Democrats on the Waxman-Markey Fence Worried about RES, Allocations

Posted by SolveClimate Thu, 23 Apr 2009 17:02:00 GMT

By SolveClimate’s Stacy Morford.

The usual court jesters shot off verbal fireworks as a week of hearings got underway on the Waxman-Markey climate bill, but the real attention on Capitol Hill was tuned to a few moderate Democrats who have the power to make or break the bill.

House Energy and Commerce Committee Chairman Henry Waxman acknowledged their concerns this morning as EPA Administrator Lisa Jackson, Energy Secretary Steven Chu, and Transportation Secretary Ray LaHood were being questioned by the committee.

Praising one of those moderates, former committee chairman John Dingell (D-Mich.), Waxman said he had hoped to see his legislation pass with something like the committee’s 42-1 vote that had secured amendments to the Clean Air Act in 1990. But he added,

“I have my suspicions after listening to the opening statements here that we may not be able to succeed in the same way.”

The statements and questions so far from the committee’s moderate Democrats suggest that winning enough votes will likely mean rewriting the bill’s proposed renewable energy standard to account for regional differences. It may also require free emissions permits and other aid for industries – particularly automotive and energy – that will need to evolve to survive in a carbon-constrained world.

The RES currently proposed in the draft legislation would require utilities to derive 25 percent of their power from renewable sources by 2025.

Mike Ross (D-Ark.) and Bart Gordon (D-Tenn.) both expressed concerns that that level would penalize states like theirs that lack the wind power of Texas and the sunshine and geothermal reserves of California. G.K. Butterfield (D-N.C.) said his state could probably reach its current target of 15 percent by 2025, and possibly do better if nuclear and biomass could count, but 25 percent was out of the question.

Jim Matheson (D-Utah) asked Chu if he thought Congress would be overprescribing if it required both an emissions cap and a national renewable energy standard.

Chu has been outspoken in his desire to restore the United States’ place as the world’s leader in energy technology. The RES, he said, is a necessary interim driver of innovation and renewable energy use. The cap won’t start until 2012, and industry will need time to adjust. The RES, meanwhile, will drive renewable energy development by guaranteeing a marketplace. Energy executives who testified later in the day echoed that argument, saying federal rules would create stability and expectations that businesses could bank on.

That doesn’t mean that that the RES has to be uniform nationwide, though. A few committee members questioned whether Congress could instead require each state to set a minimum standard, which could then be met in ways tailored to that state’s own resource mix. Twenty-eight states already have renewable energy standards.

Dingell also questioned the “aggressive nature of the renewable electrical standard,” but he and Gene Green (D-Texas) were more focused on aid for industries, particularly the U.S. automakers and refiners.

Green, worried about job losses in the Houston ship channel area that he represents, urged the committee to provide ample free emissions allowances from the trading program for energy-intensive industries, as well as financial support for consumers facing higher electricity prices.

“We must protect our energy–intensive industries, including refineries, so we do not simply export those jobs abroad to nation without carbon controls and lax environmental regulations,” Green told the committee.

Dingell called for doubling the incentives for the Department of Energy’s advanced technology vehicle incentives programs to help the auto industry in his home state. He added:

“Of course, the question of auction versus allocation still lies before us, and that is a very serious question. Some might say ‘deal breaker’ for many members.”

The auction details from the cap-and-trade portion of the bill have yet to hammered out, which has created an easy target for fiscal fear mongering among opponents. Without knowing how the money from cap-and-trade auctions would be distributed, the Congressional Budget Office can’t accurately gauge the bill’s financial impact.

Jackson offered the committee the EPA’s newly released cost assessment: The energy bill for an average family would rise between $98 and $140 per year.

However, the EPA’s analysis looked only at the cap-and-trade portion of the bill, and with so many details yet to be determined by the committee, the EPA had to make assumptions about the price of carbon ($13-17 per ton in 2015) and the percentage of revenue that would be returned to consumers (40 percent).

The 40 percent rebate for consumers, a number recommended by the bill’s authors, did offer more insight into how Waxman and Markey might propose divvying up the revenues, but it was still only an estimate.

The committee’s 23 Republican members asked Waxman in a letter this week for more hearings to flesh out the details before the committee begins marking up the legislation for a vote.

“Your discussion draft lacks any decision on permit allocations versus auctions,” they wrote. “The manner in which you will address this issue is the cornerstone of the legislation; without it the bill is simply not finished and not ripe to be marked up or accurately discussed in the context of a hearing.”

In the absence of stronger data, some opponents have resorted to inventing their own numbers.

Two of the most outspoken opponents of the bill – Reps. John Shimkus (R-Ill.) and Joe Barton (R-Texas) – suggested that the lack of details was a conspiracy to prevent the committee from knowing the true cost. They repeated the GOP’s manipulation of a recent MIT study, saying the increase would be $3,100, a number the study’s own author says is 10 times too high.

It was a fellow Republican, LaHood, who spoke up today about the continued abuse of the MIT study.

LaHood held up a letter from the study’s author correcting the GOP’s use of his numbers. But when he asked to enter the letter into the committee record, Shimkus objected. If the MIT letter was submitted, then Shimkus wanted to submit a story written by the Weekly Standard, too. Waxman agreed to both.

Shimkus was clearly playing to the cameras this morning. He vowed that “those of us who want jobs are going to try to defeat this bill” and went on to declare cap-and-trade a greater danger than terrorism:

“I see this as the largest assault on democracy and freedom in this country as I’ve ever experienced. I’ve lived through some tough times in Congress. I’ve seen two wars, terrorist attacks. I fear this more than all of the above.”

Like it or not, economics will be the issue for members of Congress. Their re-election campaigns are built on numbers – how many jobs they created, how much federal bacon they brought home – and their campaigns are always on.

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