Hill Heat

Yesterday, Rep. Henry A. Waxman (D-CA), Rep. Ed Markey (D-MA) and Rep. Jay Inslee (D-WA) released a document entitled “Principles for Global Warming Legislation,” saying they “are designed to provide a framework for Congress as it produces legislation to establish an economy-wide mandatory program to cut global warming emissions” and that they “will meet the United States’ obligations to curb greenhouse gas emissions and also will provide a pathway to the international cooperation that is necessary to solve the global warming problem.”

The principles are summarized:

The principles include the following elements: strong science-based targets for near-term and long-term emissions reductions; auctioning emissions allowances rather than giving them to polluting industries; investing auction revenues in clean energy technologies; returning auction proceeds to consumers, workers, and communities to offset any economic impacts; and dedicating a portion of auction proceeds to help states, communities, vulnerable developing countries, and ecosystems address harm from the degree of global warming that is now unavoidable.

The specific 14-point elements provide specific language that is more complicated than the above summary. For example:

• The document recognizes that an increase in global temperatures greater than 2°C above pre-industrial levels will bring about “dangerous and irreversible changes to the Earth’s climate” and that the IPCC calls for an industrialized-nation minimum target of 25% below 1990 levels by 2020, but calls for a U.S. target of 100% of 1990 levels.
• The language for scientific lookback provisions would be technically satisfied by Lieberman-Warner’s current provisions (Sec. 7001-7004), which only mandate action by 2020.
• The document does not actually call for full auction of allowances, saying: “If any allocations are given to polluters, they must be provided only to existing facilities for a brief transition period and the quantity must be limited to avoid windfall profits”; no definition of “brief” or “windfall profits” is given
• “Significant” auction revenue should be dedicated to “clean energy and efficiency measures” – “clean energy” is defined as “technologies and practices that are cleaner, cheaper, safer, and faster than conventional technologies.” The document does not distinguish between renewable and non-renewable technologies
• Only clean technology, a priority of Rep. Inslee, is recommended to receive a “significant” portion of auction revenues; however, the document says that auction revenues “sufficient to offset higher energy costs” should go to low- and middle-income households.

The document is written with an eye to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation expected to reach the Senate floor in June. In part, this is because the document is expressly focused on cap-and-trade legislation; questions of broader policy (agriculture, transportation, architecture, urban planning, health) are only touched on. Many of the provisions are written in such a way that the language in Lieberman-Warner satisfies them (such as the 2020 target, lookback provisions, call for complementary policies, and most of the auction proceeds language).

Points of difference include the document’s call for 80% reductions from current levels by 2050 (Lieberman-Warner’s 2050 target is estimated to achieve a 62-66% reduction from current levels) and the emphasis on auction rather than allowance giveaways. Lieberman-Warner allocates a significant percentage of allowances for public purposes, giving them to states, tribal governments, federal agencies, and load-serving entities who would then sell the allowances to emitters to use their value; this document emphasizes instead using auction revenues.

In general, the House document is in line with the Sanders-Lautenberg principles, though Sanders-Lautenberg is stronger on the scientific language. However, it is considerably less aggressive than the progressive 1Sky principles. For example, there is no language even hinting at a coal plant moratorium, which has been called for by Reps. Waxman and Markey (H.R. 5575).

The full document of principles is after the jump.

On Thursday, the Congressional Budget Office issued its cost estimate of the Lieberman-Warner Climate Security Act, finding it would create a $1.2 trillion cap-and-trade market through 2018 in carbon allowances, $946 billion of which in the form of corporate giveaways that would become windfall profits. Because of the failure of the legislation to account for the effect of the system on receipts from income and payroll taxes, the CBO estimated that the bill would generate a $15 billion budget deficit over the first ten years, with greater than $5 billion in deficits each decade following.

Because ownership of the allowances is not limited to emitters, the CBO interpreted the emissions allowances as the equivalent of a revenue-generating tax. Allowances given away are interpreted as “direct spending” – that is, revenues lost (“CBO considers the distribution of such allowances at no charge to be functionally equivalent to distributing cash”). Assuming enactment of the bill at the end of 2008,

CBO estimates that implementing this legislation would result in additional revenues, net of income and payroll tax offsets, of $304 billion over the 2009-2013 period, and about $1.19 trillion over the 2009-2018 period. We estimate that direct spending would increase by $281 billion and about $1.21 trillion over the same periods, respectively. Those changes in revenues and direct spending would stem almost entirely from the process of auctioning and freely distributing allowances under the cap-and-trade programs established under this legislation.

Over 78% of Market’s Value Dedicated to Polluter Giveaways Of the $1.2 trillion market, $260 billion is auctioned and $946 billion freely given to covered emitters. Because the CBO estimates that most of the cost of emissions reduction “would ultimately be passed on to consumers in the form of higher prices for energy and energy-intensive goods and services,” the $946 billion in emitter giveaways would become windfall profits. The effect on consumers is the same whether the allowances are given away or auctioned.

Banking’s Effect – Faster Reductions Up Front, Higher Allowance Value Furthermore, the CBO estimates that the unrestricted ability to “bank” emissions allowances (allowances distributed in one year may be redeemed at any time in the future) would encourage companies to attempt to “undertake significantly more mitigation than necessary to meet their annual emission caps” in early years because of the initially low allowance price and an expected rate of return “significantly greater than CBO’s estimate of the expected long-run inflation-adjusted rate of return to capital in the U.S. nonfinancial corporate sector,” raising the price by about 27 percent higher than a no-banking policy over ten years.

Lion’s Share of Auction Revenues Go to Privately Controlled R&D The CBO estimates that in the first decade $123 billion, 47% of auction revenues, would go to the Climate Change Credit Corporation to allocate as it sees fit within its mission of funding industrial research and development – the corporation is set up as a private entity with a board selected by Presidential appointees.

At the A&WMA conference yesterday, Sen. Joe Lieberman (I-CT) spoke optimistically about getting the sixty votes necessary to forestall any filibuster against his cap-and-trade bill, the Lieberman-Warner Climate Security Act (S. 2191). According to Darren Samuelson of E&E News, he told attendees that 45 senators are “heavily with us” and 15 more have a “heavy tilt in our direction, if we can do some small things.”

“We can find only 20 we can put in the category of hopeless, that is with regard to this particular bill.”

Because Sen. McCain (R-Ariz.) has criticized Lieberman-Warner’s lack of explicit nuclear subsidies, Sen. Lieberman acknowledged McCain is not an “aye” vote, saying “Just out of respect, I’d have to put him in the middle category. A heavy lean.”

Samuelson also reports:

Senate Majority Leader Harry Reid (D-Nev.) has given Lieberman and his allies a green light to take the bill to the Senate floor during the week of June 2-6, the first week back from Congress’ Memorial Day recess, a Reid spokeswoman said today.

Real progress on climate change issues requires new, manageable policy. It’s time to get to work. The Climate Policy Puzzle: Putting the Pieces Together is 2008’s must attend conference for those looking for straight talk on U.S. policy developments.

Join A&WMA, Senator Joe Lieberman (I-CT), Governor Jon M. Huntsman, Jr. (R-UT), and ranking representatives from the environmental community in Arlington, VA April 2-3, 2008 for a climate change event that breaks new ground.

Get down to business on positions, perspectives and predictions with issue-leaders from:

• Natural Resources Defense Council (USCAP)
• 3M Corp.
• Duke University
• Environmental Defense Fund (USCAP)
• Hogan & Hartson
• U.S Environmental Protection Agency
• Clean Air Institute Asia
• UK Department of Environment, Food & Rural Affairs
• The U.S. Department of Energy
• The Electric Power Research Institute
• The United Mine Workers of America
• U.S. DOE’s National Energy Technology Lab
• The American Petroleum Institute
• The World Resources Institute (USCAP)
• The Center for Clean Air Policy
• Analysis Group, Inc.
• Edison Electric Institute
• DTE Energy
• Heinz Center for Science, Economics and the Environment
• ES&P LLC
• Environmental Council of the States
• National Association of Clean Air Agencies (NACAA)
• Utah Department of Environmental Quality
• RTP Environmental Associates, Inc.
• Louisville Metro Air Pollution Control District
• Regional Greenhouse Gas Initiative
• Illinois Environmental Protection Agency
• Arizona Public Service
• The LEVON Group
• The Energy and Resources Institute, North America (TERI NA)
• Pew Center for Global Climate Change (USCAP)

Marriott Crystal City Gateway
1700 Jefferson Davis Highway
Arlington, VA 22202
Phone: 703-920-3230
Fax: 703-271-5212

To register, download the registration form and return it with your payment to:

Registrar, Air & Waste Management Association
420 Fort Duquesne Blvd., 3rd Floor
Pittsburgh, PA 15222-1435 USA
Fax: 412-232-3450
Phone: 412-232-3444

Important Note! The advance registration deadline was extended from March 10 to March 17.

Refund Policy:

If written notice of cancellation is received on or before March 19, 2008, payment will be refunded, less a $75 cancellation fee. (Cancellation fees apply regardless of payment method). Substitutions may be made at any time; payment for any difference is due at the time of substitution. This refund policy applies to all occurrences, including weather-related events and other natural disasters. In the unlikely occurrence of event cancellation, the Association is not liable for any expenses incurred by the registrant other than the full refund of registration fee(s) paid.

Continuing Education Credit Opportunities:

Conference attendees may be eligible for continuing education credit. For more information, please contact Autumn Secrest, Programs Coordinator, at 412-232-3444 ext. 6031, or [email protected].

Conference Committee:

Conference Co-chairs:

• William J. Palermo, PE, Principal, RTP Environmental Associates, Inc.
• John S. Seitz, Partner, ES&P, LLC

Organizing Committee Members:

• A. Gwen Eklund, Director, Power, TRC
• Peter F. Hess, PE, DEE, QEP
• Miriam Lev-On, Executive Director, The LEVON Group, LLC
• C. V. Mathai, Ph.D., QEP, Manager for Environmental Policy, Arizona Public Service
• Jim Pfeiffer, Environmental Advisor, Air Quality, BP Exploration (Alaska), Inc.
• Jayne M. Somers, Program Manager, U.S. EPA Climate Change Division
• Richard W. Sprott, Executive Director, Utah Department of Environmental Quality
• C. Flint Webb, Project Manager, SAIC

02/04/2008 at 07:00AM

A media conference call to discuss the findings of a study jointly commissioned by the National Association of Manufacturers (NAM) and the American Council for Capital Formation (ACCF) that quantifies the potential national and state economic impacts of the Lieberman-Warner climate change bill, S. 2191, the America’s Climate Security Act of 2007.

Conducted by Science Applications International Corporation (SAIC), the independent study examines the implications of the legislation with respect to future energy costs, economic growth, employment, production, household income and the impact on low income earners. The study includes a comprehensive national economic assessment, as well as separate and specific overviews of the impact the legislation would have on all 50 U.S. states.

The results of the study will be outlined during a brief presentation which will be followed by a question and answer session. The full SAIC national and 50 state-specific studies will be posted online at 9:30 am ET, Thursday, March 13, in advance and can be found at either www.accf.org or www.nam.org/climatechangereport.

The call is for credentialed media only.

• The Honorable John Engler, President, National Association of Manufacturers
• Dr. Margo Thorning, Senior Vice President and Chief Economist, American Council for Capital Formation

12/03/2008 at 10:00AM

U.S. Senator Barbara Boxer (D-CA), Chairman of the Senate Environment and Public Works Committee, will be joined by the heads of America’s leading environmental organizations to discuss the need for action to address the challenge of global warming.

Participants

• Sen. Barbara Boxer (D-CA), Chairman, Environment and Public Works Committee
• Frances Beinecke, President, Natural Resources Defense Council
• Carl Pope, Executive Director, Sierra Club
• Gene Karpinski, President, League of Conservation Voters
• Kevin Knobloch, President, Union of Concerned Scientists

Also participating will be representatives of Environment America, Environmental Defense, Center for International Law, Clean Water Action, National Wildlife Federation, Ocean Conservancy, Pew Environment Group, Physicians for Social Responsibility, and The Wilderness Society.

12/03/2008 at 09:30AM

E&E News’s Darren Samuelson reports in a pair of stories that the House of Representatives is moving forward to introduce companion legislation to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation wending its way through the Senate. Rep. John Dingell (D-Mich.), whose Energy and Commerce Committee has jurisdiction, told steel industry officials last week that he plans “to release one or more draft global warming bills for comment by mid-April.”

Samuelson also reported that Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming and a strong ally of Speaker Pelosi, has been meeting with “alternative energy producers, labor groups, financial market officials and industry representatives” to craft legislation.

Rep. Markey is preparing to send a report directly to Pelosi with proposals to address climate change or offer amendments when the House Energy and Commerce Committee holds a markup on a major piece of climate legislation, sources on and off Capitol Hill said today.

Markey said: “I think you should do the best you can each year. I do. And we have a real chance this year. If there’s an epiphany that occurred at the White House, then there we are with a chance to make history.”

The Sierra Club, until today, has stayed on the sidelines during the contretemps over Lieberman-Warner (S. 2191) fueled by a campaign by Friends of the Earth asking Sen. Barbara Boxer (D-Calif.) to “fix or ditch” the bill. The 1.3 million member organization has now made its position clear.

In an essay posted to Grist’s Gristmill blog this afternoon, Sierra Club executive director Carl Pope delineates clear principles for endorsing climate legislation, all of which Lieberman-Warner currently fails to satisfy:

• Reductions in total emissions on the order of 80 percent by 2050 and 20 percent by 2020
• All allowances should be auctioned or otherwise used to benefit the public
• Revenue should fund “highest-value solutions”, not coal or nuclear energy
• Ensure a just transition for workers, protect vulnerable groups, and help induce world action

He compares the current political situation to the one that led to the Clean Air Act in 1971, saying that “Maine Sen. Edmund Muskie, fearing that industry would block him on other points, acceded” to the industry insistence to grandfather old plants, and that environmentalists like the 25-year-old Pope went along.

He then responds to Sen. Barbara Boxer and advocates of pushing a climate bill this year hell or high water:

Fast-forward to present day: the carbon industries are lobbying to get a deal done this year that would give away carbon permits free of charge to existing polluters – bribing the sluggish, and slowing down innovation. And politicians are telling us that while it would be better to auction these permits and make polluters pay for putting carbon dioxide into our atmosphere, creating that market unfortunately gets in the way of the politics. We are being urged to compromise – to put a system in place quickly, even if it is the wrong system.

Friends of the Earth announced today that it is expanding its web and print “Fix or Ditch” campaign with a local network and cable ad buy before the February 12 Virginia, Maryland, and DC primaries.

The campaign, which challenges Senate Democrats to change Lieberman-Warner’s emissions targets and allowance distribution provisions (S. 2191) to reflect the platforms of the presidential candidates of their party, has drawn fire from Sen. Boxer (D-Calif.) and Environmental Defense as well as a passionate letter of support from Greenpeace.

Meanwhile, American Prospect correspondent (and Tapped co-founder) Chris Mooney challenges the Democratic platforms of 100% auction and 80% reduction in emissions by 2050 in This Will Mean the World to Us (sub. req.):

Many Democratic campaigns, responding to their environmental base, are currently outlining cap-and-trade regimes featuring a highly ambitious 100 percent auction process for the initial pollution allowances or permits, with the proceeds going to other needed public policies, such as investment in the clean-energy technologies that must ultimately supplant fossil fuels. When it comes to specifying precise reductions, meanwhile, the campaigns generally seem to agree that we need something like bringing emissions back to 1990 levels by 2020 and decreasing them by 80 percent by 2050, through a cap that becomes progressively more stringent.

An 80 percent reduction by 2050 does indeed square with what scientists think would be necessary to avoid the worst climate impacts—most notably, the loss of large bodies of land-based ice currently perched atop Greenland and West Antarctica, which, upon sliding into the ocean, would drive catastrophic sea-level rise. It’s one thing to outline a policy in the abstract, however, and quite another to get it through the next Congress. As one climate policy insider says, “The environmental community has a tendency to run their leaders off a plank; that’s what they’re setting up right now with this 80 percent reduction by 2050.”

The more moderate approach of the Lieberman-Warner bill is to reduce capped emissions (and not all emissions are included) by 70 percent by 2050. Lieberman-Warner is also pragmatic in another way: It does not set up a 100 percent auction for emissions allowances, a system that major emitters oppose. They think they should be granted allowances gratis at the outset (or as climate experts say, there should be “grandfathering”). Under Lieberman-Warner, just 24 percent of allowances would be auctioned off initially, though the percentage would increase over time. It’s far easier to get buy-in from industry in this way, and although Lieberman-Warner may have a tough time passing both houses of Congress before the election (or surviving a possible presidential veto), it may be precisely the type of bill that can sail through in 2009.

What’s achievable in climate policy seems to be changing all the time, but still we mustn’t shoot the moon. Consider the perspective of Tim Profeta, current director of Duke’s Nicholas Institute, who previously served as a chief architect of the McCain-Lieberman Climate Stewardship Act, which failed by a 55-to-43 Senate vote in 2003. “As somebody who fought for a freeze of emissions in the 2003 Congress and was told it was too aggressive, it is hard for me to believe where we are now,” Profeta says. “The current movement to require 100 percent auctions and even deeper cuts faces strong political opposition from emitters, many of whom have good arguments about what is economically feasible for their companies. I fear that we might pass up the opportunity for real action now—when it is essential to have the U.S. begin to reduce its emissions—because someadvocatescontinue to shift the objectives to stricter and stricter limits as the debate proceeds.” It’s fine for Democratic candidates, at the moment, to answer the call of environmental groups—the Sierra Club, for instance, has criticized Lieberman-Warner—and present highly ambitious cap-and-trade proposals. But after the election, the new president will need to be flexible and focus on getting a workable bill passed. It can be strengthened later as more science comes in—2050 is, after all, still far away—but we must at least begin ratcheting down emissions now.

Last Thursday, Darren Samuelson of E&E News interviewed Sen. Barbara Boxer (D-Calif.) and an NRDC representative in response to the Friends of the Earth campaign to “fix or ditch” the Lieberman-Warner cap-and-trade bill (S. 2191). In its campaign, Friends of the Earth challenged Boxer for supporting Lieberman-Warner’s high degree of emitter giveaways and subsidies and its target of 60% reductions from 1990 levels of greenhouses by 2050, although the Democratic presidential candidates are calling for 100% auction and 80% by 2050.

Sen. Barbara Boxer (D-Calif.):

Their logic doesn’t hold up. What we need to do is not waste time. If we can get a strong bill signed into law, we should get it. And if we can’t, we shouldn’t. . . . They’re sort of the defeatist group out there. They’ve been defeatists from day one. And it’s unfortunate. They’re isolated among the environmental groups.

Boxer went on to emphasize the importance of holding senators accountable on global warming through test votes.

Julia Bovey, NRDC:

We do not agree with Friends of the Earth. We are not willing to give up the fight. We believe the Lieberman-Warner bill as passed out of committee is a very strong start. That doesn’t mean there isn’t room for improvement.

NRDC had previously described the bill as “a strong start”.

Brent Blackwelder, Friends of the Earth president, responded:

Far from being defeatists, we’re being realists. We’re focusing on what the scientists tell us has to be done to solve global warming. It’s not acceptable to pass a bill that falls short of the science. It’s not acceptable to pass a bill that gives $1 trillion to polluters.

On Monday, Environmental Defense Climate & Air director Mark McLeod sent an email to several Senate offices excoriating Friends of the Earth for placing L-W and Boxer “under attack”, claiming that opposition in the “liberal blogosphere” to Lieberman-Warner or the passage of any climate bill in this session “will become orthodoxy if we do not present a counterview from respected pro-environment voices.”

He characterized Friends of the Earth as “small and fairly isolated” in contrast to ED and “many other major environmental groups” who “are in favor of moving forward to get a strong bill like Lieberman-Warner,” saying also that Friends of the Earth is calling for “unrealistic dramatic changes.”

The full text of McLeod’s email is after the jump.