Hill Heat

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.

By SolveClimate’s David Sassoon.

America’s future climate law began working its way through Congress this week, rewritten with new details and changes that were negotiated to give the coal industry generous incentives and the regulatory certainty to compete for a place in the nation’s energy future.

Here’s how Rep. Rick Boucher of Virginia, a lead negotiator for coal state Democrats on the House Energy and Commerce Committee, described the deal they worked out:

I’ve been working extensively to fashion a controlled program that Congress can adopt which will preserve coal jobs, create the opportunity for increasing coal production and keep electricity rates in regions like Southwest Virginia affordable. The compromise that I have reached with Chairman Waxman achieves those goals.

Boucher and fellow coal state Democrats cut those deals with the bill’s authors, Reps. Henry Waxman and Ed Markey, with President Obama – a “clean coal” supporter – giving them a free hand to arrive at the formula that would secure the votes needed for passage.

Although the president called for a polluter-pays 100% auction of carbon allowances when he asked Congress for a climate law, the now 932-page American Clean Energy and Security Act of 2009 does the precise opposite: It contains a formula that gives most of the allowances to polluters for free – with about a third of them going to the coal-dominated power industry at no cost.

The free allocations were one major reason that Greenpeace withdrew support for the bill within hours of its introduction, but most of those in the climate community who have weighed in so far have been willing to swallow compromises that would have been unthinkable in January. Al Gore’s support for the bill remains undiminished. Paul Krugman at The New York Times summed up the prevailing attitude best:

The legislation now on the table isn’t the bill we’d ideally want, but it’s the bill we can get — and it’s vastly better than no bill at all.

As climate actors start wading further into the details of the bill’s provisions, however, they may find themselves hard pressed to justify passive acquiescence while enduring the certain further weakening of the bill on the Senate floor.

Ground zero of the contention centers around coal, an embattled industry which emerged from the negotiations with a surprisingly good deal. The bill contains performance standards for new coal plants that are weaker than those in the original Waxman-Markey discussion draft, funnels billions in funds and incentives to the development of “clean coal,” and strips EPA of authority to proceed with development of regulations for smokestack CO2 produced by the industry.

Further, although the bill imposes a gradual economy-wide emissions cap, the penalty for non-compliance or failure to achieve target reductions would amount to no more than a slap on the wrist, given the low price permits are expected to fetch on the market for some time.

Mainstream environmental groups, however, are focused on what they would get in exchange — the holy grail of their climate campaign — the establishment of an economy-wide cap-and-trade system whose efficacy they believe can be increased over time. The bill also legislates valuable and groundbreaking support for clean energy, energy efficiency and green jobs, using federal law to erect economic pillars vital for eventually transitioning to a clean energy economy.

They seem satisfied even though the new bill also reduced the proposed national standard on renewable energy from 25% to 20%, compared to the first draft, diminishing its potential competitive pressure on coal.

All sides are now wading through the details of the massive bill, spinning messages and planning strategies for the political battle that is likely to continue for the duration of the year. It is unlikely that the parameters of coal’s good deal will substantially change during this week’s committee mark-up, but in the coming months, the future of coal will be a major topic of concern.

The continued growth and survival of coal brings three strikes against the bill in every climate campaigners handbook: It’s the source of the lion’s share of global CO2 emissions, it creates a weak negotiating position when across the table from China, and it fails to show the kind of leadership the world will want to see from the U.S. in Copenhagen.

Weakened Standards and Large Bonuses

The discussion draft of the Waxman-Markey bill contained performance standards for new coal plants that had some real bite. For starters, the draft stipulated that after January 1, 2015, no coal plants that emitted more than 1,100 pounds of CO2 per megawatt-hour would be permitted for construction. That’s a natural gas standard of performance, something that no coal plant can currently do, so it looked as if after 2015, no coal plants could be built unless they could capture and store their emissions. But the current bill has relaxed the standard in both definition and start date (see page 91).

Utilities may build coal plants permitted between now and 2020, as long as by 2025, these plants “achieve an emission limit that is a 50 percent reduction in emissions of the carbon dioxide produced by the unit.” The language stipulating specific rate of emissions per megawatt-hour has been removed.

At the heart of the standard is the assumption that carbon capture and sequestration technology will be available for commercial deployment so that industry can comply. The bill is silent on what happens if CCS technology is not ready or proves unworkable.

It is possible that these new coal plants would be permitted to continue operations through a relaxation of the legal standard, since EPA even now cannot enforce a technology standard that cannot be met. Companies in the UK are already negotiating for an opt-out clause there if CCS is not ready in time.

Following weeks of intense negotiations with industry-friendly Democrats on the House Energy and Commerce Committee, chair Henry Waxman (D-Calif.) and energy and environment subcommittee chair Edward Markey (D-Mass.) have released the complete text of their comprehensive energy and climate legislation. The American Clean Energy and Security Act (H.R. 2454) now runs 927 pages.

Download the American Clean Energy and Security Act.

From the Wonk Room.

Sen. Sheldon Whitehouse (D-R.I.), in a Senate hearing on the EPA budget Tuesday morning, decried the extraordinary amount of spending by corporate global warming polluters to lobby Congress. Reading from a report on new lobbying disclosures, Whitehouse noted that carbon polluters such as electric utilities and oil and gas companies have spent nearly $80 million on lobbying just in the first quarter of 2009. Whitehouse concludes:

So if we wonder why the Senate is the last place in America that still doesn’t get it – that climate change is a real problem for people and that carbon pollution is something that people should pay for when they emit it, big utilities, big industry – gee, connect the dots.

Watch it:

“For as long as there’s been pollution,” Sen. Whitehouse explained, “there has been a constant battle with polluters who don’t want to pay the costs of their pollution, either preventing or cleaning it up”:

They’d like to just dump it and have it be somebody else’s problem. There’s absolutely nothing new about that. Polluters don’t want to pay. What’s new is our understanding of what the costs are of carbon pollution. Economic costs, environmental costs, wildlife and habitat costs, and as we’ve recently learned, very significant national security costs.

The E&E News story Whitehouse entered in the Congressional Record explains how carbon-industry lobbyists are vastly outspending environmental groups and clean energy companies:

From the Wonk Room.

The Hill reports that “House Energy and Commerce Committee leaders on Tuesday night announced a new agreement on a contentious climate change bill, assuaging the concerns of enough committee Democrats to get the bill out of committee.”

Former President Jimmy Carter “who presided over the oil crisis of 1979, told Congress Tuesday that America’s energy challenges are deeper and more urgent today than when he was president, but the solutions are the same.”

The Southern Alliance for Clean Energy has found that a “proposed energy efficiency goal would save Georgia $6.3 billion in costs and create 9,000 jobs over the next decade.”

From the Wonk Room.

The House Natural Resources Committee is holding a field hearing today “to discuss the responsible expansion of solar energy in California and across the nation” at the University of California, Riverside Palm Desert Graduate Center.

The New York Times discusses the Intervale Green complex, a “new, green, low-income housing development” by the Women’s Housing and Economic Development Corporation with 128 units, “a large, glass-windowed lobby, two green roofs and a sculpture-filled courtyard.”

Rep. John Shimkus (R-IL), Heritage Foundation, Americans for Tax Reform, and local op-eds in North Carolina and Louisiana repeated the “just wrong” lie that an MIT study found cap and trade is a $3100 tax.

From the Wonk Room.

According to Rep. Mike Doyle (D-PA), corporations would be subsidized for most of their global warming pollution for more than ten years, under terms being negotiated for the climate and energy bill being drafted by the House Energy and Commerce Committee. If this is true, the Waxman-Markey American Clean Energy and Security Act would violate a pledge by President Obama to fund tax cuts for working families through carbon market revenues and runs the risk of windfall profits for covered emitters. Doyle said most of the pollution permits created for a cap-and-trade system to reduce greenhouse gases would be given away:

While the exact numbers were still in flux, Doyle said, “The majority of the permits will be allocated (given away) at first.”

Asked what percentage would be sold to utilities, manufacturers and other firms, Doyle responded, “Not a big number initially…in the first 10 to 15 years.”

The Center for American Progress “supports auctioning 100 percent of the greenhouse gas emission permits from day one under a cap-and-trade program” and using the auction revenues to assist workers and industries to make the transition to a low-carbon economy:

This would include supporting new investments in green technology and energy efficiency; sheltering American households from any economic dislocations due to shifting energy prices; alleviating higher costs for energy-intensive industries; adapting to some of the effects of global warming that we are already experiencing globally; and creating good, “green jobs” and more vibrant, healthier communities in this process. A 100 percent auction will ensure that large polluters, and not the hardworking Americans least able to foot the bill, are financing the investments necessary to carry out these vital public projects.

Without any climate policy, the public is subsidizing all the present and future costs of climate change. President Obama has previously expressed his willingness to be flexible on the pollution subsidies in order to establish a cap-and-trade system. As President Obama explained to business leaders in March, he is flexible on his campaign pledge for full auction of pollution permits:

Now, the experience of a cap-and-trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for. The flip side is, you’re right, if it’s so onerous that people can’t meet it, then it defeats the purpose – and politically we can’t get it done anyway.