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Earlier this month, the U.S. Congress returned to the nation’s capital from its summer district work period. While the national debate continues to focus on health care reform, Senator Barbara Boxer (D-CA) and Senator John Kerry (D-MA) are planning to introduce climate change legislation later this month. The Senate bill will be debated first in the Environment and Public Works Committee, chaired by Senator Boxer. The bill is expected to be similar to legislation written by Representatives Henry Waxman (D-CA) and Ed Markey (D-MA), which passed the U.S. House of Representatives in June.
We were pleased the House bill included funding to promote the development and deployment of carbon capture and storage technologies. At the same time, we sought changes in the bill that would provide greater protection for consumers against the possibility of dramatic increases in electricity prices, especially in certain regions of the country. Under the bill, electric utilities that use coal and natural gas will have to buy “allowances” to comply with the nation-wide cap on greenhouse gas emissions. The number of allowances they must purchase varies over time. The cost of purchasing these allowances will be passed on to consumers. Because it is impossible for anyone to predict how much these allowances will cost in future years, we sought to include a limit on the price of allowances. This limit would provide insurance in case allowance prices turn out to be higher than expected. Unfortunately those consumer protection changes were not included in the House-passed bill. (Check out what we mean by "allowances" in the sidebar.)
That said, America’s Power Army – along with our parent organization, the American Coalition for Clean Coal Electricity (ACCCE) -- is committed to supporting the enactment of legislation that reduces greenhouse gas emissions, protects consumers, preserves fuel diversity to promote greater energy independence; and encourages the development and deployment of advanced technologies for using coal.
The Senate will have to resolve many difficult issues before it can pass a climate change bill. Right now, much of the attention in the Senate is on the health care debate, so it is not certain when the full Senate will take up a climate bill. As many as six Senate committees may have a hand in crafting a climate change bill before the bill makes its way to the Senate floor. In particular, the bill will need to address difficult regional concerns in order to pass the Senate. These concerns include maintaining affordable electricity rates and protecting jobs. Recently, Majority Leader Harry Reid (D-NV) said that action on a climate bill may have to wait until next year.
While we were not successful including consumer cost protection guarantees in the House-passed version of the bill, we are now working with key Senators to seek their inclusion in any bill the Senate passes.
Recently, a group of eight influential Senators -- Senators Tom Carper (D-DE), Amy Klobuchar (D-MN), Robert Byrd (D-WV), Max Baucus (D-MT), Mark Warner (D-VA), Joe Lieberman (I-CT), Arlen Specter (D-PA), and Bob Casey (D-PA) -- sent a list of suggestions to Senator Boxer that would encourage the deployment of carbon capture and storage technologies. These Senators understand that technological advancement is essential to address climate change. We will work with these and other Senators to ensure that any climate change bill includes provisions to promote carbon capture and storage technologies.
Senator Jeff Bingaman (D-NM), chair of the Energy and Natural Resources Committee, has begun hearings on the economic implications of climate change legislation. Senator Bingaman has long been an advocate for the same provisions that we support – a limit on the price of allowances -- to prevent energy prices from unexpectedly skyrocketing under a cap-and-trade bill. Other members of this important committee – including Senators Evan Bayh (D-IN), Byron Dorgan (D-ND), Mary Landrieu (D-LA), and Debbie Stabenow (D-MI) – also have raised concerns about the energy price and job impacts of the House-passed bill. (Check out what we mean by cap-and-trade in the sidebar.)
As the debate over climate change legislation continues to unfold in the Senate, please be on the lookout for updates from America’s Power Army. You can also share your thoughts and suggestions on this issue by clicking on our web site www.AmericasPowerArmy.org.
Sincerely,
Suzanne Hammelman
On behalf of America's Power Army
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What is "cap and trade"
or "emissions trading" ?
“Cap-and-trade” is an approach for reducing pollution in the cheapest way possible. Congress created the first nationwide cap-and-trade program in 1990. The government sets a limit – or a cap – on the amount of a pollutant that can be emitted and issues “allowances” that are equal in number to the size of the cap. Companies might be issued some free allowances or they might have to purchase allowances. To demonstrate that they are in compliance with the cap each year, companies are required to turn in allowances equal in number to their emissions. The total number of allowances can never exceed the cap. Companies that can reduce their emissions cheaply can sell allowances they don’t need to other companies whose compliance costs would be much higher. This transfer of allowances is referred to as a “trade,” which lowers the total cost of the cap-and-trade program. There are currently active trading markets in the U.S. for sulfur dioxide and nitrogen oxide allowances. These allowances are bought, sold, and traded just like other commodities.
ACCCE and the America’s Power Army recognize that a mandatory cap-and-trade program is one option for reducing greenhouse gas emissions, as long as certain principles are met. These principles include protection of consumers from unaffordable increases in energy prices and continued reliance on domestic resources such as clean coal.
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