Lieberman-Warner Day Three: Climate Legislation and Energy Costs

Posted by Gristmill Wed, 04 Jun 2008 20:27:00 GMT

Cross-posted from Gristmill.

Senate Majority Leader Harry Reid (D-Nev.) has said he won’t allow floor debate on the Lieberman-Warner Climate Security Act (S. 3036) to extend beyond next week, according to an article in E&E News (subs. only) today. “If we don’t finish it next week, then it means something has gone wrong,” he’s quoted as saying.

But at an earlier press conference, he told reporters, “I want to be patient and try to get as much done as soon as we can. If we arrive at a point where we’re just wasting our time, we will have to figure out something else.”

If Reid sticks to what he told E&E News, the Senate won’t have a lot of time to debate actual adjustments to the legislation. They’ve already burned two and a half days of debate without getting to any votes on amendments, thanks to procedural stalling by the Republican leadership that called for 30 hours of discussion before moving to amendments. After those 30 hours were expended, they demanded that the entire 492-page bill be read aloud, claiming they hadn’t yet had time to read it.

During those first 30 hours, GOP leaders offered a taste of the fight ahead: They downplayed the need for climate action and framed Lieberman-Warner as a bill that would destroy the economy. John Cornyn (R-Texas) even went so far as to make a chart declaring the bill the “Boxer Climate Tax.”

Some Republicans also attempted to make the case that the bill would increase the cost of gasoline at a time of already-record prices, citing the EPA’s analysis of the bill that projects a $0.53 cent increase in gasoline by 2030. For those of you counting, that’s about $0.02 a year. (Meanwhile, gasoline prices have increased from $1.47 per gallon in January 2001 to more than $4.00 a gallon today.) Kit Bond (R-Mo.) alleged that the Climate Security Act would have us all driving “golf carts,” and called the legislation as a whole a “complicated Soviet-style scheme.” The amendment process has yet to begin, but Republicans have already circulated 90 weakening amendments that they plan to offer.

Democrats, for their part, have argued that the bill will reduce the country’s dependence on oil and increase the use of alternatives, which will bring down energy costs for consumers. They’ve also talked up the bill’s provisions to shield consumers from increases, including an $800 billion consumer tax relief package and a $911 billion allowance to local electricity and gas utilities to help them cushion consumers from price swings, invest in renewables, and promote efficiency.

“Studies do not account for the cost of doing nothing,” said bill sponsor Joe Lieberman (I-Conn.), noting that analyses of Lieberman-Warner have found that GDP would still grow and the economic impacts of the bill would be very small. Even those projections cannot take into account the potential for growth through a new green economy, or what could be lost if emissions are not curbed, argued Lieberman.

Bernie Sanders (I-Vt.), who last year sponsored a tougher climate bill (S. 309) along with Boxer, vowed to introduce an amendment to strengthen the targets for emissions cuts. He also talked up energy efficiency, raising fuel-economy standards, and investing in mass transit as integral means of further reducing emissions.

Meanwhile, everyone is waiting for the Senate to actually get to the amendment process …

Lieberman-Warner Day Three: Republican Leadership Forces Reading of Entire Bill

Posted by Gristmill Wed, 04 Jun 2008 18:31:00 GMT

Cross-posted from Gristmill.

By objecting to the unanimous consent request to dispense with the reading of the Lieberman-Warner Climate Security Act (S. 3036), Republicans are forcing the clerk to read the entirety of the Boxer substitute amendment [PDF], claiming they haven’t had enough time to read it yet. Boxer, of course, protested, but her appeal was rejected.

Post-cloture consideration of the motion to proceed to the Lieberman-Warner Climate Security Act of 2008 (S. 3036)

Posted by Brad Johnson Wed, 04 Jun 2008 13:30:00 GMT

The Senate will convene at 9:30 am.



  • Byron Dorgan (D-N.D.)
  • Bill Nelson (D-Fla.)
  • John Cornyn (R-Texas)
  • Jeff Sessions (R-Ala.)
  • Saxby Chambliss (R-Ga.)
  • Tom Carper (D-Del.)
  • George Voinovich (R-Ohio)
  • Kit Bond (R-Mo.)
  • David Vitter (R-La.)
  • Pete Domenici (R-N.Mex.)

11:30 AM: Other business.

Morning business resumes at 12:15 PM.

  • Thad Cochran (R-Miss.)
  • Byron Dorgan (D-N.D.)

Lieberman-Warner Day Two: Pre-Consideration Debate

Posted by Gristmill Wed, 04 Jun 2008 02:22:00 GMT

Cross-posted from Gristmill.

After last night’s cloture vote, Senate Republicans asked for 30 hours before legislatively productive debate on the Lieberman-Warner Climate Security Act (S. 3036) could begin.

Here’s the top Lieberman-Warner news of the day, in summation:

  • Majority Leader Harry Reid (D-Nev.) blasted Republicans for delaying and dragging out debate on the legislation. “Republicans forced us to waste two days before a vote that they overwhelmingly supported,” said Reid. “Now, our Republican friends are forcing us to burn another 30 hours of procedural time before we can begin debate. That’s two filibusters and more than three days of valuable Senate time wasted – all for a vote that most Republicans supported.”
  • George Voinovich (R-Ohio), sponsor of his own industry-friendly alternative climate plan, discussed why he thinks the federal government should invest in technology first and put in place caps later. He said it would be an effort to help developing nations who need the technology. A more cynical read might be that it reflects the interests of the energy industry lobbyists that helped him write it.
  • Bill Nelson (D-Fla.) talked about the strain that $4-a-gallon-plus gas prices have put on the wallets of his constituents, and talked up why the Senate should pass a bill that will help move America away from reliance on oil. “The answer is not just drill,” said Nelson. “The answer is alternative energy sources.”
  • Johnny Isakson (R-Ga.) bemoaned the fact that the bill as is doesn’t contain explicit support for the nuclear power industry. Lieberman and Warner have already floated an amendment [PDF] that would add such support, but Isakson is pretty livid that it’s not in the main bill. “If it’s part of the solution, why is it not a part of the Lieberman-Warner climate legislation?” he asked, accusing those who don’t want such language in the bill of “bias.” He also said he’s going to propose an amendment to include $25 billion in tax credits for the preservation of open space and public lands for the purpose of sequestering carbon emissions. He does not appear aware of the fact that the bill already contains significant support for the use of offsets, much of which would go to passive sequestration in agriculture and forestry.
  • Barbara Boxer (D-Calif.) challenged Isakson on nukes, saying the bill already does enough for the industry without giving it preferential treatment—she pointed to the support of corporations like Exelon.
  • Bob Corker (R-Tenn.) talked about the problems with the bill’s allowance allocations to entities like state governments, and argued that not enough of the auction revenues would be returned to the public. He called the bill the “mother of all earmarks” because it would bring trillions of dollars into the treasury and redistribute it to “interest groups.” He’s talked about this before, which David Roberts covered here.
  • Arlen Specter (R-Pa.) talked about the amendments he’s going to propose, which include lowering the emissions reductions targets to the levels in the bill he cosponsored with Jeff Bingaman (D-N.M.), inserting the safety-valve also included in Bingaman-Specter, adding something about “technology acceleration,” including stronger language on “international competitiveness,” and inserting more support for coal to give it a “pathway to the future.”
  • Dick Durbin (D-Ill.) equated taking action on climate change to fighting fascism, and cited all the public health and national security gains to be made by doing so. Dianne Feinstein (D-Calif.), John Kerry (D-Mass.) and Sheldon Whitehouse (D-Conn.) each spoke at length about all the scientific reasons that comprehensive, strong action is imperative now. Bob Casey (D-Pa.) talked about the concerns climate change poses for food security, and called inaction “immoral.”
  • John Barrasso and Mike Enzi (both R-Wyo.) each took a turn to bemoaning the possible economic ramifications of the bill, which they fear will harm industries, workers, small refineries, puppies, etc. Enzi proclaimed: “I’m not a fear-mongerer, I’m an environmentalist,” he said. But, he added, “I suspect folks in Wyoming are not willing to pay the costs of this bill.”
  • Chuck Grassley (R-Iowa) also attempted to play compassionate conservative, claiming that this bill threatens low-income Americans, but then went on to complain about the very provisions of the bill intended to protect those consumers. Larry Craig did some concern-trolling on behalf of consumers as well: “Why don’t we call this bill the China-India Economic Stimulus Act of 2008?” asked Craig, before going on to talk about how awesome forests are because they sequester carbon. And yes, he’s still in the Senate.
  • Lamar Alexander (R-Tenn.) admitted that we need to cap carbon emissions, but said that this bill is “too complicated, too expensive.” He also complained about the EPA’s analysis of the bill that projects a $0.53 cent increase in gasoline by 2030. For those of you counting, that’s about $0.02 a year. Meanwhile, gasoline prices have increased from $1.47 per gallon in Jan. 2001, to more than $4.00 a gallon today.
  • Sponsors Joe Lieberman (I-Conn.), John Warner (R-Va.), and Barbara Boxer (D-Calif.) took turns defending the legislation throughout the day.
  • James Inhofe (R-Okla.) took every opportunity granted him to poo-poo the bill.
  • Olympia Snowe (R-Maine) became only the second Republican of the day (after Warner, of course) to speak in favor of the legislation. “It’s a human issue, a planetary issue, a moral issue,” said Snowe. “The science of the matter tells us that business as usual is certainly not an option.”
  • Snowe was later joined by Elizabeth Dole (R-N.C.), who also spoke in favor of the bill that she is co-sponsoring. Dole also pushed for the explicit inclusion of support for nuclear power.
  • Bernie Sanders (I-Vt.) vowed to introduce an amendment to strengthen the targets for emissions cuts. He also talked up energy efficiency, raising fuel economy standards, and investing in mass transit.

Those are the most interesting contributions to today’s debate, which didn’t wrap up until 9 p.m. EST. Overall, it provided insight to how the amendment process will play out. Opponents of action will paint it as a question of the economy versus the environment, and supporters will fight tooth-and-nail to prove that not only is this the bill science says we need to fight climate change, but it will help the economy, create new jobs, and improve national security.

Lieberman-Warner Debate: Afternoon Schedule

Posted by Brad Johnson Tue, 03 Jun 2008 17:41:00 GMT

Below is the schedule for the afternoon debate, as agreed to by universal consent before the lunch break. Between each speaker’s alloted time is five minutes for rebuttal from the opposing side. The times below depend, of course, on no additional delays be added to the schedule.
2:15 PMBoxer
2:40 PMInhofe
3:15 PM Kerry
3:50 PM Barrasso
4:10 PMWhitehouse
4:30 PM Grassley
4:50 PM Casey
5:10 PM Enzi
5:35 PM Carper
6:10 PM Alexander
6:35 PM Warner
7:00 PM Bond
7:25 PM Lieberman
8:00 PM Vitter
8:20 PM Nelson (Fla.)
8:40 PM Craig
9:00 PM Democrat to be named
9:20 PM Gregg

Post-cloture consideration of the motion to proceed to the Lieberman-Warner Climate Security Act of 2008 (S. 3036)

Posted by Brad Johnson Tue, 03 Jun 2008 15:00:00 GMT

The Senate will convene at 10am.

Morning business until 11am. The first 30 minutes will be under Republican control; the next 30 minutes will be under Democratic control.

Following morning business, the Senate will resume post-cloture consideration of the motion to proceed to the Lieberman-Warner Climate Security Act of 2008 (S. 3036).

The Senate will recess for the Weekly Caucus Lunches from 12:30pm till about 2:15pm.

By unanimous consent, all time during any adjournment, recess, or period of morning business will count toward the 30-hour post-cloture time limitation.

Senate Votes to Proceed to Debate on Lieberman-Warner

Posted by Brad Johnson Mon, 02 Jun 2008 20:37:00 GMT

In a 74-14 roll call vote, the Senate invoked cloture on the motion to proceed to consider the Lieberman-Warner Climate Security Act (S. 3036). Republicans refused to allow Majority Leader Harry Reid dispense with the thirty hours of debate permitted under Senate rules before official consideration of S. 3036 begins, thus ensuring another full day of debate on the issue.

The senators voting against the motion were Byrd (D-W. Va.), and Republicans Bunning, Shelby, Craig, DeMint, Hatch, Enzi, Barasso, Sessions, Coburn, Kyl, McConnell, Allard, Inhofe.

USCAP Offshoot Announces Support For Lieberman-Warner

Posted by Brad Johnson Mon, 02 Jun 2008 20:24:00 GMT

A coalition of corporations, labor, religious and environmental organizations has announced its support of Sen. Barbara Boxer’s (D-CA) manager’s mark of the Lieberman-Warner Climate Security Act. Several are members of the United States Climate Action Partnership (USCAP), which called for mandatory climate legislation in January 2007, but more recently has been wrapped in internal conflict.

The letter begins:
The undersigned companies and organizations urge you to vote in favor of the Climate Security Act, S. 3036 (formerly S. 2191), which is expected to be considered by the full Senate beginning June 2. This is a very important vote on a bipartisan plan to address climate change. Prompt action on climate change is essential to protect America’s economy, security, quality of life and natural environment.

USCAP signatories are Alcoa, Environmental Defense Action Fund, Exelon Corporation, FPL Group, General Electric, National Wildlife Federation, Natural Resources Defense Council, NRG Energy, Inc, and PG&E Corporation. Non-USCAP signatories are Calpine Corporation, Interfaith Power and Light Campaign, International Brotherhood of Boilermakers, Izaak Walton League of America, National Grid, National Parks Conservation Association, Pew Environment Group, Public Service Enterprise Group, Trout Unlimited, and the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting (UA).

Full text is below:

Alcoa * Calpine Corporation * Environmental Defense Action Fund * Exelon Corporation * FPL Group * General Electric * Interfaith Power and Light Campaign * International Brotherhood of Boilermakers * Izaak Walton League of America * National Grid * National Parks Conservation Association * National Wildlife Federation * Natural Resources Defense Council * NRG Energy, Inc. * Pew Environment Group * PG&E Corporation * Public Service Enterprise Group * Trout Unlimited * UAM

Dear Senator:

The undersigned companies and organizations urge you to vote in favor of the Climate Security Act, S. 3036 (formerly S. 2191), which is expected to be considered by the full Senate beginning June 2. This is a very important vote on a bipartisan plan to address climate change. Prompt action on climate change is essential to protect America’s economy, security, quality of life and natural environment.

The Climate Security Act, as revised in the manager’s substitute amendment released last week, sets forth a sound overall framework for reducing America’s emissions of greenhouse gases. Most notably, it establishes an emissions cap that steadily reduces greenhouse gas emissions from current levels at a rate of about 1.8% annually. The bill creates a flexible cap-and-trade system to achieve these reductions at lower cost by tapping the power of free markets. It includes an unprecedented national investment in zero- and low-carbon technologies, and includes important policies to advance energy efficiency and alternative energy sources. The bill provides assistance to small energy consumers, including low-income families, to ease the transition to a low-carbon economy. And the bill protects American industry to ease the transition to a cleaner future.

We all support the framework and approach contained in the Climate Security Act. However, we also recognize that there is continued work to be done to refine the details of the legislation through the amendment process in the Senate and as a bill is taken up in the House. Some of the undersigned groups have already communicated with you on amendments and will continue to do so and others may do so later.

However, we think it is notable and a testament to the work of the bill’s sponsors and contributors that such a diverse group of interests are united on the following essential issue: A “yes” vote for the Climate Security Act represents historic leadership to advance bipartisan solutions to climate change; a “no” vote will slow progress and maintain the status quo, which only increases the risks of unavoidable consequences and potentially greater economic costs that could result from the need for even steeper reductions in the future. Sincerely,

Lee Califf Director, Government Affairs

Alcoa Yvonne A. McIntyre Vice President, Federal Legislative Affairs Calpine Corporation

Elizabeth Thompson Legislative Director Environmental Defense Action Fund

Betsy Moler Executive VP, Government and Enviro Affairs and Public Policy Exelon Corporation

Chris Bennett Executive Vice President FPL Group

Ann R. Klee Vice President Corporate Environmental Programs General Electric

The Rev. Canon Sally G. Bingham Founder and President The Regeneration Project Interfaith Power and Light Campaign

Newton B. Jones International President The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers, and Helpers

Scott Kovarovics Conservation Director Izaak Walton League of America

Thomas B. King Executive Director of Electricity Distribution and Generation National Grid

Mark Wenzler Director, Clean Air and Climate Programs National Parks Conservation Association

Jeremy Symons Executive Director, Global Warming Program National Wildlife Federation

David Hawkins Director of Climate Programs Natural Resources Defense Council

Steven Corneli Vice President Market and Climate Policy NRG Energy, Inc.

Phyllis Cuttino Director, US Global Warming Campaign Pew Environment Group

Melissa Lavinson Director, Federal Environmental Affairs and Corporate Responsibility PG&E Corporation

Eric Svenson VP of Environment, Health and Safety Public Service Enterprise Group

Steve Moyer Vice President for Government Affairs Trout Unlimited

William P. Hite General President United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada

Vote to Proceed to Consideration of Climate Security Act (S. 3036) 1

Posted by Brad Johnson Mon, 02 Jun 2008 18:00:00 GMT

Senate will resume consideration of the motion to proceed to consideration of S. 3036, Climate Security Act, and vote on the motion to invoke cloture on the motion to proceed at approximately 5:30 p.m.

White House Threatens Veto of Lieberman-Warner

Posted by Brad Johnson Mon, 02 Jun 2008 16:40:00 GMT

The White House has issued a Statement of Administrative Policy (SAP) on the Lieberman-Warner Climate Security Act (S. 3036), indicating that President Bush will veto the bill, citing fundamental differences with its approach, including mandatory emissions reductions and carbon pricing. The full text of the SAP is below.


S. 3036 – Lieberman-Warner Climate Security Act

(Sen. Boxer (D) CA)

The Administration believes that climate change is an important issue and is taking significant domestic and international actions to address it. As Congress debates this important issue, it must recognize that bad legislation would raise fuel prices and raise taxes on Americans without accomplishing the important goals the Administration shares. This debate should be guided by certain core principles and a clear appreciation that there is a right way and a wrong way to approach reducing greenhouse gas emissions.

The right way is:
  • to set realistic goals for reducing emissions consistent with advances in technology, while increasing our energy security and ensuring growth in our economy;
  • to adopt policies that spur investment in new technologies needed to reduce greenhouse gas (GHG) emissions without unreasonable burdens on consumers and workers;
  • to expand emission-free nuclear power generation and encourage the investments necessary to produce electricity from coal without releasing carbon into the air;
  • to ensure that all major economies are bound to take action and to work cooperatively with our partners for a fair and effective international climate agreement;
  • to lower trade barriers and create a global free market for clean energy technologies, making advanced technology more affordable and available in the developing world; and
  • to prevent the misapplication of other environmental laws, such as the Clean Air Act, the Endangered Species Act and the National Environmental Policy Act, not designed to address greenhouse gases as part of any new GHG specific framework.
The wrong way, as reflected by S. 3036 and the Boxer Amendment, is:
  • to sharply raise the price of gas, raise taxes, or demand drastic emissions cuts that have no chance of being realized and every chance of hurting our economy;
  • to impose burdensome new mandates on top of ones that were enacted just last year;
  • to leave limitations on nuclear power generation and waste disposal unaddressed;
  • to establish unrealistic timeframes for massively restructuring the economy that assume the use of technologies not yet developed or demonstrated to be economically feasible;
  • to create a system that will squeeze household income, cost many jobs, reduce growth in the economy, impose a huge new tax, and create uncontrolled spending;
  • to take unilateral action that will undercut efforts to get developing countries to limit their emissions while having negligible effect on GHG concentrations and global temperatures;
  • to impose counterproductive provisions that could ignite a carbon-based trade war; and
  • to allow the misapplication of a patchwork of 30-year-old laws that were not designed to regulate greenhouse gas emissions.
For these and other reasons stated below, the President would veto this bill.

The Administration is taking serious steps to address climate change. By the end of this Administration, the Federal government will have spent almost $45 billion to support climate change-related programs, with $40 billion in loan guarantees made available to support investments in technologies that will reduce greenhouse gases. Further, the recently enacted Energy Independence and Security Act of 2007, which generally followed the President’s “Twenty in Ten” Initiative, will reduce GHG emissions by billions of tons. Additionally, the Administration is working with all major economies and through the United Nations negotiation process to ensure a new international climate change framework is both environmentally effective and economically sustainable.

At the outset, S. 3036 fails to address the misapplication to GHG emissions of statutes that clearly were not designed specifically to regulate these global emissions, such as the Clean Air Act, the Endangered Species Act, and the National Environmental Policy Act. It also fails to align its new mandates with those enacted just five months ago governing fuel economy, alternative fuels production, and energy efficiency. The bill would add to, rather than substitute for, a 30-year patchwork of environmental laws that would impose a great cost on the economy, and would create misallocations of economic resources, statutory conflict and confusion, and perpetual litigation. The bill also permits a State, without any precondition, to impose more stringent GHG emission restrictions, thereby rendering the bill potentially a mere floor to fifty separate regulatory regimes, in which one state could seek to regulate the economies of others.

Hurts Consumers

Legislation on this important issue should balance three goals: address climate change, increase energy security, and facilitate economic growth. This legislation lacks this balance and sacrifices consumer welfare and economic growth for marginal reductions in future global GHG concentrations. Consequently, the impact on consumers from the combination of the high compliance costs and the new tax and spend programs would be enormous. The current national average gasoline price is nearing $4 per gallon. This bill would increase gasoline prices another $0.53 per gallon relative to the expected price in 2030 and another $1.40 per gallon relative to the expected price in 2050. Furthermore, it would increase electricity prices 44 percent in 2030 and 26 percent in 2050. The combined effects of this bill would diminish household disposable income – EPA estimates this bill would reduce a typical American household’s purchases by nearly $1400 in 2030 and as much as $4400 in 2050.

Shrinks the Economy

S. 3036 is likely to severely damage the economy and drive jobs overseas. As an example, the Environmental Protection Agency (EPA) and the Energy Information Administration have estimated, respectively, that the bill as reported could reduce U.S. Gross Domestic Product by as much as seven percent (over $2.8 trillion) in 2050, and reduce U.S. manufacturing output by almost 10 percent in 2030 – before even half of the bill’s required reductions have taken effect.

Imposes Excessive Regulatory Costs

S. 3036’s approach to reducing greenhouse gases would force drastic and costly emission cuts. EPA estimates the costs necessary to achieve this GHG abatement are on the order of $10 trillion through 2050. This would make S. 3036 by far the single most expensive regulatory bill in our Nation’s history. These costs would be passed on to consumers through higher electricity and heating bills and increased gasoline costs. In fact, the abatement costs for this bill are estimated to be approximately three times as much as previous Senate climate bills analyzed by EPA.

Implements a Tax and Spend System

S. 3036 and the Boxer Amendment would, in effect, constitute one of the largest tax and spend bills in our Nation’s history, costing Americans dramatically more than the BTU energy tax proposals rejected by the Congress in 1993. Furthermore, the bill’s inefficient allocation scheme for emission allowances would create arbitrary winners and losers and inefficiently distort economic incentives for production and innovation.

Based on EPA’s recent analysis, the bill would raise approximately $6.2 trillion in constant dollars ($11.8 trillion with inflation) through the auction of GHG emission allowances to owners and operators of utilities and factories who would have to purchase allowances to stay in business. In addition, the bill gives away allowances valued at $3.2 trillion for auction by States, foreign governments, and private entities. The cost of purchasing these allowances also would be passed on to consumers as higher prices. This would amount to a regressive “stealth” tax that would hit low and middle income working families hardest.

Expands Mandatory Spending Irresponsibly

This new tax would take funds out of consumers’ wallets to add $2.6 trillion through 2050 in new mandatory, automatic spending, which already consumes 62 percent of the Federal budget. For example, the bill includes $346 billion in entitlement spending on new training and income support programs at the Department of Labor, and $750 billion in new mandatory foreign aid financed by auction revenue and emission allowance giveaways to foreign countries, without any control or oversight through the annual appropriations process.

Creates New Bureaucracies

The bill creates a new Climate Change Technology Board, as a so-called independent agency, with the authority to distribute $750 billion worth of funding and emissions allowances through 2050 to finance various energy efficiency programs. The bill also creates a new International Climate Change Commission, which would have the authority to determine whether foreign countries are taking sufficient action to prevent climate change and to undertake enforcement actions, such as the prohibition of certain imports, as a penalty for countries that do not take sufficient steps. The establishment of these unaccountable entities raises serious constitutional concerns, particularly with respect to the restrictions placed upon the President’s authority to both appoint and remove members of these entities.

Risks Trade Conflicts

The provisions for international reserve allowances would harm efforts to persuade major developing countries to take action to limit their GHG emissions. Reserve allowances effectively impose an import surcharge which would lead to higher prices for U.S. consumers and could lead targeted countries to impose similar restrictions on U.S. exports based on their own unilateral definitions of comparable action. That would result in serious trade conflicts and impose significant costs on the U.S. and global economies. Major developing economies would be less, not more, amenable to make hard choices in international climate negotiations. Thus, these provisions would be counterproductive to U.S. efforts to ensure that all major GHG emitting developing countries commit to concrete national actions to limit emissions. Rather than relying on the prospect of punitive trade sanctions, an effort should be made to foster trade liberalization to promote economic growth and the deployment of clean technologies.

Fails to Achieve Stated Goals

The bill’s unilateral approach would jeopardize American competitiveness and drive jobs abroad, often simply relocating greenhouse gas emissions to other countries, rather than reducing them. These steep domestic costs would thus be accompanied by only minuscule changes in global concentrations of greenhouse gases – between 7-10 parts per million (ppm),or 1-2 percent, in 2050, and 25 – 28 ppm, or 3-5 percent, in 2095, as estimated by EPA. For comparison, an increase of 90 ppm would result in roughly a one degree Celsius increase in the global temperature, based on Intergovernmental Panel on Climate Change estimates.

Expands Davis-Bacon Act

The substitute would expand Davis-Bacon Act prevailing wage requirements to cover several new programs of grants and “rewards” for projects relating to renewable energy, low or zero carbon generation technology, and carbon capture technologies that are authorized under the bill. Such an expansion is contrary to the Administration’s longstanding policy of opposing any expansion of the application of the Davis-Bacon Act’s prevailing wage requirements.

Creates Legal Problems

Several provisions in the bill purport to direct or burden the conduct of foreign relations relating to climate change in a manner inconsistent with the constitutional authority of the President to conduct foreign policy and to safeguard sensitive diplomatic information. In addition, the bill, as amended, would authorize the President to modify any requirement of this bill, for a specified time period, if he determines that a national security, energy security, or economic security emergency exists and that doing so is in the paramount interest of the United States. However, the bill raises practical and constitutional concerns by making the President’s decision subject to legislative and judicial oversight.

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