Hill Heat

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.)

Witnesses

• Fred Krupp, President, Environmental Defense
• The Honorable Eileen Claussen, President, Pew Center on Global Climate Change
• Ron Sims, King County Executive, State of Washington
• Kevin Book, Senior Analyst and Vice President, Friedman Billings Ramsey & Company, Inc.
• Christopher Berendt, Director, Environmental Markets and Policy, Pace

Kevin Book is a pro-nuclear energy analyst. Chris Berendt ([email protected]) advises companies how to incorporate emissions management into their business.

15/11/2007 at 10:00AM

The U.S. Chamber of Commerce is one of the first lobbying groups to come out strongly against Lieberman-Warner (America’s Climate Security Act, S 2191). Using figures from CRA International’s Anne Smith, a fossil-fuel industry lobbyist, the Chamber claims:

If this bill becomes law, 3.4 million Americans will lose their jobs. American GDP will decline by $1 trillion. And American consumers will be forced to pay as much as $6 trillion to cope with carbon constraints.

The Chamber also released the following commercial:

Other groups, such as Environmental Defense, are supporting its passage and asking their members to lobby in support of the bill.

The second full committee hearing on Lieberman-Warner.

Witnesses

• David Hawkins, Director, Climate Center, Natural Resources Defense Council
• Dr. David Greene, Corporate Fellow, Geography and Environmental Engineering, Oak Ridge National Laboratory
• Robert Baugh, Executive Director, Industrial Union Council, AFL-CIO
• Andrew Sharkey, President and CEO, American Iron and Steel Institute
• Donald R. Rowlett, Director of Regulatory Policy and Compliance, OGE Energy Corp.

13/11/2007 at 11:00AM

In a letter to Sen. Boxer, the AFL-CIO lists its concerns with Lieberman-Warner (S 2191), referring back to testimony at the July 24 hearing on the draft legislation.

The AFL-CIO letter criticizes the adoption of the Sanders amendment to limit advanced-vehicle moneys to 35 MPG or higher and the Barrasso amendment clarifying the types of coal eligible for R&D subsidy.

The other delineated criticisms:

• An overly aggressive Phase I emission reduction target, now increased from a 10 percent to a 15 percent reduction of greenhouse gas emissions below 2005 levels by 2020, before the anticipated commercial availability of carbon capture and storage technologies;
• An unequivocal commitment to achieving a 70 perscent national emision reduction below 2005 levels by 2050, regardless of the degree of subsequent participation of major developing nations like China and India in a global climate protection framework;
• The failure to identify “domestic economic development” as a finding of Congress, a purpose of the legislation, and the failure to require that funding from this legislation be dedicated to domestic investments for new technology and the creation of jobs – from production to construction and exports.
• The absense of an effective safety valve price for carbon dioxide allowances, which will have an adverse impact upon investment decisions and consumer and inducstry pricing.
• The need for a restricted and regulated market system that does not fall prey to predatory trading practices, hoarding of allowances, and the creation of carbon billionaires, which an open market and unlimited banking of allowances can lead to.
• The extent of the use of international allowances combined with offsets, and he possibility of double dipping with offsets by providing allowances for activities that would have been done anyway.
• Inappropriate allocations of emissions allowances, such as the 10 percent allocation to “wires companies” to encourage energy efficiency – a goal that may be better accomplished through direct legislation on energy efficiency standards, now incorporated in other provisions of the bill.

Members of the Senate Environment and Public Works Committee and staff will hold an informal briefing on the provisions of America’s Climate Security Act of 2007 (S 2191).

Contact: Poirier, Bettina – Democratic Staff Director at 202-224-8832

08/11/2007 at 04:00PM

This morning the Senate Committee on Environment and Public Works held its first hearing on Lieberman-Warner (S 2191).

Sens. Warner, Isakson, and Clinton were not in attendance.

Republican senators Voinovich, Inhofe, Vitter, and Craig protested the speed with which the bill is being considered, and called for more hearings and for an analysis from the DOE’s Energy Information Administration and the EPA before markup of the bill. Boxer responded indignantly to the “slow dance” approach, noting that twenty hearings were held this year on global warming and reading a statement from Sen. Warner: “This committee had the chance to hold hearings on Lieberman-McCain and it did not.”

Democratic senators Sanders, Cardin, Lautenberg, and Carper criticized the free allocation of permits to polluters, calling for 100% auction or greater allocation to clean and renewable energy producers.

Sen. Whitehouse (D-R.I.) focused on the lack of jurisdiction and oversight over the market entities created by the bill as a problem area.

Sen. Lieberman favorably noted that entities like electricity company PG&E get both free allocations and proceeds from the auctions.

The witnesses from WRI and the Environmental Resources Trust noted that the basic economic arguments for greater auction of permits: greater economic efficiency and a lower likelihood of market distortion in the form of windfall profits for polluters. They also noted that some degree of free allocation is likely a political necessity. The PG&E witness said he would probably not support the bill without free allocations to his company, and proposed several schemes that would increase subsidies and lower risk for his company at the expense of coal-intensive energy providers. The PG&E witness also made the observation, under questioning from Sen. Sanders, that concentrated solar plants are already competitive with new nuclear plants without government support and would be competitive with current coal/hydro plants if the kinds of subsidies the bill is planning for advanced coal technology were put instead into the renewable sector.

The minority witnesses argued for greater efforts to protect against foreign competition and argued that the short-term caps were too strict. Boxer noted their strong connections to the fossil fuel lobby.

Much more in the live-blog digest transcript.

Full committee hearing on Lieberman-Warner cap-and-trade legislation.

Witnesses

• Peter A. Darbee, Chairman of the Board, CEO, and President, PG&E Corporation
• Jonathan C. Pershing, Director, Climate, Energy and Pollution Program Climate and Energy, World Resources Institute
• Anne E. Smith, Vice President, CRA International
• Dr. Margo Thorning, Senior Vice President and Chief Economist, American Council for Capital Formation
• Wiley Barbour, Executive Director, Environmental Resources Trust

PG&E and WRI are members of US-CAP. The Environmental Resources Trust is connected to Environmental Defense, another US-CAP member.

Thorning has appeared regularly as a minority witness challenging cap-and-trade in previous hearings. Anne Smith also has appeared as a minority witness challenging cap-and-trade in a recent House hearing.

08/11/2007 at 09:30AM

At this week’s subcommittee markup of Lieberman-Warner (S 2191), Senators Sanders (I-Vt.) and Barrasso (R-Wyo.) introduced several amendments, some of which were adopted. The full list gives a good sense of the ideological, political, and economic battles to come as the full Environment and Public Works Committee holds hearings on the bill.

Thanks to the responsive communications staff of each senator, Hill Heat has summaries of all the amendments. See the Sanders amendments in the previous post.

Amendments were defeated unless otherwise noted.

1. Withdrawn after promise from Baucus to work on idea Rocky Mountain Center for the Study of Coal Utilization The amendment would designate the University of Wyoming and authorize a dollar amount. The State of Wyoming and the University of Wyoming have aggressively moved forward with establishing a School of Energy Resources at the University of Wyoming. From their Website: The School of Energy Resources seeks to advance the state of the art in energy-related science, technology, and economics through world-class research, attracting premier scholars and teachers to Wyoming.
2. Withdrawn after promise from Baucus to work on idea Promote high-altitude coal gasification It would provide funds for demonstration projects at 4,000 feet above sea level to mirror guidelines in the Energy Policy Act of 2005. Developing technology that works at altitude benefits the United States, as well as other nations that operate coal power generation facilities at higher altitudes.
3. Adopted, with change to floor of 10,000 btu/lb Provide a definition for what coal is eligible under section 4403 Coal eligible must provide an energy content of 9,000 btu per pound. It attaches a definition to the term “lower rank” coal in the bill. It only mentions sub-bituminous and lignite.
4. Adopted Restore States’ allocation to 5% percent under the General Allocation in Title III by reducing the allocation for International Forest Protection The amendment retains the states’ money, even after an allocation for tribes is made.
5. Withdrawn Provide achievable carbon sequestration standard for new coal powered plants in Title III The carbon sequestration standard would be a gradually increasing one, to allow improvements in our ability to sequester carbon over time. 45% through 2020; 65% from 2021-2040; and 85% by 2041. There is currently no known technology that can capture and sequester 85%. If we want to begin addressing the impacts, we must be realistic in what can be accomplished and build on what we can achieve today.
6. Cap biofuels Expand the definition of covered facilities to include any facility that in a year produces or imports transportation fuel which will emit more than 10,000 carbon dioxide equivalents of greenhouse gas assuming no capture and permanent sequestration of that gas. (It previously singled out only petroleum and coal-based fuels)
7. American Jobs and Family Budget Security Commission The amendment adds a new title to the bill to establish the American Jobs and Family Budget Security Commission, which will study the economic impact to Federal and State budgets of the underlying bill before implementation
8. Sunset The amendment creates a new title under the bill to sunset the bill in five years to review emission goals. We must revisit emission caps to determine whether we are able to achieve the standards set out by the bill.

At this week’s subcommittee markup of Lieberman-Warner (S 2191), Senators Sanders (I-Vt.) and Barrasso (R-Wyo.) introduced several amendments, some of which were adopted. The full list gives a good sense of the ideological, political, and economic battles to come as the full Environment and Public Works Committee holds hearings on the bill.

Thanks to the responsive communications staff of each senator, Hill Heat has summaries of all the amendments, and the full text of those introduced by Sanders. Sen. Barrasso’s amendments will be described in the next post.

Amendments were defeated unless otherwise noted.

SANDERS

1. Funding for Renewables from the Auction Proceeds The amendment will specify that no less than 28% of the funds under the “zero and low carbon energy technologies program” will be used for renewables (as defined in the Energy Policy Act of 2005). The 28% is the same percentage as the maximum amount available to the “advanced coal and sequestration technologies program.”
2. Reduce Funding for Vehicle Re-tooling & Provide Funding for Energy and Environmental Block Grants This amendment would reduce from 20% to 4% the amount of funding from the auction revenues that would be provided to the automobile manufacturing sector and would put the 16% difference into funding an energy and environmental block grant program, whose purposes are to assist State, Indian tribal, and local governments in implementing strategies -
   1. to reduce fossil fuel emissions created as a result of activities within the boundaries of the States or units of local government in an environmentally sustainable way that, to the maximum extent practicable, maximizes benefits for local and regional communities;
   2. to reduce the total energy use of the States, Indian tribes, and units of local government; and
   3. to improve energy efficiency in the transportation sector, building sector, and any other appropriate sectors.
3. Adopted Increase the Accountability for the Automobile Manufacturing Sector Under the Auction Proceeds This amendment would change language in the bill so that to get funding from the auction, the automobile industry would have to be making vehicles that get “at least 35 miles per gallon combined fuel economy calculated on an energy-equivalent basis.”
4. Withdrawn; similar text in substitute amendment Scientific Lookback This amendment would require the EPA Administrator, following a report by the National Academies of Sciences (required by the underlying language), to promulgate regulations to tighten the emissions caps if the latest science suggests that we are not on track to avert a 2 degree Celsius increase in global average temperature.
5. Decrease the Amount of Years Free Allowances Are Given Away to Power Plants & Industry This amendment would reduce, by 10 years, the amount of time the power sector and the industrial sector are given pollution permits (for free by the federal government).
   • 5a. Increase the Amount of Allowances Allocated to the Climate Change Credit Corporation This amendment would change the numbers in the table under section 3201 (Percentage of Emission Allowance Account Allocated to the Corporation) to reflect the decrease in the amount of time that the power sector and industrial sector are given free pollution permits under Sanders amendment # 5.
6. Coal-fired Power Plants This amendment specifies that no coal-fired power plant will commence operation unless it captures and sequesters at least 85% of its CO2.
7. Withdrawn New Entrant Allowances for Renewables Only This amendment would only allow utility-scale renewable projects to receive allowances under the new entrant provision in the bill.
8. Offsets This amendment would limit offsets to an annual amount of no more than 420 million metric tons of allowances, instead of allowing each entity to meet 15% of its emissions reductions with offsets.
9. Emission Reduction Targets This amendment will require the Administrator to promulgate annual emission limits to reduce total US greenhouse gas emissions by 15% below 2005 levels by 2020 and 80% below 2005 levels by 2050