Sen. Boxer convened the third full Environment and Public Works Committee hearing on Lieberman-Warner (S 2191) this morning.
Some highlights:
Fred Krupp of Environmental Defense strongly praised Lieberman-Warner as having “the right framework to address the challenge of climate change in a way that makes sense for the environment, entrepreneurs, and the economy.” He emphasized the heavy potential costs of delay. Krupp said that early reductions can take place primarily with energy efficiency and terrestrial sequestration. He called for three specific changes to the bill:
- 80% target by 2050
- an “Ocean Trust” of ocean and coastal adaptation funds as proposed by Sen. Whitehouse (D-R.I.)
- increased support for international adaptation
ED opposes amendments to weaken the emissions cap by changing targets or establishing a price cap, and opposes limits on offsets.
Krupp’s written testimony did not mention allocation at all.
Eileen Claussen of the Pew Center on Climate Change also strongly praised Lieberman-Warner. Her written testimony defends the giveaways to the coal industry in the bill:
While the use of a well-designed cap-and-trade program ensures the lowest overall cost, many important sectors of the economy will face real transition costs that can and should be dealt with through the allowance allocation process. Allocation, contrary to the impression some stakeholders may be creating, has no effect on the greenhouse gas reductions mandated by the cap. Given this, we should use the allocation process, in the early years of the program, to address the legitimate transition costs some sectors will face as we move to a low- greenhouse gas economy. . . The best hope, at the moment, lies with carbon capture and sequestration, which most experts believe will take at least a decade to deploy throughout the power sector. While we need not wait until then to begin cost-effective reductions, it would be appropriate to allocate initially a significant amount of allowances to this sector to help with transition. The bill does this and also appropriately uses bonus allowances and a clean coal technology program funded out of auction proceeds to accelerate CCS deployment and speed and smooth the transition. There is is a similar need for transition assistance in other sectors of the economy, most particularly energy-intensive industries that face significant foreign competition. As the need for transition assistance diminishes, the allocation of free allowances should phase out, which the bill does as well.
The Pew report she references calls for a total investment in CCS of 8 to 30 billion dollars, far lower than what is in Lieberman-Warner (about $400 billion explicitly for CCS, with another $100 billion to coal power, plus another $500 billion in research money that could go to coal, nuclear, renewables, and efficiency R&D.)