Hill Heat

At today’s markup of Lieberman Warner (S 2191), changes were made to win the support of Sen. Lautenberg (D-N.J.), ensuring passage by a 4-3 vote (Sanders, Isakson, and Barrasso voting no) to send the bill to the full Committee on Environment and Public Works.

The changes, according to CQ:

• Extending the scope of the bill to cover all emissions from the use of natural gas. The introduced bill covered natural gas burned in power plants and industrial processes but not in commercial and residential buildings.
• Requiring the EPA to make recommendations to Congress based on periodic reports from the National Academy of Sciences. The bill already would direct the academy to evaluate whether changes in the law are necessary, based on the state of the environment and available technology.

These were two of the four specific changes called for by NRDC at the initial hearing on the bill.

Amendments were introduced by Sen. Sanders (I-Vt.) and Sen. Barrasso (R-Wyo.). Changes made by amendments adopted at the markup:

• Advanced tech auto funding limited to vehicles with minimum of 35 mpg (Sanders 3)
• More allocations given to states, taken from international forest protection (Barrasso 4)
• Definition of lower-rank coal eligible for 25% of CCS funding changed from “for example, bituminous and lignite” to coal with a heat content below 10000 BTU/lb (Barrasso 3)

Sen. Isakson reiterated his passion for nuclear power, and Barrasso argued for stronger coal subsidies, a sentiment supported by Sen. Baucus. Lautenberg compared their role to that of doctors faced with a sick patient who could become terminal, asking why anyone would withhold the necessary medicine. The Senators often laughed about their needs to compromise and balance each others’ parochial interests.

Markup of America’s Climate Security Act, S. 2191.

Prior to hearing changes were made to secure the support of Sen. Lautenberg, ensuring passage with the votes of Lieberman, Baucus, Lautenberg, and Warner. The changes made in the form of a substitute amendment, according to CQ:

• Extending the scope of the bill to cover all emissions from the use of natural gas. The introduced bill covers natural gas burned in power plants and industrial processes but not in commercial and residential buildings.
• Requiring the EPA to make recommendations to Congress based on periodic reports from the National Academy of Sciences. The bill already would direct the academy to evaluate whether changes in the law are necessary, based on the state of the environment and available technology.

Amendments were introduced by Sen. Sanders (I-Vt.) and Sen. Barrasso (R-Wyo.). Changes made by amendments adopted at the markup:

• Advanced tech auto funding limited to vehicles with minimum of 35 mpg (Sanders 3)
• More allocations given to states (Barrasso 4)
• Low-rank coal definition changed from coal below 9000 BTU to 10000 BTU (Barrasso 2)

Live-blog informal transcript of the hearing is below.

VOINOVICH Speaking at the National Press Club on Friday, Sen. George V. Voinovich (R-Ohio), a member of the Committee on Envrionment and Public Works, criticized the “overly aggressive first phase of emission reductions” in the draft Lieberman-Warner legislation, which calls for the Sanders-Boxer target of reduction to 1990 levels of emissions (15% reduction from 2005 levels) by 2015.

According to CQ (subscriber only):

Voinovich said that legislation should include financial incentives for technological development and deployment, such as loan guarantees, government procurement programs and international technology transfer promotion.

“Let’s do a Manhattan project,” Voinovich said. “Let’s do an Apollo project.”

Without new technologies, he warned, coal-fired power plants would simply switch over to using natural gas

ISAKSON Johnny Isakson (R-Ga.) will introduce a “nuclear title” amendment at the subcommittee markup tomorrow for more nuclear power plant incentives. At last week’s hearing, Isakson said it was “just crazy” to not support nuclear power. Update: Isakson may miss the markup to attend a White House meeting on the Georgia drought. David Roberts notes the irony that means Isakson won’t be able to support subsidies for the most water-intensive source of electricity.

ALEXANDER Lamar Alexander (R-Tenn.) sits on the EPW committee. He believes the cap-and-trade system should not apply to the transportation sector through the “upstream” cap on refiners and fuel importers, instead only applying a Low Carbon Fuel Standard (LCFS) such as that in S. 1324 and HR 2215.

According to CQ, Alexander will amend Alexander-Lieberman (S 1168), a power-sector cap-and-trade bill, to include transportation and building efficiency standards.

INHOFE Inhofe, EPW’s ranking member, continues to challenge the science of climate change.

Erich Pica, Friends of the Earth:

The Lieberman-Warner bill will reward corporate polluters by handing them pollution permits worth almost half a trillion dollars. And that’s just one part of this bill. The bill also includes hundreds of billions of dollars of other mind-boggling giveaways. The levels of pollution-rewarding giveaways in this bill are truly obscene.

In calculating the value of emissions allowances, FoE follows the estimates of EPA’s analysis of McCain-Lieberman (Climate Stewardship and Innovation Act of 2007, S. 280) which estimated that between 2015 and 2050, the price of emissions permits would increase from an average of $14 to $78 per ton of carbon dioxide equivalent greenhouse gas emissions.

Friends of the Earth’s analysis found that the bill:

• Provides the coal industry and other fossil fuel industries pollution permits worth $436 billion over the life of the legislation; 58 percent of this amount goes to coal (sec. 3901)
• Returns revenue raised through auctions directly to polluters—for example, an additional $324 billion would subsidize the coal industry’s efforts to develop carbon capture and storage mechanisms (sec. 3601)
• Directs another $522 billion of auction revenue to low or zero-emissions technologies, which could result in handouts to the nuclear power, big hydro and coal industries, which are not clean (these funds could also be directed toward important clean technologies, such as wind and solar—the legislation is not specific) (sec. 4401)

On Thursday, the Private Sector and Consumer Solutions to Global Warming and Wildlife Protection Subcommittee of the Senate Committee on Environment and Public Works, chaired by Joe Lieberman (I-Conn.), will markup S. 2191, the Lieberman-Warner cap-and-trade climate legislation.

The LA Times calls for Congress to implement “simple carbon taxes that would assess polluters for the cost of their environmental damage and offset the resulting economic pain by lowering other taxes”, and failing that, 100% auction. The Roanoke Times supports L-W but calls for a tighter cap, citing UCS. The Center for American Progress, in an article primarily about the California wildfires, calls for these changes to L-W:

• Mandating that new coal fired power plants reduce their pollution by 85 percent using carbon and capture storage technology.
• Providing significantly more resources to protect people in Africa and Asia at risk from global warming impacts.
• Requiring all emitters to purchase allowances that allow them to emit greenhouse gases.

The Great Falls Tribune takes a look at the Montanan perspective, noting Baucus’s scripturally based support for the bill, the no-till agricultural offsets, allowances for rural electric cooperatives, CCS incentives, and the weak cap targets. The Helena Independent Record has more of Baucus’s perspective.

MarketWatch notes that hundreds of billions of dollars are at stake, noting that environmentalists are calling for 100% auction and that US-CAP has avoided a stance, and links to the CBO report from this spring, Trade-Offs in Allocating Allowances for CO2 Emissions.

The Politico takes a look at the lobbying on L-W. Note to the Politico: “allocate” is not “legislative slang for ‘give away’”—auctions and free distribution are the alternative methods of allocation.

Visit Hill Heat’s continuing coverage of. S 2191.

The initial draft.

Witnesses

• Kevin Anton – president, Alcoa Materials Management
• Frances Beinecke – president, Natural Resources Defense Council
• William R. Moomaw – director, Institute for the Environment, Tufts University
• Will Roehm – vice president, Montana Grain Growers Association
• Paul Cicio – executive director, Industrial Energy Consumers of America

As Lieberman-Warner has its first hearing, Sierra Club, Audobon, Physicians for Social Responsibility, U.S. PIRG released these seven principles for climate change legislation:

• Reform energy policy: New national energy policies should encourage efficiency, innovation, competition, and fairness. We need more aggressive energy efficiency policies for electricity and buildings, increased CAFE standards like those passed by the Senate, and the renewable electricity standard included in the House energy bill.
• Promote a clean energy future: Invest in energy efficiency and renewable energy to create new industries and good jobs here at home.
• Cap and cut carbon emissions to science-based levels: Science tells us in order to prevent the worst impacts of global warming we must start cutting global warming pollution by 2012, with reductions in total U.S. greenhouse gas emissions of at least 15 to 20 percent below current levels by 2020 and 80 percent by mid-century.
• Use all public assets for public benefit: The value of carbon permits should benefit the public – through auctions or other mechanisms – not generate windfalls for polluting industries. Free allocations, if any, must be limited to a short transition period.
• Ensure a just transition: Allowances should be used to help finance a just transition that keeps and creates jobs, reduces impacts on low-and moderate-income citizens, and mitigates harm to affected workers and communities.
• Provide aid to adapt to an altered climate: Allowances should be used to help distressed and impoverished people around the world, as well as wildlife and ecosystems in the face of global warming’s varied threats.
• Manage costs without breaking the cap. “Safety valves” and other devices that break the cap on emissions must not be allowed. Any offsets must be real, surplus, verifiable, permanent, and enforceable.

The intial co-sponsors of Lieberman and Warner’s America’s Climate Security Act (S. 2191) are:

• Sen Ben Cardin (D-Md.)
• Sen Bob Casey (D-Penn.)
• Sen Norm Coleman (R-Minn.)
• Sen Susan Collins (R-Maine)
• Sen Liddy Dole (R-NC)
• Sen Tom Harkin (D-Iowa)
• Sen Amy Klobuchar (D-Minn.)

Cardin, Casey, and Klobuchar are also co-sponsors of Sanders-Boxer (S. 309). Casey and Harkin are co-sponsors of Binagaman-Specter (S. 1766). Coleman, Collins, and Klobuchar are co-sponsors of McCain-Lieberman (S. 280).

Casey is the author of the Climate Change Worker Assistance Program provision in S 2191.

Coleman is the chair of the Senate biofuels caucus.

Harkin is the chair of the Senate Agriculture Committee.

Klobuchar is the author of the Greenhouse Gas Registry provision in S 2191 (introduced as S 1387).

As reported at Gristmill, Sens. Lieberman and Warner intend to submit the draft of their cap-and-trade legislation, America’s Climate Security Act (S. 2191), today. The legislation incorporated suggestions from stakeholders to adjust some figures from the draft outline released at the beginning of August. Notably, the 2020 reduction from 2005 emissions levels is increased from 10% to 15% (the Sanders-Boxer target), and the peak auction percentage (reached in 2036) is increased from 52% to 73%. There are numerous other components, adjustments, and details.

How does Lieberman-Warner stack up to the Sanders-Lautenberg principles or the Step It Up 2 provisions?

Sanders-Lautenberg

• CAP: The 2020 target is as strong as Sanders-Boxer, but the 2050 target is much weaker (67% by 2050 instead of 80%) and only 75% of emissions are regulated; there are numerous explicit provisions to loosen controls to protect the economy but none to change them to stabilize atmospheric concentrations of GHG; however, it calls for a report every three years looks at both economic and environmental impacts
• POLLUTER PAYS: The bill does not transition quickly to a full auction. Spending of auction revenues is generally in line with Sanders-Lautenberg, though large amounts go to CCS development
• ENCOURAGE STATE LEADERSHIP: The bill explicitly rewards states with stricter standards than the federal cap
• ADDITIONAL PROVISIONS: The bill includes green building standards and low-carbon fuel provisions, among others, but does not require new coal plants to have CCS
• NO LOOPHOLES AND LIMITED OFFSETS: The annual caps may be temporarily increased by as much as 20% if later caps are tightened and companies pay interest on “borrowed” allowances; offsets are limited to 15% of allowances and are held to the Sanders-Lautenberg standard

Step It Up 2

• GREEN JOBS: There is some funding for green jobs, but not 5 million by 2015
• EFFICIENCY: There is not a federal efficiency standard of 20% greater efficiency by 2015
• CAP: As decribed above, the cap is not economy-wide, and is 15% by 2020 and 67% by 2050, not 30% by 2020 and 80% by 2050
• NO NEW COAL: There is not a moratorium on new coal plants without CCS

Full comparison of October release with the original August draft below the jump.