Waxman-Markey climate change bill

2009-03-31

in Economics, Politics, The environment

Democrats in the American House of Represenatives released a 648-page climate change and energy bill today. The bill is centred around a cap-and-trade system that is intended to reduce American greenhouse gas emissions to 20% below 2005 levels by 2020, and to 83% below 2005 levels by 2050. Other provisions include “a nationwide renewable electricity standard that reaches 25 percent by 2025, new energy efficiency programs and limits on the carbon content of motor fuels, and requires greenhouse gas standards for new heavy duty vehicles and engines.” Overall, the targets are a bit tougher than the ones in the Obama platform were, though this is much more of an opening offer than a final draft. One huge issue which the bill does not yet specify is whether emissions credits will be auctioned or simply given away. Obama’s platform included a very clear call for 100% auctioning, which would be ideal from an environmental perspective.

It will be a long road from introduction through negotiation in both houses towards eventual ratification, and this bill may not make it. Even getting the bill out of the committee Waxman chairs may be a challenge. That being said, it is urgently necessary for a price on carbon to be established and for reductions to begin. Hopefully, legislators will be far-thinking enough to speed that process along, while also establishing a regulatory framework that can be built upon during the coming years and decades.

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. April 1, 2009 at 10:57 am

House rules
Key Democrats deal opening hand in climate debate
Posted by Kate Sheppard

House Energy and Commerce Committee leaders released the much-anticipated draft of their climate and energy legislation on Tuesday, a proposal that includes emissions goals more ambitious than those proposed by the Obama White House but also leaves open many of the most contentious questions on climate policy.

Sponsors Ed Markey (D-Mass.) and Henry Waxman (D-Calif.) are calling the 648-page draft bill the American Clean Energy and Security Act of 2009. It calls for reducing greenhouse gas emissions 20 percent below 2005 levels by 2020, 42 percent by 2030, and 83 percent by 2050. The Obama team has put forward a goal of 14 percent cuts by 2020 and 80 percent cuts by mid-century, making the House bill slightly more aggressive.

“This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution,” said Waxman, chairman of the Energy and Commerce Committee, in a statement on Tuesday. “Our goal is to strengthen our economy by making America the world leader in new clean energy and energy efficiency technologies.

Markey told reporters that the plan would most likely include some free allocations of credits, at least in the initial period, and some auctioning. Revenues from carbon auctions would likely be used for consumer rebates and energy investments, he said, but the bill’s authors are leaving the specifics up to committee members.”

. April 1, 2009 at 11:04 am

Waxman impressions
Waxman-Markey bill gets a B+
Posted by Joseph Romm

Waxman-Markey seems pretty good. It will jumpstart the crucial transition to a green economy. It keeps the overall impact to U.S. businesses and consumers very low (as any smart climate bill would). And it has the targets needed for the U.S. to join other countries in averting catastrophic local warming impacts that are inevitable if we stay on our current emissions path.

I’d give it a B+. The bill, as Friday’s Waxman-Markey-Dingell-Boucher letter suggested, uses the flawed US Climate Action Partnership proposal as a blueprint (see “NRDC and EDF endorse the weak, coal-friendly, rip-offset-heavy USCAP climate plan”).

. April 1, 2009 at 3:10 pm

1 April 09
The American Clean Energy and Security Act of 2009; Draft One

Is 2009 the year of climate and energy legislation?

It is if you believe Speaker Nancy Pelosi who called the passage of such legislation “an inevitability” on a conference call this morning regarding a discussion draft (pdf) of The American Clean Energy and Security Act of 2009 (ACES) released today by Reps. Henry Waxman (D-CA) and Edward Markey (D-MA).

Pelosi promised to support a process that would help “remove misconceptions”, i.e. combat big oil’s PR campaign against any meaningful cap on emissions, and at the same time, promising that legislation “won’t go as slow as the slowest ship”, i.e. Congress won’t wait around for Republicans like John Shimkus (R-IL) who absurdly claim that limiting CO2 will kills plants, to get on board.

. April 2, 2009 at 11:22 pm

US to be ‘pragmatic on climate’

By Roger Harrabin
BBC environment analyst, Bonn

The US must balance science with what is politically and technologically achievable on climate change, America’s lead negotiator has said.

Speaking at UN talks in Bonn, Jonathan Pershing said the US must not offer more than it could deliver by 2020.

Poor countries said the latest science showed rich states should cut emissions by 40% on 1990 levels by 2020.

President Barack Obama’s plan merely to stabilise greenhouse gases at 1990 levels by 2020 is much less ambitious.

. April 3, 2009 at 2:34 pm

New climate legislation overlooks a major GHG source: industrial ag

Like many others in the climate movement, I have been waiting for weeks (well, years actually) for broad and sweeping climate change legislation. Back in January the economy captured Congressional attention and I knew global warming legislation would simply have to wait. Finally, yesterday, Representatives Markey and Waxman introduced their “American Clean Energy and Security Act of 2009”, a wide-reaching cap and trade initiative with more ambitious emission reductions (83% below 2005 levels by 2050) than President Obama had even advocated for. For that, and for a variety of other progressive initiatives including those for energy efficiency, green jobs, and climate change adaptation, the bill is commendable. But, Markey and Waxman had one large oversight in drafting the bill—they cut the crap, literally.

Buried about halfway through the monster 648 page draft is a crucial statement: “controlling emissions in small as well as large amounts is essential to prevent, slow the pace of, reduce the threats from, and mitigate global warming and its adverse effects.” I couldn’t agree more, which is why I was shocked to see that the bill fails to address greenhouse gas emissions from agriculture, factory farms, and animal manure whatsoever—and even goes the extra mile to specifically exempt the entire sector from any type of regulation.

Matt M April 3, 2009 at 3:35 pm

Here’s a paradox: if we don’t act now with an imperfect bill like ACES, we risk putting tons more carbon into the atmosphere while we get it right, but if we do go along with these subpar targets we risk locking them in for the long-term, jeopardizing our future.

The problem isn’t so much the bill in the US as it stands, but its implications for a Copenhagen agreement. Right now this bill, hopefully with a few coal edits, is as good as we can get politically. Additionally, with a peak and decline target of 2012, we are closer to the science for the first years, which will buy us time to strengthen commitments down the road as the effects of the green economy brighten people’s spirits. But Copenhagen isn’t discussing a 2012 target. And the problem is, with targets closer to 20% by 2020 than the 40% necessary to ensure survival, the bill could influence the target levels of a Copenhagen agreement. This wouldn’t be a terrible start, but it isn’t something that we want to be bound to for the long term unless we can ensure that it will continue to be strengthened, and quickly.

. April 7, 2009 at 4:41 pm

Energy portions of Waxman/Markey compensate (in part) for carbon weaknesses
by David Roberts

There are some gloomy reactions to the Waxman/Markey bill around the interwebs—see, for instance, Ezra Klein, Matt Yglesias, Kevin Drum, and Brad Plumer. I’m not going to claim the bill is perfect, but I think the pessimism is excessive.

It comes down to this: these guys are focusing too much on the carbon cap portion of the bill, which is only one of four major provisions. First off, this is a messaging disaster— Dems on the Hill are begging me to stop talking so much about “cap-and-trade,” which means nothing to the public and is unpopular to the extent anyone understands it. They want the focus on clean energy, efficiency, and jobs, which are dealt with more in the other parts of the bill.

. April 23, 2009 at 12:16 pm

April 21, 2009, 6:00 pm
E.P.A. Releases Analysis of Climate Bill
By Jad Mouawad

Just days after declaring that carbon emissions were a threat to human health, the Environmental Protection Agency has given high marks to a wide-ranging energy and climate bill that was recently put forward by the House Energy Committee.

The Waxman-Markey bill, also known as the American Clean Energy and Security Act of 2009 (PDF), will “drive the clean energy transformations of the U.S. economy,” and substantially reduce energy consumption and carbon emissions, according to the E.P.A.’s review.

. April 24, 2009 at 11:01 am

Gore gives blessing to climate change bill

Former Vice President Al Gore, who won a Nobel prize for his crusade on climate change, is giving his stamp of approval today to House Democrats’ bill to tackle global warming.

He is testifying before a House committee holding hearings this week on a bill introduced by Representatives Edward Markey of Massachusetts and Henry Waxman of California.

In his prepared testimony, Gore calls the bill “one of the most important pieces of legislation ever introduced in the Congress” and predicted passing it would “restore America’s leadership in the world and begin, at long last, to solve the climate crisis,” the Associated Press reports.

. April 27, 2009 at 5:17 pm

The one simple change that could vastly improve Waxman-Markey: Sunset the rip-offsets
By Joe on Offsets

Certainly the weakest part of Waxman-Markey is the 2 billion rip-offsets that polluters are allowed to purchase each year in place of reducing their own greenhouse gas emissions. After all, total U.S. GHGs in 2005 were about 7.2 billion tons (see “Bush policies cause U.S. GHG emissions to soar 1.4% in 2007“).

Rip-offsets deserve to be called rip-offsets because it is far from clear how many of them represent real reductions (see discussion at “NRDC and EDF endorse the weak, coal-friendly, rip-offset-heavy USCAP climate plan” and below).

The good news in Waxman-Markey is you apparently have to purchase 5 tons of offsets to substitute for 4 tons of actual emissions reductions and you can’t get international offsets from a country that has not agreed to reduce its emissions — which together are vast improvements over the USCAP proposal. Also, Waxman-Markey would in theory let EPA set tough standards for domestic rip-offsets. How tough those would be in practice is anyone guess.

. April 29, 2009 at 9:04 am

Specter’s switch likely to have limited impact on energy, climate bills

Sen. Arlen Specter’s party switch sent shockwaves across Washington yesterday, but it appears unlikely to significantly alter the prospects for President Obama’s agenda on energy, climate change and other major legislation.

Certainly, Senate Democrats were visibly overjoyed with the prospect of holding the 60-vote majority that they have long coveted, as it should make it easier for the party to clear procedural hurdles. But top Democrats cautioned that they would still need to compromise — both within their own party and perhaps with the GOP — to cobble together enough votes to pass major legislation.

. May 8, 2009 at 9:40 pm

Waxman-Markey deal-making update: 14% cut by 2020, about half the allowances given away at first, phased out to full auction in 10 to 15 years
May 8th, 2009

We’re starting to here details of the sausage-making led by chief climate chef House Energy and Commerce Chair Henry Waxman (D-CA). Needless to say, it ain’t pretty.

Milan May 8, 2009 at 9:49 pm

There’s a tricky tension here, between getting something flawed in place (for subsequent improvement) and making sure no huge mistakes are made from the outset.

Some environmental instruments have started weak and flawed (Vienna Convention), then been tightened (Montreal Protocol). That being said, it makes sense to avoid big errors.

It seems Waxman et al understand climatic science, and they definitely understand US politics better than I do. I hope they get the balance right, and start America on the path to decarbonization.

. May 22, 2009 at 12:29 pm

In landmark vote, House committee approves climate bill

Posted 6:07 PM on 21 May 2009
by Kate Sheppard

After months of grueling hearings and deliberations, the House Energy and Commerce Committee passed the Waxman-Markey climate and energy bill by a vote of 33-25 on Thursday evening. It’s a landmark occasion, the first time a serious climate bill has made it this far in the House.

The bill would cut greenhouse-gas emissions about 17 percent below 2005 levels by 2020, and about 80 percent by 2050, while promoting renewable energy and energy efficiency.

“We are now one step closer to delivering on the promise of a new clean energy economy that will make America less dependent on foreign oil, crack down on polluters, and create millions of new jobs all across America,” said President Barack Obama in a written statement.

. May 22, 2009 at 4:31 pm

Bono Mack casts lone Republican vote for climate bill
Casts House panel’s lone GOP yes vote on landmark legislation

WASHINGTON — Rep. Mary Bono Mack on Thursday night cast the lone Republican vote in favor of a massive climate-change bill as a key House panel passed the measure. The legislation would limit industrial emissions, redefine strategies for renewable energy, re-regulate energy production and use, and set up a system of carbon emission caps.

As reported Thursday at mydesert.com, the seven-term congresswoman, who wrestled with the bill for weeks and was undecided on it until the 11th hour, cast her vote as a member of the Energy and Commerce Committee, which approved it, 33-25.

It was one of the first test votes for the legislation that could eventually touch virtually all consumers one way or another, if only through energy costs.

“This climate change legislation is one of the most sweeping, complex bills that Congress has considered in recent years, and while far from perfect, it sets us on an important path toward building a greener, more sustainable economy,” the Palm Springs Republican said in a statement. “While I still have significant concerns about this bill, particularly with regard to its cost and its failure to recognize innovative technologies like advanced nuclear energy, I believe this is the right direction for our district, for our nation and for our future.

. May 23, 2009 at 10:32 am

The Globe Essay
A made-in-Canada solution?

A much more difficult policy for Canada to imitate is the proposed U.S. cap-and-trade policy that has begun to wind its way through Congress under a House bill sponsored by Representatives Henry Waxman and Ed Markey. It would impose a hard cap to reduce aggregate U.S. greenhouse gas emissions by 3 per cent from 2005 levels by 2012, 20 per cent by 2020, 42 per cent by 2030 and 83 per cent by 2050. With permit trading, regulatory costs are alleviated since companies facing high compliance costs purchase credits at less cost from those who emit less than their allowance.

With a growing economy, these requirements will be a challenge unless economic technologies are adopted in sufficient time. The system will apply to large emitters (with more than 25,000 equivalent carbon tons of emissions) in the utility, petroleum, industrial and other sectors. As part of the package, companies may buy domestic and international offsets, borrow allowances from other years and bank current allowances to be used in other years.

While Mr. Obama’s initial proposal would require the full auctioning of credits, thereby raising $1.2-trillion over 10 years, the proposed scheme has bought political support from the coal-based regions and power companies by giving away 85 per cent of permits. This will blow another hole in the U.S. budget, adding to its already immense, Italian-style debt burden. (“What’s a trillion?” to paraphrase C. D. Howe.)

Moreover, the allowances soften substantially the impact of energy plans on the electrical coal industry, which accounts for the largest share of emissions in that sector. Surprisingly, allowances are far less generous to natural gas, which is a much cleaner source of power. Of course, the oil industry is a substantial loser; refining costs are expected to skyrocket.

Cap-and-trade schemes are quite complex and intrusive, not much different from imposing a new value-added tax with multiple tax rates on goods and services. The U.S. Congress is well aware that energy-intensive goods will be most affected by a cap-and-trade system; the new bill includes unspecified subsidies as an offset for internationally competitive, energy-intensive sectors.

Much to its discredit, the U.S. bill’s free distribution of permits and subsidies mitigates the impact of carbon pricing on consumer behaviour, because consumer price impacts are softened. To some extent, this will shield consumers from price hikes, which would encourage better conservation practices and energy efficiency. It is not a good way to go.

It also gives the President the power to impose border adjustments on a case-by-case basis. Call it a tariff on foreign manufacturers and importers who would pay for special allowances to cover carbon contained in U.S.-bound products. Supposedly, countries with similar carbon pricing schemes would be exempt.

. May 25, 2009 at 1:19 pm

Waxman-Markey bill would do more for climate without cap-and-trade provision

Posted 4:31 PM on 21 May 2009
by Gar Lipow

Waxman-Markey is a big split personality of a bill. Its efficiency and renewable requirements would make a dent in greenhouse gas emissions, even if not a very big one. But the cap-and-trade at the heart of the legislation is another story.

Why do we need cap-and-trade or a carbon tax or something similar? If we could just flip a switch and turn off emissions quickly, there would be no need to discuss complex schemes. In that case, the best approach would just be to notify everyone they were required to stop polluting a year or three from now. Because greenhouse gas emissions are so interwoven into our infrastructure, we have to phase out this type of pollution slowly, over decades.

Waxman-Markey’s approach to this is to issue permits each year for a total amount of pollution we will allow. Polluters must obtain permits for every bit of smoke they belch. The idea is to allow pollution very close to the current level the first year, then issue fewer permits every year, so the amount of pollution allowed gradually falls. The total number of permits is the cap. As that total drops the cap is said to tighten. Sale of those permits is the “trade.”

Now, it is easy to argue over whether this type of system can be implemented properly, but whatever your stand on the theoretical issue, it is pretty obvious that Waxman-Markey’s implementation is a series of disasters.

. June 23, 2009 at 2:07 pm

Climate bill might get a vote this week after all

Posted 8:59 PM on 22 Jun 2009
by Kate Sheppard

The House Committee on Rules posted the bill on its website late Monday—with 255 additional pages, bringing the total page count to 1201. The bill’s prospects for going to a floor vote this week looked dim just a few days ago. But the site notes that there’s a deadline of 9:30 a.m. on Thursday for amendments—meaning there could be a vote on Friday before legislators head home for the July 4 recess.

We’ll have more soon. Stay tuned!

Jerry &Brenda Ewards June 28, 2009 at 3:45 am

Under the Obama administration the demise of America continues to crumble .The climate bill is just another example of tax and spend, another bill in which no one in congress dared to read .If it were not so sad it would be funny. Al Gore, gets richer and stays in the lime light Boxer ,adds to her fragile legacy and Rick Boucher sells out the coal mineing counties that he supposed to repsent , those mineing jobs are vital to many familys in our allready depressed area. The days of Jimmy Carter have returned .The country burns for real leadership politicians who are statemen and statewomen folks who really care ,but as for now the fiddles are tuned and are playing as smoke dims the eyes of any vision of hope and trust in those who hold an elected seat in the office of government.

R.K. June 28, 2009 at 12:00 pm

Hopefully, the other opponents of carbon pricing will be as inarticulate and unconvincing as ‘Jerry &Brenda Ewards’ up there.

. September 22, 2009 at 9:42 pm

Obama gives his first real climate speech—really

It was no barnburner of a speech, but President Obama’s address at the U.N. Climate Summit Tuesday morning amounted to the boldest climate change speech of his presidency. That’s because it was essentially the only climate change speech of his presidency.

Until now, President Obama’s message about energy has been all clean-tech innovation, green jobs, and economic growth, with just passing mentions of climate change. Candidate Obama, to be clear, had plenty to say about climate (example: his interview with Grist in July 2007). On Tuesday he finally returned to the topic.

“No nation, however large or small, wealthy or poor, can escape the impact of climate change,” he said in the address to world leaders. “Rising sea levels threaten every coastline. More powerful storms and floods threaten every continent. More frequent drought and crop failures breed hunger and conflict in places where hunger and conflict already thrive. On shrinking islands, families are already being forced to flee their homes as climate refugees. The security and stability of each nation and all peoples—our prosperity, our health, our safety—are in jeopardy. And the time we have to reverse this tide is running out.”

. September 23, 2009 at 11:01 am

Green Gas
Obama says he wants a climate change bill. But can he get it?
By Christopher Beam
Posted Tuesday, Sept. 22, 2009, at 6:30 PM ET

Bill Clinton’s presidency has served as a roadmap for Barack Obama’s—a roadmap, that is, of what not to do. Don’t try to pass health care reform without congressional input. Don’t tackle controversial social issues early in your presidency. Don’t alienate the military. Now there’s another lesson: Don’t promise the world you’re going to fight climate change when you can’t.

In his speech to the United Nations Tuesday, Obama rattled off the administration’s energy accomplishments, from tightening fuel emissions standards to tracking greenhouse gas pollution. He praised the House of Representatives for passing climate change legislation last June. But he was careful not to promise a finished bill. That’s because, thanks to the long slog of health care reform and the galaxy of political interests that must be appeased, a Senate bill by the end of the year—let alone by the time of the global environmental summit in Copenhagen in early December—is looking unlikely.

. September 30, 2009 at 12:27 pm

The cap-and-trade bill
Waiting for the other shoe to drop

Sep 10th 2009 | NEW YORK AND HOUSTON
From The Economist print edition
The second big bill before Congress is also in difficulties

COMPARED with the argy-bargy over health-care reform, this summer’s public conversation about controlling carbon emissions has been a model of restraint. In August, a Zogby poll commissioned by the National Wildlife Federation found that 71% of likely voters in America support the Waxman-Markey bill, a proposal to create a cap-and-trade mechanism for carbon dioxide that cleared the House of Representatives in June. But the bill still faces an uphill climb in the Senate, which resumed work on September 8th.

The bill’s future is clouded partly because health care consumes virtually all Barack Obama’s political capital, and partly because Republicans, whatever the polls may say, think cap-and-trade is a political loser for Democrats. When public attention swings to the issue, they can paint it as a stealth tax on energy—and during a recession at that. Republicans who were formerly committed to climate legislation include John McCain, last year’s presidential nominee, as well as Lisa Murkowski of Alaska and Richard Lugar of Indiana, a centrist and internationalist who appreciates the importance of climate change to global opinion. All have disengaged from the negotiations.

. October 5, 2009 at 5:27 pm

Obama adviser says no climate change law this year
OPS_admin | Oct 04, 2009

WASHINGTON – President Barack Obama’s top energy adviser says there is no way Congress will be able to pass a bill on climate change this year.

“That’s not going to happen,” the adviser, Carol Browner, said Friday.

Browner made the statement at a conference organized by The Atlantic magazine, just days after Senate Democrats introduced a major bill on climate change. In a video posted on the magazine’s Web site, Browner was asked about the prospects of enacting climate legislation by the time negotiations on a global climate treaty begin in December in Copenhagen.

Milan October 5, 2009 at 5:29 pm

Browner’s comment is very discouraging. Having some legislation go through in the US would probably have significantly raised the odds of a good outcome at Copenhagen.

Now, that will be even harder to achieve.

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