House to Vote on Cap-and-Trade Emissions Bill
Wednesday, June 24, 2009
Democratic leaders in the House have scheduled a Friday vote on a climate change bill that would establish a complex cap-and-trade system to limit the nation's greenhouse gas emissions, a priority for President Obama.
The House Rules Committee unveiled the latest version of the bill, which weighs in at 1,201 pages. It features new items such as $7.5 billion in "green bonds" for a new federal financing agency called the Clean Energy Deployment Administration, extra emission allowances for politically powerful rural electric cooperatives, greater flexibility for states that want to use free allowances for mass transit, and tweaks benefiting a range of companies, including algae-based biofuel producers and major petroleum refiners.
The legislation "will spark a clean energy transformation that will reduce our dependence on foreign oil and confront the carbon pollution that threatens our planet," Obama said yesterday at a news conference. He added that the bill's incentives "will finally make clean energy the profitable kind of energy. And that will lead to the development of new technologies that lead to new industries that could create millions of new jobs in America, jobs that can't be shipped overseas."
The Environmental Protection Agency said yesterday that energy efficiency measures prompted by the legislation would lower consumer spending on utility bills by roughly 7 percent in 2020.
But House Republicans have attacked what they call "cap and tax" legislation, saying it would sharply raise energy costs for American consumers and ship jobs overseas. The National Republican Congressional Committee tried to tap opposition in a fundraising letter that called cap-and-trade legislation "nothing more than a tax which starts accruing the moment you flip on your light switch."
House Democratic leaders were still struggling to cement support for the legislation, and yesterday made two new concessions to farm state lawmakers. The party's caucus met yesterday evening.
One dissenter has been House Agriculture Committee Chairman Collin C. Peterson (D-Minn.), who wanted to alter the rules for agricultural offsets, which are credits farmers could receive for tilling and conservation practices that keep carbon dioxide stored in the soil. Peterson wanted authority for evaluating offset proposals moved from the EPA to the Agriculture Department. Environmentalists and the bill's main sponsors feared that the Agriculture Department might use lax standards, which would blow a hole through the nationwide cap on carbon dioxide emissions.
Peterson and House Energy and Commerce Committee Chairman Henry A. Waxman said late yesterday that they had reached a deal putting the Agriculture Department in charge of running the offset program. The lawmakers said they would seek advice from the Obama administration about an advisory role for the EPA.
Daniel J. Weiss, director of climate strategy at the Center for American Progress, said, "It is essential that the offsets are real, verifiable, additional and permanent to ensure that the cap remains solid." He added "like the bill as a whole, the deal is imperfect."
Peterson had also wanted the climate bill to change the EPA's method of calculating the emissions of corn-based ethanol. The EPA counts indirect costs, including the increased use of land in places such as Brazil to grow soybean crops displaced in the United States by corn grown for ethanol use. Waxman (D-Calif.) said he would ask the EPA to commission a study of indirect costs and that any method of counting those costs should be agreed to by the Agriculture Department as well as the EPA.
Peterson had threatened to oppose the bill but said yesterday that he would support it.
Despite misgivings among some lawmakers and the complexity of the bill, House Speaker Nancy Pelosi (D-Calif.) has pushed ahead with a vote. "It's a sign that this is a priority for the speaker and the president," said Rep. Chris Van Hollen (D-Md.). "We want to move this as expeditiously as possible."
Van Hollen won changes in the Clean Energy Deployment Administration proposal, making it an independent agency rather than part of the Energy Department, providing funding and broadening the tools at its disposal. Nuclear power plants could qualify for loan guarantees and other assistance, though the agency would not be able to devote more than 30 percent of its resources to any one technology and companies would not be able to "double dip" with other government programs.
The bill has prompted a whirlwind of lobbying. Major environmental groups have spent more than $10 million on ads supporting the legislation, one of the groups estimated. Twenty-two environmental groups issued a letter yesterday backing the bill.
A diverse group of 20 corporations, including Applied Materials, Starbucks and the utility FPL Group, launched a campaign, saying: "Putting a price on carbon will drive investment into cost-saving, energy-saving technologies, and will create the next wave of jobs in the new energy economy."
An equally diverse group of organizations also opposed the bill yesterday, including the American Petroleum Institute, the National Pork Producers Council, and Friends of the Earth. The API cited a Congressional Budget Office study saying gasoline prices could rise by 77 cents a gallon, albeit not for several years. And Friends of the Earth unveiled an ad that said: "The House Climate Bill. Brought to you by Duke Energy. We can do better. We must." Another ad substituted Shell Oil for Duke Energy.
Staff writer Paul Kane contributed to this report.