Hill Heat

The Congressional Budget Office has released its cost estimate of H.R. 2454, the Waxman-Markey American Clean Energy and Security Act, finding that it would reduce budget deficits “about $24 billion over the 2010-2019 period.”

H.R. 2454 would make a number of changes in energy and environmental policies largely aimed at reducing emissions of gases that contribute to global warming. The bill would limit or cap the quantity of certain greenhouse gases (GHGs) emitted from facilities that generate electricity and from other industrial activities over the 2012-2050 period. The Environmental Protection Agency (EPA) would establish two separate regulatory initiatives known as cap-and-trade programs—one covering emissions of most types of GHGs and one covering hydrofluorocarbons (HFCs). EPA would issue allowances to emit those gases under the cap-and-trade programs. Some of those allowances would be auctioned by the federal government, and the remainder would be distributed at no charge. Other major provisions of the legislation would:

• Provide energy tax credits or energy rebates to certain low-income families to offset the impact of higher energy-related prices from the cap-and-trade programs;
• Require certain retail electricity suppliers to satisfy a minimum percentage of their electricity sales with electricity generated by facilities that use qualifying renewable fuels or energy sources;
• Establish a Carbon Storage Research Corporation to support research and development of technologies related to carbon capture and sequestration;
• Increase, by $25 billion, the aggregate amount of loans DOE is authorized to make to automobile manufacturers and component suppliers under the existing Advanced Technology Vehicle Manufacturing Loan Program;
• Establish a Clean Energy Deployment Administration (CEDA) within the Department of Energy (DOE), which would be authorized to provide direct loans, loan guarantees, and letters of credit for clean energy projects;
• Authorize the Department of Transportation (DOT) to provide individuals with vouchers to acquire new vehicles that achieve greater fuel efficiency than the existing qualifying vehicles owned by the individuals; and
• Authorize appropriations for various programs under EPA, DOE, and other agencies.

CBO and the Joint Committee on Taxation (JCT) estimate that over the 2010-2019 period enacting this legislation would:

• Increase federal revenues by about $846 billion; and
• Increase direct spending by about $821 billion.

In total, those changes would reduce budget deficits (or increase future surpluses) by about $24 billion over the 2010-2019 period.

In addition, assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 2454 would increase discretionary spending by about $50 billion over the 2010-2019 period. Most of that funding would stem from spending auction proceeds from various funds established under this legislation.

CBO has determined that the non-tax provisions of H.R. 2454 contain intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). Several of those mandates would require utilities, manufacturers, and other entities to reduce greenhouse gas emissions through cap-and-trade programs and performance standards. CBO estimates that the cost of mandates in the bill would well exceed the annual thresholds established in UMRA for intergovernmental and private-sector mandates (in 2009, $69 million and $139 million respectively, adjusted annually for inflation).

Download the estimate.

From the Wonk Room.

The New York Times reports that “cows at 15 farms across Vermont have had their grain feed adjusted to include more plants” instead of corn and soy, reducing their enteric methane emissions (burps) by 18 percent, without any loss in milk production.

“President Obama may attend world climate talks in Copenhagen this December, marking the first visit to the annual U.N. conference by a sitting U.S. president since George H.W. Bush’s 1992 trip to Rio de Janeiro,” according to House Majority Leader Steny Hoyer (D-MD).

The Washington Post finds that “corporate lobbyists have won billions of dollars of subsidies in the Waxman-Markey green economy legislation, including $500 billion for electric utilities and $12 billion for the auto industry.

E&E News gets more House members to talk about the Waxman-Markey American Clean Energy and Security Act (H.R. 2454). Many are befuddled, though self-described “oil-patch Democrat” John Salazar (D-Colo.) is likely to vote against the bill.

Rep. John Yarmuth (D-Ky.), Ways and Means:

My biggest concern is we have a bill that we can explain to our constituents. I think that’s the hardest thing. There were a lot of members who feel that way, that cap and trade is just a very hard concept to explain. It’s been defined relatively effectively, if not accurately necessarily, by the opponents of it. It makes it a difficult sell job.

Rep. Vic Snyder (D-Ark.):

I suspect I’m like a lot of members, which is, I’ve still got a lot to learn about it. I think there’s a lot of legitimate questions about how it works.

Rep. Alan Grayson (D-Fla.):

I could not say at this moment. I’ve not had a chance to look at it close enough to my own satisfaction. And that’s just a function from the fact we’ve been dealing with an awful lot of things during the last few months.

Rep. John Salazar (D-Colo.), who “would prefer Congress split up energy and global warming into two separate bills, passing the first now and waiting until later on the latter”:

I had a little talk with the speaker. Depending on what comes out in the end, we might be able to support a bill. Right now, as it currently stands, I don’t think I could support it.

Speaking about his brother, Interior Secretary Ken Salazar:

Actually, I think he feels about the same way I do. We want to make sure that us oil-patch Democrats are well positioned, that if we have to take a vote, that we’ll take the right vote. And second of all, I’d hope we’d move the bill in the Senate before it comes to the House, because the Senate I don’t think is going to pass any kind of version like the one we do.

Rep. Jeff Flake (R-Ariz.):

That’s an awful, awful bill.

From the Wonk Room.

Putting the Waxman-Markey climate and energy bill “on a fast-track” for passage, House Speaker Nancy Pelosi “issued an ultimatum to her committee chairmen: move climate change legislation by June 19 or risk losing jurisdiction over the bill.”

“Stephen Ward, chief of staff for Senate Energy Committee Chairman Jeff Bingaman, D-N.M, said Wednesday that lawmakers fear a ratepayer backlash” if carbon pollution is capped, telling “a room full of alternative-energy financiers at the Lazard Capital Markets Alternative Energy Investor Summit” that he foresees “a more modest bill” than Waxman-Markey coming from the Senate.

Researchers have discovered that the Phragmites “super weed” emits toxic chemicals to kill competitors, and “the poison becomes even more toxic” because of global warming’s effect on ultraviolet radiation.

From the Wonk Room.

“Climate change could spark ‘environmental wars’ in the Middle East over already scarce water supplies and dissuade Israel from any pullout from occupied Arab land,” a report from the International Institute for Sustainable Development warns: “In a region already considered the world’s most water scarce, climate models are predicting a hotter, drier and less predictable climate.”

“A recession, the worst GDP drop since the 1950s, is the wrong circumstance, the wrong backdrop to introduce legislation that would revolutionize the energy economy in this country,” said Rep. Artur Davis (D-AL), who has “urged House Democratic leaders and the Obama administration to ditch the cap-and-trade provisions until the economy picks up.”

Two different coalitions of agriculture lobbies have asked House leadership to modify the agricultural and forestry carbon offsets program in Waxman-Markey (H.R. 2454).

By Grist's Kate Sheppard.

The Waxman-Markey climate and energy bill cleared a major hurdle on May 21 when it was approved by the Energy and Commerce Committee. But the American Clean Energy Security Act of 2009 still has a long road to travel before it can be voted on by the full House.

The House parliamentarian has referred the bill to nine committees, though only four have signaled that they intend to review it in the next weeks. Some estimates of how many committees may want a chance to modify the legislation go as high as 11, and it’s certain that the Ways and Means, Agriculture, Science, and Natural Resources committees will all play some role in the development of the bill.

All of this will take place before the bill goes up for a vote in the full House, which could come by the end of June. Here’s a rundown of the committees likely to take a stab at the bill (or a hatchet, perhaps), and any indication we have so far of these panels’ intentions:

From Grist’s Jonathan Hiskes.

Imagine the 435 members of the U.S. House of Representatives standing in a single line, from the most likely to support climate change legislation to the least likely. At the far “green” end, i.e. most inclined to vote for greenhouse gas restrictions, you’d find Seattle Democrat Jim McDermott. At the far “brown” end, Texas Republican/libertarian Ron Paul.

Predictably, most Republicans would stand nearer to Paul’s end. Most Democrats would stand closer to McDermott. In the exact center, according to recent work by two economists, are nine lawmakers. And if the Waxman-Markey climate bill receives a full House vote, any one of them could provide the 218th “yes” – the decisive vote that passes the bill.

Let’s call them the Carbon Nine: Jason Altmire (Pennsylvania), Rick Boucher (Virginia), Artur Davis (Alabama), Baron Hill (Indiana), Charlie Melancon (Louisiana), Earl Pomeroy (North Dakota), Mike Ross (Arkansas), John Tanner (Tennessee), and Gene Taylor (Mississippi).

They’re all Democrats and all men. The nine mostly rural districts they represent are among the country’s most economically reliant on fossil fuels; their districts’ per-capita carbon emissions are, on average, more than three times higher than the national median. (This doesn’t mean people in those districts use more power than average folk, only that the industries located in those districts are carbon-intensive.) In the 2008 presidential election, voters in each of these districts but Davis’ went for Republican John McCain.

The “issues” sections of the Carbon Nine’s official congressional websites tend to call for energy independence and expanded domestic production but rarely mention climate change. Seven of the nine are members of the Blue Dog Coalition, a group of Democrats that emphasizes fiscal conservatism; Hill and Melancon are co-chairs of the group.

Four of the nine sit on the Energy and Commerce Committee, which passed the bill last Thursday, with two (Boucher and Hill) voting for it, and two (Melancon and Ross) voting against. The other Carbon Nine members say they are undecided, voicing concerns that the bill would slow economic recovery and transfer money from Southern and Midwestern states to coastal ones.

“I’d like to have a bill I could vote for,” said Melancon, who represents a southern Louisiana district where oil and natural gas drilling and refining are the chief economic drivers. “I need to be able to go home and say I protected the interests and the jobs of the people in my state and my district. So this can’t be an extreme piece of legislation. It needs to moderate our movement forward.”

Three others seem set on opposing the bill. Altmire recently said, “I think cap-and-trade is bad policy.” Taylor called cap-and-trade “a Ponzi scheme.” Last week, Davis and the rest of Alabama’s congressional delegation sent a letter (PDF) to Energy Committee leaders warning that the bill would “stifle any attempt at reviving our economy and getting back on the path to economic growth, making it nearly impossible for new industries to move into the U.S.”

An E&E News piece on how House Energy and Commerce members are acting as whips for the Waxman-Markey American Clean Energy and Security Act (H.R. 2454) is replete with quotations that tell the story of how negotiations on the bill will proceed.

Committee members

Energy and Commerce Chairman Henry Waxman (D-Calif.):

We’re just savoring the victory and right now I love every provision in that bill. But I don’t love it so much that I wouldn’t want to hear what other people have to say about it, and learn more and examine other alternatives that might do better.

Rep. Ed Markey (D-Mass.):

Congress is a stimulus response institution. And nothing is more stimulating that millions of Americans who want a change with energy. We’re seeing the beginning of it here.

Rep. Diane DeGette (D-Colo.):

We really need to be emissaries to the caucus, talking to them about how we were able to find some good common ground, and how it’s a good bill.

Rep. Bruce Braley (D-Iowa), on EPA biofuels regulations and climate legislation:

Many people tend to confuse the concerns created by both mechanisms. I’m trying to be that broker in between who have legitimate concerns about the indirect land-use implications, especially for my state, as a huge proponent of biofuels, at the same time, recognizing the obligation to the future of this country to move forward with this climate and energy bill.

Rep. G.K. Butterfield (D-N.C.):

I’m still learning the legislation. There’s so much to comprehend. And the manager’s amendment just dropped this week. There’s a lot of details in there we don’t fully understand. Hopefully, I can be a representative of leadership and try to persuade members to vote for it. That’s my duty as a whip.

Rep. Mike Doyle (D-Pa.):

I’ve done my job as a member of the committee. I’m glad to answer any questions members have about what the Energy and Commerce Committee has done. Beyond that, I’m going to be a spectator like everyone else, and we’ll see what happens after all the committees do their work and what the bill looks like and we’ll go from there.

Agriculture Committee

House Agriculture Chairman Collin Peterson (D-Minn.):

If they don’t want to change it, then they’ll have to find the votes some other place. In my district, a ‘no’ vote would be a good vote.

Rep. Earl Pomeroy (D-N.D.):

I don’t think [Peterson] is bluffing. He has got the support he says he has.

Rep. Gene Taylor (D-Miss.):

I think of the whole cap-and-trade idea as a Ponzi scheme. I don’t like the idea that one factory is cleaner than it has to be so that another a factory is dirtier than it should be, because historically that factory that’s dirtier than it should be ends up in the South. ... If the vote was today, I’d vote ‘no.’

Taylor, on having breakfast with Rep. Mike Doyle (D-Pa.):

He was explaining how he’d become a convert. I’ll just leave it at that. He did not try to twist my arm or influence my vote in any way.

Other Democrats

House Democratic Caucus Committee Chairman John Larson (D-Conn.):

You need the votes of the entire caucus. But I think the willingness for everyone to work and understand the fragility of this is helpful, and I think we’ll get a bill. We’ve got to bring everybody together, and there’s nobody better than that than Nancy Pelosi.

Rep. George Miller (D-Calif.), chair of the House Education and Labor Committee:

That’s the process we go through on every bill. The speaker insists you constantly widen the circle and enlarge it so you take in these interests, so when the bill is finished, people will speak up, organizations will speak up.

Rep. Peter DeFazio (D-Ore.):

I don’t care what restrictions we put on it, we do not want to enable Wall Street hedge funds, derivative traders and others to create another bubble and take control of our carbon markets. Cap? Fine. Regulate? Great. Trade? No.

Republicans

House Minority Whip Eric Cantor (R-Va.):

As this bill is now out there in the public domain, I think people will understand the extraordinary cost that this will impose to business and working families. And at the end of the day, that will be what will kill this bill.

Rep. Roy Blunt (R-Mo.):

I actually think it may have been a mistake for the Energy and Commerce Committee to mark this bill up and then send its members home because a lot of them have taken votes that are not going to be easy votes to explain in their districts. And their experience will work against getting people who aren’t on the committee to want to go down the same path.

At 8:35 pm, the House Committee on Energy and Commerce approved the American Clean Energy and Security Act (H.R. 2454), co-sponsored by chair Henry Waxman (D-Calif.) and environmental subcommittee chair Ed Markey (D-Mass.), by a vote of 33 to 25. Democrats Mike Ross (D-Ark.), Jim Matheson (D-Utah), Charlie Melancon (D-La.) and John Barrow (D-Ga.) voted no. Rep. Mary Bono Mack (R-Calif.) was the only Republican to cross the aisle in support of the bill. Rep. Nathan Deal (R-Ga.) failed to vote.

The Wonk Room’s guest blogger is Daniel J. Weiss, a Senior Fellow and Director of Climate Strategy at the Center for American Progress Action Fund.

The second day of markup on the Waxman/Markey American Clean Energy and Security Act (H.R. 2454) saw a series of amendments from opponents designed to weaken the green economy bill fail in a series of votes. The debate on amendments will continue today and the sessions appear on track to get the bill voted out of committee before this weekend. As the committee discusses the landmark legislation, the Center for American Progress released an analysis of new numbers from the Union of Concerned Scientists showing that households and businesses will save money on their electricity and natural gas bills if Congress passes a Renewable Energy Standard, currently included in ACES.

The renewable energy standard (RES), a key part of the Waxman/Markey bill, requires that 15% of electricity comes from wind, sun, or other renewable sources. In yesterday’s session, bill opponents continued to cite a variety of debunked numbers on increased costs to consumers, but this analysis shows that Americans will save money with the RES included in the bill. States across the country have already seen similar savings as they have implemented RES at the state level. A review by CAP found that half the states have amended their RES after implementation to make it stronger, suggesting its been a successful policy in the states.

Back in the committee, Republican opponents read from a script described by Politico as making “counterintuitive” arguments. Their new approach was based on a strategy memo urging opponents to attack the responsible business leaders who support clean energy legislation. The memo accuses businesses of being “guilty of manipulating national climate policy to increase profits on the backs of consumers.” The tone-deaf message of the memo won’t change the fact that businesses see ACES as a chance to create jobs and begin to chart a course out of the current recession. And the script urged:

The bottom line message is this: Democrats are protecting big business; Republicans are protecting consumers.

This ignores the fact that Republicans opposed every effort in 2008 to lower gasoline prices and rein in oil companies.

Amendments that passed yesterday included a provision introduced by Reps. Dingell and Inslee for a Clean Energy Deployment Administration within the Energy Department. This “green bank” would serve to promote clean energy projects in the U.S. through affordable financing for clean energy technologies. A similar amendment from Rep. Eshoo for a Clean Technology grant program also passed. Another major amendment passed was Rep. Betty Sutton’s (D-MI) “cash for clunkers” automotive upgrade program.