Hill Heat

From the Wonk Room.

Jurisdiction over energy and environmental issues – including global warming legislation – in a key House committee will be moving from two Democrats sympathetic to industrial polluters to a progressive environmentalist. According to the Boston Globe, Rep. Edward Markey (D-MA) will become chair of the Energy and Environment Subcommittee of Rep. Henry Waxman’s (D-CA) House Committee on Energy and Commerce. Markey’s new subcommittee will replace the Energy and Air Quality Subcommittee chaired by Rep. Rick Boucher (D-VA), a coal-country representative, and the Environment and Hazardous Materials Subcommittee chaired by Rep. Gene Green (D-TX), an oil-patch Democrat.

Rep. Henry Waxman (D-CA), like Markey a strong proponent of progressive action to combat climate change, is in the process of reorganizing the energy and commerce committee after wresting control from Rep. John Dingell (D-MI):

As chair of the energy and environment subcommittee, Markey will have jurisdiction over greenhouse gas emissions legislation, such as the iCAP bill he proposed last year. He will also oversee the Clean Air Act, fossil energy, nuclear energy, drinking water and Superfund cleanups. Markey will remain chair of the House Select Committee on Energy Independence and Global Warming, which has no power over legislation.

Boucher will take Markey’s former seat as chair of the subcommittee in charge of telecommunications and the Internet. Boucher, like Markey, is a champion of network neutrality and patent reform.

Demonstrating the jurisdictional scope of climate policy, Markey’s iCAP cap-and-trade legislation (HR 6186) was referred to ten different committees yesterday:

• Energy and Commerce
• Ways and Means
• Science and Technology
• Natural Resources
• Agriculture
• Foreign Affairs
• Education and Labor
• Transportation and Infrastructure
• Oversight and Government Reform
• Rules

From the press release:

Rep. Edward J. Markey (D-Mass.) introduced a revolutionary new global warming bill today that would reduce global warming pollution according to scientific targets, reinvest any revenue back to American workers and technology, and would re-establish America as a leader in solving the globe’s greatest challenge, climate change.

At a speech at the Center for American Progress this morning, Rep. Markey, who is Chairman of the House Select Committee on Energy Independence and Global Warming, and a senior member of the Energy and Commerce and Natural Resources Committees, laid out his science- and consumer-based vision for climate legislation.

“I am here today because the chorus for change is deafening. The time for action is now,” said Rep. Markey in his prepared remarks. “We must cap pollution, we must invest in consumers, jobs and the technology of tomorrow, and America must lead the world in solving our greatest challenges, and we must start now.”

The bill is called the Investing in Climate Action and Protection Act, or iCAP for short, the small “i” a tip of the cap to the technological potential of clean energy. The bill also proffers a new paradigm in global warming legislation: the Cap-and-Invest system. The bill caps pollution at 85 percent below 2005 levels by 2050. It then uses an auction system that sets a price on carbon, and allows companies to compete for reductions, or buy or trade credits within the system.

The “Investing in Climate Action and Protection Act” (iCAP Act) amends the Clean Air Act to establish an economy-wide cap-auction-and-trade system that adheres to five core principles:

1. Reduce U.S. global warming pollution by 85 percent by 2050, the necessary U.S.

The iCAP Act’s cap-auction-and-trade program will cover 87 percent of U.S. greenhouse gas emissions and will reduce covered emissions to 2005 levels by 2012, to 20 percent below 2005 levels by 2020, and to 85 percent below 2005 levels by 2050.

The following “covered entities” will be regulated under the cap: (1) power plants and large industrial facilities; (2) entities that produce or import petroleum- or coal-based liquid or gaseous fuels; (3) entities that produce or import hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or nitrogen trifluoride; (4) natural gas local distribution companies; and (5) geological carbon sequestration sites.

The iCAP Act will achieve 7 percent additional coverage (a total of 94 percent coverage) through (1) mandatory performance standards for coal mines, landfills, wastewater treatment operations, and large animal feeding operations; and (2) voluntary financial incentives to farmers and forest managers to reduce greenhouse gas emissions and increase carbon storage. The iCAP Act also sets mandatory performance standards for new coal-fired power plants, requiring them to capture and sequester 85 percent of their CO2 emissions within a set timeframe.

2. Auction pollution allowances, instead of giving them free-of-charge to polluters, to avoid windfall profits for polluters, ensure fairness and effectiveness, and reduce social costs.

The iCAP Act begins by auctioning 94 percent of allowances in 2012 and transitions to a 100 percent auction in 2020. The 6 percent of allowances not initially auctioned are distributed as transitional assistance to U.S. industries that are energy-intensive and exposed to international trade competition (e.g., iron and steel, aluminum, cement, glass, and paper). The iCAP Act permits any person to buy, sell, or transfer allowances or to “bank” them for future use. Covered entities also may borrow allowances from the allowance budget for future years, but these “loans” must be repaid within five years with interest. Covered entities can meet up to 15 percent of their annual obligations with EPA-approved domestic offset credits and up to an additional 15 percent with EPA-approved international emission allowances or offset credits. Domestic and international offset credits are subject to rigorous standards to ensure reductions in emissions or increases in sequestration are real, verifiable, additional, permanent, and enforceable. The Federal Energy Regulatory Commission will oversee the carbon market to prevent fraud and market manipulation.

compensate for any increase in energy costs as a result of climate legislation.

The iCAP Act returns over half of auction proceeds to low- and middle-income households through rebates and tax credits. This will compensate all increased energy costs due to climate legislation for all households earning under $70,000 (66 percent of U.S. households), and will provide benefits to all households earning up to $110,000 (over 80 percent of U.S. households).

climate policy, spur the development of advanced low-carbon technologies, grow the U.S.

The iCAP Act uses the remaining auction proceeds to fund:

• clean energy technology research, development, demonstration and deployment;
• efficiency policies to reduce the costs and consumer impacts of climate policy;
• incentives to U.S. farmers and foresters to reduce greenhouse gas emissions and increase carbon storage in agricultural soils and forests;
• green jobs training and assistance for workers to transition into the new jobs of a low-carbon economy;
• reduction of deforestation and deployment of clean technologies in developing countries;
• programs to increase resilience to climate change impacts in the United States and in developing countries; and
• climate change education.

India, to take comparable action to reduce global warming pollution to protect the competitiveness of U.S. industry.

Under the iCAP Act, developing countries that take comparable action to reduce global warming pollution will have access to funding from the International Clean Technology Fund and will be allowed to sell “offset credits” into the U.S. market. Developing countries that carry out programs to reduce emissions from deforestation will be eligible for assistance from an International Forest Protection Fund. If a country fails to take comparable action by 2020, importers of energy-intensive primary goods (e.g., iron and steel, aluminum, cement, glass, and paper) from that country will have to purchase special reserve allowances to account for pollution generated in the production of such goods. Until 2020, U.S. manufacturers of competing primary goods will be given free allowances to prevent loss of jobs or “leakage” of emissions due to international competition.

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.

Originally posted at the Think Progress Wonk Room.

In continued defiance of Congressional oversight, the Environmental Protection Agency (EPA) has flatly declined to obey a subpoena from the House Committee on Global Warming and Energy Independence. The subpoena for documents relating to the EPA’s refusal to obey the Supreme Court mandate to regulate greenhouse gases was issued by a unanimous, bipartisan vote on April 2, a year after the Supreme Court decision.

On April 11, the EPA requested and received an extension to respond, but today the agency has decided not to turn over the documents:

Whether or not the EPA has “grave concerns” about “erroneous impressions,” a “chilling effect,” and “institutional prerogatives,” these are not legally defensible reasons to defy a Congressional subpoena. In a terse response, Committee chair Ed Markey (D-MA) found the reasoning “unpersuasive.” The letter continues:

Of course, if the EPA simply turned over the documents, it would no longer be under such a “cloud.”

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.”

Toyota is now responding to NRDC’s challenge to drop its opposition to the Markey-Platts CAFE standard increase (since echoed by UCS and Ed Markey, and written up by Tom Friedman):

There are various bills before Congress that would mandate a new target of 35 mpg by 2020 and require both cars and trucks to meet that standard. Our engineers tell us the requirements specified by these proposed measures are beyond what is possible. Toyota spends $23 million every day on research and development but, at this point, the technology to meet such stringent standards by 2020 does not exist.

Toyota has long supported an increase in the Corporate Average Fuel Economy (CAFE) standards. Moreover, Toyota has always exceeded federal fuel economy requirements. We are continuously striving to improve our fuel economy, regardless of federal mandates.

Toyota currently supports a proposal known as the Hill-Terry bill, HR 2927, that would set a new standard of up to 35 mpg by 2022 (up to a 40% increase) and maintain separate categories for cars and light trucks. Although this won’t be easy, we believe it is achievable.

House Energy Independence and Global Warming Committee chairman Ed Markey responds: “Apparently the only thing that separates Toyota from the ‘impossible dream’ of 35 miles per gallon here in the U.S., is a flight across the Pacific Ocean,” as Toyota meets Japan’s (and Europe’s) fuel efficiency standards of greater than 40 MPG, according to the International Council on Clean Transportation.