Hill Heat

From the Wonk Room.

As the 110th Congress comes to a close, two of the legislators in charge of climate legislation in the House of Representatives yesterday released a draft climate plan. Rep. John Dingell (D-MI), the powerful chair of the House Energy and Commerce Committee, and Rep. Rick Boucher (D-VA), chair of the Energy and Air Quality subcommittee, have primary jurisdiction in the House for legislation that puts mandatory limits on carbon emissions. Although such legislation has been a top priority for Nancy Pelosi (D-CA) since she became Speaker of the House in January 2007, Dingell and Boucher declared they would not be rushed, instead working on the 2007 energy bill, holding several hearings and releasing four white papers from October to May of this year. Dingell’s district is in the heart of the U.S. auto industry; Boucher represents Virginia’s coal country. Below is an analysis of some of the key issues raised in their 460-page draft legislation, an ambitious effort by the two congressmen.

EMISSIONS TARGETS. Dingell and Boucher call for emissions reductions of 80 percent from 2005 levels by 2050, in line with the minimum of scientific recommendations, but with reductions of only six percent below 2005 levels by 2020. Punting any significant reductions until after 2020 means that the Dingell-Boucher plan falls grossly short of what is needed to forestall catastrophe:

In contrast, Europe is maintaining its commitment to unilateral reductions of 20 percent below 1990 levels by 2020.

REGULATORY STRUCTURE. In their letter to other members, Dingell and Boucher criticize the Supreme Court’s Massachusetts v. EPA decision that the EPA must regulate greenhouse gases, saying, “We believe that elected and accountable representatives in the Congress, not the Executive Branch, should properly design that regulatory program.” Their legislation would overturn the Supreme Court ruling by removing greenhouse gases from the Clean Air Act’s National Ambient Air Quality Standards regulations.

The draft provides a broad range of options for dealing with vehicle emissions standards, ranging from preempting the right of California and other states to provide additional protection from automotive pollution to allowing the EPA and the states to implement such protections. They also signal that they see state-level regulation of emissions as an economic threat, saying their actions “could be disruptive to interstate commerce and counterproductive to the goal of limiting national greenhouse gas emissions.” Their draft legislation would outlaw any state or regional cap and trade program.

MONEY. The Center for American Progress strongly supports the “polluter pays” principle for cap and trade programs to reduce global warming. The cost of pollution allowances should not be shifted to the taxpayer. Giving free permits to polluters would be a global warming bailout. The polluting industries are lobbying heavily to receive most if not all permits for free, particularly in initial years of the program. The European cap-and-trade system originally gave away permits, resulting in massive windfall profits for polluters. They are moving to a full auction of permits, like the new Regional Greenhouse Gas Initiative cap-and-trade program that covers northeastern states.

The Dingell-Boucher draft does not take a position on how permits should be allocated initially, instead detailing four scenarios, three of which involve massive giveaways to covered industries. In every scenario, Dingell-Boucher would protect low-income consumers from increases in energy prices through tax breaks and rebates, and invest heavily in new technology deployment (e.g., renewables, advanced coal, advanced vehicles). Although their allocation scenarios are risible in detail, they do a good job of covering the competing priorities in moving to a low-carbon economy:

1. Protect low-income consumers from energy costs
2. Minimize compliance costs for covered polluters
3. Invest in technology development and deployment
4. Invest in complementary programs in efficiency and clean energy
5. Support international efforts and adaptation
6. Give rebates to middle- and upper-income consumers

Dingell and Boucher believe that low-income families must be protected, that industry should receive pollution cost protection and new technology support, and that all else is up for debate. Nearly two-thirds of their Democratic colleagues indicated last week a very different set of priorities, that focuses not on protecting polluters but on respecting scientific urgency, delivering economic equity, and capturing the energy opportunity.