On Wednesday, Sen. Olympia Snowe (R-Maine) announced her support for S. 3036, saying it “mirrors closely” the Kerry-Snowe Global Reduction Act (S. 485), which calls for a 65 percent reduction from 2000 levels of greenhouse gases by 2050. Snowe also noted that language from the Feinstein-Snowe Emission Allowance Market Transparency Act (S. 2423) was included in the manager’s mark.
Unlike Lieberman-Warner, Kerry-Snowe also sets a goal of achieving a greenhouse gas stabilization target of 450 ppm, and calls for the establishment of vehicle emissions standards. In Snowe’s press release, she states that Lieberman-Warner “would reduce greenhouse gas emissions by at least 66 percent by 2050,” although NRDC analysis of the bill finds that Lieberman-Warner would only achieve reductions between 60 to 65 percent from 2000 levels.
On Wednesday, Senate Majority Leader Harry Reid (D-Nev.) introduced Sen. Barbara Boxer’s (D-Calif.) manager’s mark of the Lieberman-Warner Climate Security Act (S. 2191) as a new bill, numbered S. 3036. S. 3036 will be the vehicle for the floor debate of the cap-and-trade legislation. On Thursday, Reid filed for cloture on a motion to proceed onto the bill, setting the stage for a 5:30 p.m. vote on June 2, one week from Monday. According to E&E News, “Few expect the vote to be contentious.”
“It may even end up being 99-0,” said Andrew Wheeler, staff director for Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.). Inhofe plans to back this procedural step as a gateway to a bigger debate over the merits of the legislation, Wheeler said.
Reid, Boxer, and the bill’s co-sponsors, Joe Lieberman (I-Conn.) and John Warner (R-Va.), have not determined what terms they will seek for the debate and amendment process. Reid has the option of exerting privilege to block unwanted amendments by “filling the tree” with his own.
Download the Full document. Titles are after the break.
Title I Immediate Action
- Subtitle A Tracking Greenhouse‐Gas Emissions
- Subtitle B Early Clean Technology Deployment
- Subtitle C Research
Title II Capping Greenhouse‐Gas Emissions
Title III Reducing Emissions Through Offsets and International Allowances
- Subtitle A Offsets in the United States
- Subtitle B Offsets and Emission Allowances From Other Nations
- Subtitle C Agriculture and Forestry Program in the United States
Title IV Establishing a Greenhouse‐Gas Emissions Trading Market
- Subtitle A Trading
- Subtitle B Market Oversight and Enforcement
- Subtitle C Carbon Market Efficiency Board
- Subtitle D Climate Change Technology Board
- Subtitle E Auction on Consignment
Title V Federal Program to Prevent Economic Hardship
- Subtitle A Banking
- Subtitle H Transition Assistance for Natural‐Gas Processors
- Subtitle I Federal Program for Consumers
Title VI Partnerships with States, Localities and Indian Tribes
- Subtitle A Partnerships with State Governments to Prevent Economic Hardship While Promoting Efficiency
- Subtitle B Partnerships with States, Localities, and Indian Tribes to Reduce Emissions
- Subtitle C Partnerships with States and Indian Tribes to Adapt to Climate Change
- Subtitle D Partnerships with States, Localities, and Indian Tribes to Protect Natural Resources
Title VII Recognizing Early Action
Title VIII Efficiency and Renewable Energy
- Subtitle A Efficient Buildings
- Subtitle B Efficient Equipment and Appliances
- Subtitle C Efficient Manufacturing
- Subtitle D Renewable Energy
Title IX Low‐Carbon Electricity and Advanced Research
- Subtitle A Low‐ and Zero‐Carbon Electricity Technology
- Subtitle B Advanced Research
Title X Future of Coal
- Subtitle A Kick‐Start for Carbon Capture and Sequestration
- Subtitle B Long‐Term Carbon Capture and Sequestration Incentives
- Subtitle C Legal Framework
Title XI Future of Transportation
- Subtitle A Kick‐Start for Clean Commercial Fleets 3
- Subtitle B Advanced Vehicle Manufacturers
- Subtitle C Cellulosic Biofuel
- Subtitle D Low‐Carbon Fuel Standard
Title XII Federal Program to Protect Natural Resources
- Subtitle A Funds
- Subtitle B Bureau of Land Management Emergency Firefighting Program
- Subtitle C Forest Service Emergency Firefighting Program
- Subtitle D National Wildlife Adaptation Strategy
- Subtitle E National Wildlife Adaptation Program
Title XIII International Partnerships to Reduce Emissions and Adapt
- Subtitle A Promoting Fairness While Reducing Emissions
- Subtitle B International Partnerships to Reduce Deforestation and Forest Degradation
- Subtitle C International Partnerships to Deploy Clean Technology
- Subtitle D International Partnerships to Adapt to Climate Change and Protect National Security
Title XIV Reducing the Deficit
Title XV Capping Hydrofluorocarbon Emissions
Title XVI Periodic Reviews and Recommendations
Title XVII Miscellaneous
- Subtitle A Climate Security Act Administrative Fund
- Subtitle B Paramount Interest Waiver
- Subtitle C Administrative Procedure and Judicial Review
- Subtitle D State Authority
- Subtitle E Tribal Authority
- Subtitle F Retail Carbon Offsets
- Subtitle G Clean Air Act
- Subtitle H Study on State‐Federal Program Interaction
Representatives from CRS, EIA, EPA, and CBO discuss their economic analyses of Lieberman-Warner (S. 2191) and other emissions-controlling climate legislative proposals.Witnesses
- Brent Yacobucci, Congressional Research Service
- Dr. Larry Parker, Congressional Research Service
- Dr. Howard Gruenspecht, Deputy Administrator, Energy Information Administration
- Dr. Brian McLean, U.S. Environmental Protection Agency
- Dr. Peter Orszag, Congressional Budget Office
10:03 Domenici: The more of these hearings we can do the better off this country will be. We have five cap-and-trade bills in the Senate. Every single day, 11 out of 11 studies have concluded that these bills will result in higher energy costs, lower economic growth. The analyses of L-W don’t agree on much. Addressing global climate change is one of the greatest challenges of our time. I remain concerned about the dire consequences L-W could have for our nation. The best estimates of our capable minds often prove inaccurate. The EIA projection for oil prices in 2010 was $25. Even the projected environmental impacts of climate change have varied. IPCC’s assessment of sea level rise was reduced from three feet to 27 inches. Very few will have been able to provide input on the manager’s amendment. We’re all working on a bill that will be irrelevant. It is critical to look at what other countries have tried to do.
Assume the president signs L-W. What will we have achieved for the environment? Close to nothing. Without international participation, L-W will have reduced greenhouse gases by 1% by 2050.
China has surpassed us in global warming emissions. Addressing climate change is a great challenge, but not the only challenge we face.
Rather than choosing among cap-and-trade programs, we could look at promoting nuclear power and other tax incentives.
10:16 Bingaman Orzag recently testified before the Finance Committee.
10:17 Yacobucci explains a cap-and-trade system.
10:22 Parker CRS has conducted a review and synthesis of models projecting costs of S. 2191. Long-term cost projections are at best speculative.
10:30 Gruenspecht The projected impacts of L-W are highly sensitive to assumptions about availability of low and no-carbon energy sources and access to international offsets. Costs are roughly three times larger under least favorable assumptions than under most favorable assumptions. 80-90% of emissions reductions are in the electricity production sector. Over 90% of coal, the main emissions source impacted by a cap, goes into electricity production.
10:37 McLean discusses EPA report.
10:43 Orzag Addressing climate change will involve short-term economic costs. Timing is important. An inflexible cap is bad. Giving the permits away is equivalent to auctioning the permits and giving the money to the polluters. Two key factors of a cap-and-trade system include timing flexibility and auction revenue.
10:49 Bingaman A NAM/ACCF study envisions 75% higher allowance costs than the EIA study but economic impact three times higher. Can you explain why?
Gruenspecht The allowance price difference reflect some of the assumptions, like the absence of banking. We were surprised by the size of macroeconomic losses done for NAM. We asked to look at some of their modeling results and met with their contractor. They used EIA’s high-priced oil policy scenario but compared it to the low-price scenario. We think there are some abnormal results in their report.
Bingaman Basically there’s double-counting?
Gruenspecht They’re mixing the impact of two different things.
Bingaman A price ceiling and floor is the best mechanism?
Orzag I don’t want to say best, but yes.
10:55 Barrasso Effect on gas prices?
Gruenspecht If electricity sector can’t reduce emissions, gas price effect can range from $0.40 to $1.00.
Barrasso I want Americans to be aware of the effects on their pocketbook. You talk about uncertainties. The uncertainties are one of magnitude, not direction: how many jobs will be lost. Will a safety valve help?
Parker A safety valve – putting an upper limit on price – is a very effective of limiting economic impact.
Barrasso There’s going to be lower wages and lower returns for retirement plans no matter what you do.
Parker Prices will go up but whether or not bills will go up depends on individual action. We found bills may go down.
Barrasso Nuclear energy.
Gruenspecht Public acceptance is important.
11:07 Sanders What happens if you don’t act?
Orzag I think climate change is among the nation’s and world’s highest long-term risk. There is some danger of catastrophic change. The question is one of timing. It’s like paying an insurance premium.
Sanders We’re paying $10 billion more for Katrina. What will flooding, drought, war cost? That’s really what we’re debating. It’s disaster if we don’t go forward. I believe you’re underestimating efficiency and renewable energy. Of course there going to be economic dislocation.
McLean On the impacts. I think this is an area that concerns us greatly. It’s a very hard area to quantify and monetize. We’re working on that. On energy efficiency and renewables, there’s a lot we can say about that. We show a huge increase in renewable energy.
Corker The bill that came out is not just a cap-and-trade bill. It’s a huge spending bill. It spends every penny in a non-discretionary way. I think the whole issue of allowances because we’re passing out what is like public shares in a public company. I know the romance of this is interesting. There’s a lot underneath this that is going to affect us. Transfering trillions of dollars of wealth. $7.2 trillion, maybe $23 trillion. I think that’s important. I don’t understand why we would be allocating credits out to middlemen.
In essence this bill transfers out hundreds of billions of dollars to states for no reason.
Orzag It is a key insight that much of this money represents a windfall.
Corker It makes absolutely no sense to give allowances to people not involved in emissions. This bill provides for us to provide international credits. What it does do is transfer out, when we have a trade deficit, hundreds of billions of dollars to projects that are often wracked with fraud.
McLean What would states do with money? I’m not defending the amount of money or the policy decision. A lot of efficiency programs are run at the state level.
Corker I hope this is a dry run.
11:24 Salazar What we’re doing is defining a new energy future for America. There’s a lot of learning yet to be had. On the allocation of the auction revenues. Is this the right allocation?
Orzag It depends what your objective is. Low-income households, minimize macroeconomic costs, spur innovation. A more effective approach to cushion macroeconomic costs would be to auction the permits and use that to reduce payroll taxes.
Salazar A lot of people have talked about a Manhattan-style project. Would it be better to put the money into that pot than to lower costs on low-income consumers?
Orzag It’s big, but there is a given size. You can’t do all things for all people at all times. The price signal will do some things. You can auction revenue and explicitly fund R&D. Or allocate permits to entities that do the work, but that would be more opaque.
Gruenspecht There are issues of economic efficiency and fairness.
Salazar We have these great thoughts and great programs. We talk about hybrids and clean-coal technology. This is an opportunity to marry our work to deal with climate change to make our vision a reality.
11:32 Domenici You’re talking about this as if it is another huge Federal Reserve System. You have made it eminently clear. I think people are going to be very quizzical about what we’re doing. I believe is what we really need to do is develop new technology as rapidly as possible to clean up what we need to clean up, and then clean things up.
Murkowski Is it fair?
Parker None of the models will give you the answer reliably what the cost will be. What the models can do is whether we’ve designed the bill to hold the price down. How can they be modified to bring these reductions at the most economic level.
Murkowski Most useful, but for whose end? If I’m opposed to cap-and-trade, I’ll look at NAM’s model. We can use these models as we use statistics to support our particular situation.
Gruenspecht The different studies start from different baselines. They analyze different provisions. CRA gets a large impact from the low-carbon fuel standard. I already had a long discussion with NAM may have wrapped up two different scenarios. It’s technology and technology acceptance.
12:00 Craig I don’t know if I’m willing to risk Idahoans on the environmental or economic models of climate change. We spent years shaping energy legislation. You’re all over the field, as is the country. I’m not quite sure I can remember, have we as a Congress ever tried to micromanage the market. And I think the answer is no, never before. We’re averaging about 1.9 hurricanes in the United States. An average of $5 billion. The impact of this bill is between three to nine hundred hurricanes. We’ve spread the hurricane hit nationwide. It isn’t just Florida and the Gulf Coast and the East Coast. Now the whole country gets hit, from an economic point of view. Old speak, new speak or green speak, I don’t know where we are. But I suspect no speak is the best way for us to go.
12:08 Bingaman Second-order impacts like employment?
Parker Once you move from first-order to second-order impacts you lose even more certainty. You’re making a whole host of assumptions about a quality of life of a generation that doesn’t even now work. My concerns would be increased when talking about employment numbers.
Orzag The main effect will be on the type of jobs, not the number of jobs.
Bingaman There’s no effort to adjust for dynamic effects.
Orzag I tend not to focus on the job numbers that come out of these assessments.
Gruenspecht I too tend to be very skeptical of job numbers.
Corker Right now 52% of auction proceeds go into technology development. A five-person board, not the Congress, decides how this money is spent. Would this distinguished, mind-numbing panel agree that upstream is a direct tax, pretty much?
Orzag In economics, direct and indirect taxes have a specific meaning. But consumers will bear pretty much all of the cost no matter what.
Corker Upstream is easier to monitor. This is in essence a tax. It is in fact a carbon tax. What’s happened is interest groups have gathered around the table and have made what could have been very simple with a carbon tax very complicated. I’d like you to address the efficacy of a carbon tax that increased over time.
Orzag Economic analysis generally suggest that a carbon tax is more efficient. You can make the cap-and-trade similarly efficient by auctioning all the permits and offering significant flexibility in timing.
Corker And we’re allocating about 70% up front.
Orzag At the very start it’s even greater.
Yacobucci You’d still have to decide where that money goes if it’s a tax.
Corker We’re going to be offering an amendment to return all the revenues to consumers. We’re going to be debating on the floor a tax. Two candidates for president advocated a gas-tax holiday. I think we need to be very transparent about this. Citizens need to know we’re driving up the price of petroleum.
Murkowski Is there something we can do to get the technology in place first?
Orzag Pricing carbon will create a strong incentive for technologies to be developed and diffused throughout the economy.
Murkowski And the impact might be higher in certain areas.
McLean A price signal and investment in R&D both have impact. I think we need to do both.
Sen. Barbara Boxer (D-Calif.) has released an overview of the “global warming substitute amendment” to the Lieberman-Warner Climate Security Act (S. 2191) that will be the subject of debate during the first week of June.Changes from the version of Lieberman-Warner that was passed out of the Committee on Environment and Public Works last year include:
- Title V, Subtitle C: Emergency Off-Ramps. “If the price of carbon allowances reaches a certain price range, there is a mechanism that will automatically release additional emission allowances onto the market to lower the price. The additional allowances are borrowed so that the environmental integrity of the caps over the long term is protected.”
- Title V, Subtitle I: Financial Relief for Consumers. “The bill sets aside a nearly $800 billion tax relief fund through 2050, which will help consumers in need of assistance related to energy costs. The precise details of the relief will be developed by the Finance committee.”
- Title XIV: Deficit Neutrality. “This section auctions allowances and transfers the proceeds to the Treasury to ensure that the bill is deficit-neutral.”
- Voluntary goals of 2006-level emissions by 2020 and 1990 levels by 2030
- Tax incentives for advanced coal and nuclear power
- A “backstop” cap-and-trade program
The IPCC Fourth Assessment Report outlined the need for industrialized nations to achieve reductions of 25-40% below 1990 levels by 2020, targets the Annex I Kyoto signatories recognized in Bali.From E&E News:
On the other side of the climate debate, Sen. George Voinovich (R-Ohio) is taking the lead in writing his own climate change bill that could come up as an alternative to the Lieberman-Warner measure.
Sources on and off Capitol Hill started circulating details of Voinovich’s proposal last week. An executive summary of the Voinovich plan obtained yesterday by E&E Daily shows a plan heavy on tax incentives for new energy technologies such as “clean coal” and nuclear power, with a cap-and-trade program used as a backstop if the low- and zero-carbon energy sources do not meet certain milestones.
The summary said those milestones would be to reduce U.S. emissions to 2006 levels by 2020 and 1990 levels by 2030. Voinovich spokesman Chris Paulitz said yesterday that the summary was “well outdated,” though he did confirm the senator was working on alternatives.
“He’s trying to figure out a way to make the environment cleaner that doesn’t kill our economy,” Paulitz said. “Right now, there’s not a bill in the Senate that does those two things.”
Voinovich is getting help from the Bush administration on his climate proposal, as well as others. “We’re working with everybody who we can humanly think of,” Paulitz said. Of the White House, he added, “It’d be silly to exclude a branch of government that would play a key role.”
- Peter R. Orszag, Director, Congressional Budget Office
- Robert Greenstein, Executive Director, Center on Budget and Policy Priorities
- Henry Derwent CB, President and CEO, International Emissions Trading Association
Yesterday, Rep. Henry A. Waxman (D-CA), Rep. Ed Markey (D-MA) and Rep. Jay Inslee (D-WA) released a document entitled “Principles for Global Warming Legislation,” saying they “are designed to provide a framework for Congress as it produces legislation to establish an economy-wide mandatory program to cut global warming emissions” and that they “will meet the United States’ obligations to curb greenhouse gas emissions and also will provide a pathway to the international cooperation that is necessary to solve the global warming problem.”
The principles are summarized:
The principles include the following elements: strong science-based targets for near-term and long-term emissions reductions; auctioning emissions allowances rather than giving them to polluting industries; investing auction revenues in clean energy technologies; returning auction proceeds to consumers, workers, and communities to offset any economic impacts; and dedicating a portion of auction proceeds to help states, communities, vulnerable developing countries, and ecosystems address harm from the degree of global warming that is now unavoidable.
The specific 14-point elements provide specific language that is more complicated than the above summary. For example:
- The document recognizes that an increase in global temperatures greater than 2°C above pre-industrial levels will bring about “dangerous and irreversible changes to the Earth’s climate” and that the IPCC calls for an industrialized-nation minimum target of 25% below 1990 levels by 2020, but calls for a U.S. target of 100% of 1990 levels.
- The language for scientific lookback provisions would be technically satisfied by Lieberman-Warner’s current provisions (Sec. 7001-7004), which only mandate action by 2020.
- The document does not actually call for full auction of allowances, saying: “If any allocations are given to polluters, they must be provided only to existing facilities for a brief transition period and the quantity must be limited to avoid windfall profits”; no definition of “brief” or “windfall profits” is given
- “Significant” auction revenue should be dedicated to “clean energy and efficiency measures” – “clean energy” is defined as “technologies and practices that are cleaner, cheaper, safer, and faster than conventional technologies.” The document does not distinguish between renewable and non-renewable technologies
- Only clean technology, a priority of Rep. Inslee, is recommended to receive a “significant” portion of auction revenues; however, the document says that auction revenues “sufficient to offset higher energy costs” should go to low- and middle-income households.
The document is written with an eye to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation expected to reach the Senate floor in June. In part, this is because the document is expressly focused on cap-and-trade legislation; questions of broader policy (agriculture, transportation, architecture, urban planning, health) are only touched on. Many of the provisions are written in such a way that the language in Lieberman-Warner satisfies them (such as the 2020 target, lookback provisions, call for complementary policies, and most of the auction proceeds language).
Points of difference include the document’s call for 80% reductions from current levels by 2050 (Lieberman-Warner’s 2050 target is estimated to achieve a 62-66% reduction from current levels) and the emphasis on auction rather than allowance giveaways. Lieberman-Warner allocates a significant percentage of allowances for public purposes, giving them to states, tribal governments, federal agencies, and load-serving entities who would then sell the allowances to emitters to use their value; this document emphasizes instead using auction revenues.
In general, the House document is in line with the Sanders-Lautenberg principles, though Sanders-Lautenberg is stronger on the scientific language. However, it is considerably less aggressive than the progressive 1Sky principles. For example, there is no language even hinting at a coal plant moratorium, which has been called for by Reps. Waxman and Markey (H.R. 5575).
The full document of principles is after the jump.
LETTER on PRINCIPLES for CLIMATE LEGISLATION
The Honorable Nancy Pelosi
U.S. House of Representatives
Washington, DC 20515
Dear Madam Speaker,
We salute your leadership on one of the critical issues of our time: the effort to save the planet from calamitous global warming. You have listened to the scientists and recognized the scope and severity of the threat that global warming poses to our nation’s security, economy, public health, and ecosystems. You have made enacting legislation to address global warming a top priority for Congress for the first time in our history. We stand ready to help develop this legislation and enact it into law.
As part of this effort, we have developed a set of principles to guide Congress as it produces legislation to establish an economy-wide mandatory program to address the threat of global warming. Acting in accordance with these principles is critical to achieving a fair and effective bill that will avoid the most dangerous global warming and assist those harmed by the warming that is unavoidable, while strengthening our economy.
The following are the principles we have developed to guide the creation of comprehensive global warming legislation.
Comprehensive legislation to address global warming must achieve four key goals:
To meet each of these goals, climate change legislation must include the following key elements.
- Reduce emissions to avoid dangerous global warming;
- Transition America to a clean energy economy;
- Recognize and minimize any economic impacts from global warming legislation; and
- Aid communities and ecosystems vulnerable to harm from global warming.
Reduce Emissions to Avoid Dangerous Global WarmingThe United States must do its part to keep global temperatures from rising more than 3.6 degrees Fahrenheit (2 degrees Celsius) above pre-industrial levels. The scientific community warns that above this level, dangerous and irreversible changes to the Earth’s climate are predicted to occur. To meet this goal, the legislation must:
- Cap and cut global warming emissions to science-based levels with short and long-term targets. Total U.S. emissions must be capped by a date certain, decline every year, be reduced to 15% to 20% below current levels in 2020, and fall to 80% below 1990 levels by 2050.
- Review and respond to advancing climate science. The effects of global warming are happening much faster than scientists predicted several years ago, and there may be tipping points at which irreversible effects occur at lower levels of greenhouse gas concentrations than previously predicted. A mechanism for periodic scientific review is necessary, and EPA, and other agencies as appropriate, must adjust the regulatory response if the latest science indicates that more reductions are needed.
- Make emissions targets certain and enforceable. Our strong existing environmental laws depend on enforceable requirements, rigorous monitoring and reporting of emissions, public input and transparent implementation, and government and citizen enforcement. All of these elements must be included in comprehensive global warming legislation. Cost-containment measures must not break the cap on global warming pollution. Any offsets must be real, additional, verifiable, permanent, and enforceable. The percentage of required emissions reductions that may be met with offsets should be strictly limited, and should be increased only to the extent that there is greater certainty that the offsets will not compromise the program’s environmental integrity.
- Require the United States to engage with other nations to reduce emissions through commitments and incentives. The United States must reengage in the international negotiations to establish binding emissions reductions goals under the United Nations Framework Convention on Climate Change. The legislation must encourage developing countries to reduce emissions by assisting such countries to avoid deforestation and to adopt clean energy technologies. This is a cost-effective way for the United States and other developed nations to achieve combined emissions reductions of at least 25% below 1990 levels by 2020, as called for by the Intergovernmental Panel on Climate Change.
Transition America to a Clean Energy Economy
Global warming legislation provides an opportunity to create new jobs, while transforming the way we live and work through renewable energy, green buildings, clean vehicles, and advanced technologies. To realize this opportunity, the legislation must:
- Invest in the best clean energy and efficiency technologies. A significant portion of revenues from auctioning emissions allowances should be invested in clean energy and efficiency measures, targeted to technologies and practices that are cleaner, cheaper, safer, and faster than conventional technologies, as determined through the application of clear standards set by Congress.
- Include and encourage complementary policies. Complementary policies can lower program costs by producing lower-cost emissions reductions from economic sectors and activities that are less sensitive to a price signal. Smart growth measures, green building policies, and electricity sector efficiency policies are important types of complementary policies. The legislation should include federal complementary policies and encourage state and local complementary policies in areas better addressed by states and localities.
- Preserve states’ authorities to protect their citizens. Federal global warming requirements must be a floor, not a ceiling, on states’ ability to protect their citizens’ health and state resources. Throughout our history, states have pioneered policies that the nation has subsequently adopted. Addressing global warming requires state and local efforts, as well as national ones.
Recognize and Minimize Any Economic Impacts from Global Warming LegislationReducing global warming pollution will likely have some manageable costs, which would be far lower than the costs of inaction. To minimize any economic impacts, the legislation must:
- Use public assets for public benefit in a fair and transparent way. Emissions allowances should be auctioned with the revenues going to benefit the public, and any free allocations should produce public benefits. If any allocations are given to polluters, they must be provided only to existing facilities for a brief transition period and the quantity must be limited to avoid windfall profits.
- Return revenues to consumers. Revenues from auctioned allowances should be returned to low- and moderate-income households at a level sufficient to offset higher energy costs.
- Return revenues to workers and communities. Workers and communities most affected by the transition to a clean energy economy should receive a portion of the revenues to ease the transition and build a trained workforce so that all can participate in the new energy economy.
- Protect against global trade disadvantages to U.S. industry. In addition to providing incentives for developing countries to reduce emissions, the legislation should provide for an effective response to any countries that refuse to contribute their fair share to the international effort. These elements will protect energy-intensive U.S. enterprises against competitive disadvantage.
Aid Communities and Ecosystems Vulnerable to Harm from Global WarmingGlobal warming is already harming communities and ecosystems throughout the world, and even with immediate action to reduce emissions and avoid dangerous effects, these impacts will worsen over the coming decades. To ameliorate these harms, the legislation must:
- Assist states, localities and tribes to respond and adapt to the effects of global warming. A portion of auction revenues should be provided to states, localities, and tribes to respond to harm from global warming and adapt their infrastructure to its effects, such as more severe wildfires, intensified droughts, increased water scarcity, sea level rise, floods, hurricanes, melting permafrost, and agricultural and public health impacts.
- Assist developing countries to respond and adapt to the effects of global warming. A portion of auction revenues should be provided to help the developing countries most vulnerable to harm from global warming and defuse the threats to national security and global stability posed by conflicts over water and other natural resources, famines, and mass migrations that could be triggered by global warming. Vulnerable countries include least developed countries, where millions of people are already living on the brink, and small island states, which face massive loss of land.
- Assist wildlife and ecosystems threatened by global warming. A portion of auction revenues should be provided to federal, state, and tribal natural resource protection agencies to manage wildlife and ecosystems to maximize the survival of wildlife populations, imperiled species, and ecosystems, using science-based adaptation strategies.
These principles, if adopted as part of comprehensive climate change legislation, will meet the United States’ obligations to curb greenhouse gas emissions and also will provide a pathway to the international cooperation that is necessary to solve the global warming problem.
At the A&WMA conference yesterday, Sen. Joe Lieberman (I-CT) spoke optimistically about getting the sixty votes necessary to forestall any filibuster against his cap-and-trade bill, the Lieberman-Warner Climate Security Act (S. 2191). According to Darren Samuelson of E&E News, he told attendees that 45 senators are “heavily with us” and 15 more have a “heavy tilt in our direction, if we can do some small things.”
“We can find only 20 we can put in the category of hopeless, that is with regard to this particular bill.”
Because Sen. McCain (R-Ariz.) has criticized Lieberman-Warner’s lack of explicit nuclear subsidies, Sen. Lieberman acknowledged McCain is not an “aye” vote, saying “Just out of respect, I’d have to put him in the middle category. A heavy lean.”Samuelson also reports:
Senate Majority Leader Harry Reid (D-Nev.) has given Lieberman and his allies a green light to take the bill to the Senate floor during the week of June 2-6, the first week back from Congress’ Memorial Day recess, a Reid spokeswoman said today.
New Study Highlighting the National and 50-State Economic Impacts of the Lieberman-Warner Climate Change Bill
A media conference call to discuss the findings of a study jointly commissioned by the National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) that quantifies the potential national and state economic impacts of the Lieberman-Warner climate change bill, S. 2191, the America’s Climate Security Act of 2007.
Conducted by Science Applications International Corporation (SAIC), the independent study examines the implications of the legislation with respect to future energy costs, economic growth, employment, production, household income and the impact on low income earners. The study includes a comprehensive national economic assessment, as well as separate and specific overviews of the impact the legislation would have on all 50 U.S. states.
The results of the study will be outlined during a brief presentation which will be followed by a question and answer session. The full SAIC national and 50 state-specific studies will be posted online at 9:30 am ET, Thursday, March 13, in advance and can be found at either www.accf.org or www.nam.org/climatechangereport.
The call is for credentialed media only.
- The Honorable John Engler, President, National Association of Manufacturers
- Dr. Margo Thorning, Senior Vice President and Chief Economist, American Council for Capital Formation
Dial-In Number: 1-800-857-9772
Contact: For additional information or to request an interview, please contact Erica Fitzsimmons
202-347-7445 – email@example.com
The National Association of Manufacturers is the nation’s largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 11 additional offices across the country.
The American Council for Capital Formation (www.accf.org) is a nonprofit, nonpartisan organization dedicated to the advocacy of tax and environmental policies that encourage saving and investment. The ACCF was founded in 1973 and is supported by the voluntary contributions of corporations, associations, foundations, and individuals.