Echoing the response from Pennsylvania Ave., Dr. Richard H. Moss, vice president for climate change at the World Wildlife Fund issued a statement praising the draft as “a major first step toward a strong cap and trade bill that will cut emissions, jumpstart a new clean energy economy and strengthen the ability of the Obama administration to negotiate a fair and effective global climate deal this December in Copenhagen.”
Opponents of the bill do not share Dr. Moss’s optimism. House Minority Leader John Boehner (R-OH) claimed that bill, as proposed, would “raise energy taxes in the midst of a serious recession.” Likewise, Sen. Joe Lieberman (I-CT), a longtime supporter of climate legislation, opined that the draft bill’s emissions targets “impose too much of a burden [on industry]” making it unlikely the bill would garner the 60 votes necessary to pass in the Senate.
US-Canada "clean energy dialogue" to address coal, oil sands, and carbon capture
On February 19, President Obama made his first foreign trip, as he traveled to Canada to meet with Prime Minister Stephen Harper. One of the main topics on the agenda was a “US-Canada clean energy dialogue” – an attempt to cooperate across the border to protect the environment and improve energy security. One of the main goals of the new initiative is to reduce carbon emissions, in particular by developing cost-effective carbon capture technologies and ways to push the emissions underground instead of into the atmosphere. The leaders also mentioned creating a more efficient electric grid.
Carbon emissions are an existing problem in US coal deposits, and Canada has similar problems with its oil sands. In fact, a week before President Obama arrived, Syncrude Canada Ltd., a major oil company, was charged with violating environmental laws in connection with toxic waste caused by oil mixing with sand.
The meeting reflects Obama’s stated goal of being a global leader in climate change. He is hopeful that the dialogue between the United States and Canada will spark the interest of other countries that have environmental issues, in particular India and China. The discussion of goals did not get very specific, however – President Obama stated, “I think the clean energy dialogue is an extraordinary beginning because right now there are no silver bullets to solve all of our energy problems.” Canada has allocated $1 billion to its Clean Energy Fund, and the United States economic stimulus package has allocated $3.4 billion to “Fossil energy research and development.”
