Dingell and Boucher Unveil Draft Climate Legislation

Posted by Wonk Room Wed, 08 Oct 2008 21:24:00 GMT

From the Wonk Room.

Dingell, stepping it upAs the 110th Congress comes to a close, two of the legislators in charge of climate legislation in the House of Representatives yesterday released a draft climate plan. Rep. John Dingell (D-MI), the powerful chair of the House Energy and Commerce Committee, and Rep. Rick Boucher (D-VA), chair of the Energy and Air Quality subcommittee, have primary jurisdiction in the House for legislation that puts mandatory limits on carbon emissions. Although such legislation has been a top priority for Nancy Pelosi (D-CA) since she became Speaker of the House in January 2007, Dingell and Boucher declared they would not be rushed, instead working on the 2007 energy bill, holding several hearings and releasing four white papers from October to May of this year. Dingell’s district is in the heart of the U.S. auto industry; Boucher represents Virginia’s coal country. Below is an analysis of some of the key issues raised in their 460-page draft legislation, an ambitious effort by the two congressmen.

EMISSIONS TARGETS. Dingell and Boucher call for emissions reductions of 80 percent from 2005 levels by 2050, in line with the minimum of scientific recommendations, but with reductions of only six percent below 2005 levels by 2020. Punting any significant reductions until after 2020 means that the Dingell-Boucher plan falls grossly short of what is needed to forestall catastrophe:

Dingell-Boucher emissions pathway

In contrast, Europe is maintaining its commitment to unilateral reductions of 20 percent below 1990 levels by 2020.

REGULATORY STRUCTURE. In their letter to other members, Dingell and Boucher criticize the Supreme Court’s Massachusetts v. EPA decision that the EPA must regulate greenhouse gases, saying, “We believe that elected and accountable representatives in the Congress, not the Executive Branch, should properly design that regulatory program.” Their legislation would overturn the Supreme Court ruling by removing greenhouse gases from the Clean Air Act’s National Ambient Air Quality Standards regulations.

The draft provides a broad range of options for dealing with vehicle emissions standards, ranging from preempting the right of California and other states to provide additional protection from automotive pollution to allowing the EPA and the states to implement such protections. They also signal that they see state-level regulation of emissions as an economic threat, saying their actions “could be disruptive to interstate commerce and counterproductive to the goal of limiting national greenhouse gas emissions.” Their draft legislation would outlaw any state or regional cap and trade program.

MONEY. The Center for American Progress strongly supports the “polluter pays” principle for cap and trade programs to reduce global warming. The cost of pollution allowances should not be shifted to the taxpayer. Giving free permits to polluters would be a global warming bailout. The polluting industries are lobbying heavily to receive most if not all permits for free, particularly in initial years of the program. The European cap-and-trade system originally gave away permits, resulting in massive windfall profits for polluters. They are moving to a full auction of permits, like the new Regional Greenhouse Gas Initiative cap-and-trade program that covers northeastern states.

The Dingell-Boucher draft does not take a position on how permits should be allocated initially, instead detailing four scenarios, three of which involve massive giveaways to covered industries. In every scenario, Dingell-Boucher would protect low-income consumers from increases in energy prices through tax breaks and rebates, and invest heavily in new technology deployment (e.g., renewables, advanced coal, advanced vehicles). Although their allocation scenarios are risible in detail, they do a good job of covering the competing priorities in moving to a low-carbon economy:
  1. Protect low-income consumers from energy costs
  2. Minimize compliance costs for covered polluters
  3. Invest in technology development and deployment
  4. Invest in complementary programs in efficiency and clean energy
  5. Support international efforts and adaptation
  6. Give rebates to middle- and upper-income consumers

Dingell and Boucher believe that low-income families must be protected, that industry should receive pollution cost protection and new technology support, and that all else is up for debate. Nearly two-thirds of their Democratic colleagues indicated last week a very different set of priorities, that focuses not on protecting polluters but on respecting scientific urgency, delivering economic equity, and capturing the energy opportunity.

Boucher Says Bush Open to Coal-Friendly Cap-and-Trade Legislation 2

Posted by Brad Johnson Thu, 08 Nov 2007 21:32:00 GMT

From E&E News (subs. req.): Boucher told a business forum that he has been in talks with the Bush’s environmental advisors, including Jim Connaughton, chairman of the White House Council on Environmental Quality, about crafting cap-and-trade legislation Bush would sign.

According to the E&E report, Boucher did not think that having a bill that largely preempted state efforts would be problematic. He went on to say that there need to be more protections for the coal industry, and a minimal cap on emissions for the next twenty years.

Boucher said any measure that forces coal-fired power plants to curb emissions too fast – before carbon capture and sequestration can be widely deployed – would cause major shifts to natural gas and drive up prices.

Boucher said the upcoming climate bill will provide a “somewhat forgiving, a gentle introduction to controls” until carbon capture and storage is ready, which he said would be around 2025. Before that, he said, coal-fired utilities will need other options available to meet obligations, such as purchase of offsets.

“The schedule prior to 2025 has got to be more forgiving,” he told reporters. “The schedule after 2025 can be very rigorous.”

Boucher said Senate proposals would impose major limits too fast. “I don’t think the Senate bills adequately address that need because the control schedule is quite severe in the early years, before we have carbon capture and storage available,” he said. “If they default to natural gas, real harm to the economy occurs.”

CLIMATE: Boucher says White House open to mandatory controls (11/08/2007) Ben Geman, Greenwire senior reporter

A House Democrat writing legislation to require greenhouse gas limits said today that White House officials have privately indicated that President Bush might sign such a bill, despite the administration’s public stance against mandatory controls.

Rep. Rick Boucher (D-Va.) told a business forum that White House officials have not put up a “red light.”

But he outlined several big “ifs.”

“If a bill is presented to the White House that has a bipartisan foundation, if it is industry supported, if it is structured in such a way that it will not cause economic dislocation and that is digestible by the economy, that legislation will be welcomed, it would receive serious consideration and potentially be signed into law,” Boucher said at a climate change forum hosted by the Business Roundtable.

He later told reporters he has been speaking about climate legislation with Bush’s principal climate advisers, including Jim Connaughton, chairman of the Council on Environmental Quality.

CEQ declined to respond directly to Boucher’s comment. “The president has made clear which policies he supports to combat climate change, and he is still waiting on Congress to pass his ‘20 in 10’ legislation,” the agency said in a statement. “We will take a look at all proposals and make our views known as they work their way through the legislative process. We aren’t going to speculate about anything that hasn’t been introduced yet.”

“20 in 10” refers to a White House initiative to curb gasoline use by 20 percent in 10 years through increased use of alternative fuels and greater auto efficiency.

Boucher chairs the Energy and Air Quality Subcommittee. He and Rep. John Dingell (D-Mich.), chairman of the full Energy and Commerce Committee, are planning a cap-and-trade system to control carbon dioxide and other gases that are contributing to global warming. Their plan will seek to curb U.S. emissions between 60 percent and 80 percent by 2050.

Boucher, a coal industry ally, has emphasized that his measure would not cause economic harm. State pre-emption at issue

Boucher would not say whether the bill he is writing would “pre-empt” state efforts – such as those in California and among Northeast states – to enact limits on greenhouse gases. But he suggested that the issue could resolve itself to some degree.

He noted that blocs of states had begun their own efforts to control sulfur dioxide when Congress passed the landmark Clean Air Act amendments of 1990 but that these efforts abated when the federal SO2 cap-and-trade plan was established.

“The regional consortia just dropped away, and they really never materialized beyond whatever stage they had assumed at the time we passed the bill,” Boucher said.

“To some extent I think that is going to happen again,” he added. “Once we put a carbon dioxide control in place, a greenhouse gas control in place, that has nationwide application, I really think you are going to see many of the regional blocs say ‘okay, we are satisfied.’” He added, however, that there could be exceptions and California might be one of them.

Boucher’s comments underscore inevitable regional tensions on climate issues. In a nod to lawmakers from the Northeast and California, Senate climate legislation includes a provision that allows states to set stronger rules than the federal government. Concerns with Senate plans

Boucher said any measure that forces coal-fired power plants to curb emissions too fast – before carbon capture and sequestration can be widely deployed – would cause major shifts to natural gas and drive up prices.

Boucher said the upcoming climate bill will provide a “somewhat forgiving, a gentle introduction to controls” until carbon capture and storage is ready, which he said would be around 2025. Before that, he said, coal-fired utilities will need other options available to meet obligations, such as purchase of offsets.

“The schedule prior to 2025 has got to be more forgiving,” he told reporters. “The schedule after 2025 can be very rigorous.”

Boucher said Senate proposals would impose major limits too fast. “I don’t think the Senate bills adequately address that need because the control schedule is quite severe in the early years, before we have carbon capture and storage available,” he said. “If they default to natural gas, real harm to the economy occurs.”

He did not single any specific bills out for criticism. The Senate Environment and Public Works Committee is currently working on climate legislation sponsored by Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.).

A major group of labor unions, the AFL-CIO, is concerned the Lieberman-Warner measure’s targets for 2020 are “overly aggressive” (E&E Daily, Nov. 8).

Boucher, Dingell in House Energy Committee Call for Cap-and-Trade

Posted by Brad Johnson Wed, 03 Oct 2007 18:28:00 GMT

As he previously announced he would, Energy and Commerce’s Energy and Air Quality Subcommittee chair Rep. Rick Boucher (D-Va.) released the first of a series of white papers on climate legislation today, Scope of a Cap-and-Trade Program.

Based on the hearings earlier this year, the Committee and Subcommittee Chairmen have reached the following conclusions: The United States should reduce its greenhouse gas emissions by between 60 and 80 percent by 2050 to contribute to global efforts to address climate change. To do so, the United States should adopt an economy-wide, mandatory greenhouse gas reduction program. The central component of this program should be a cap-and-trade program. Given the breadth of the economy that will be affected by a national climate change program and the significant environmental consequences at stake, it is important to design a fair program that obtains the maximum emission reductions at the lowest cost and with the least economic disruption. The Subcommittee and full Committee will draft legislation to establish such a program.

Oddly, the white paper fails to mention a baseline for emissions reductions; the scientific consensus for the 80 percent reduction is from 1990 emissions levels.

The white paper makes no recommendations on how credits should be allocated, though Boucher has stated his resistance to auctions in the past. Nor does it discuss interaction with foreign carbon markets or how to deal with imports from unregulated entities.

The white paper argues that complementary measures are necessary:
“Even with a broad-based cap-and-trade program, complementary measures (such as a carbon tax or other tax-based incentives, efficiency or other performance standards, or research and development programs) will also be needed. For example, funding for research, development, and deployment of new technologies would assist industries that will need to adopt new technologies. In addition, efficiency or other performance standards might be appropriate for some economic actors that would be inappropriate to include directly in a cap-and-trade program, but that should contribute to an economy-wide reduction program in some other way.

Proposed measures range from Dingell’s carbon tax, increased CAFE standards, appliance and lighting efficiency standards, a federal renewable energy standard, to carbon sequestration funding.

Further notes are below.

Interestingly, the report draws extensively from the Nicholas Institute for Environmental Policy Solutions September report, Size Thresholds for Greenhouse Gas Regulation: Who Would be Affected by a 10,000-ton CO2 Emissions Rule? The Nicholas Institute is run by Sen. Lieberman’s former environmental counsel, Nick Profeta.

A later white paper will discuss carbon offsets in the agricultural and industrial sector.

Greenhouse gas emissions from other sources in [the industrial] sector (such as landfills) generally may not lend themselves to regulation under a cap-and-trade program if there is difficulty in measuring the emissions accurately. For example, EPA currently operates methane programs that encourages landfills and other soruces to capture gas and use it for electricity generation. . . . The agricultural sector, however, does have significant opportunities to reduce emissions that may lend themselves to measurement, which could make them appropriate as a source of credits or offsets in a cap-and-trade program…. [manure methane capture, cropland biological sinks]... A later White Paper will discuss the potential for using such reductions as offsets or credits as part of the cap-and-trade program.