Hill Heat

From the Wonk Room.

Speaking at an event meant to oppose Democratic clean energy legislation, Rep. Mike Pence (R-IN) warned corporations calling for the United States to take action on global warming to “keep their powder dry.” Grist’s Kate Sheppard asked Pence after the GOP mock climate hearing yesterday what he would say to the corporations in the U.S. Climate Action Partnership (US-CAP) who have testified that a mandatory cap on global warming pollution is needed. Pence told companies that support a green economy to “keep their powder dry” as the GOP attempts to preserve Bush-era energy policy:

Um. I, I just would say that any American who is prepared to endorse a national energy tax that there’s a better solution. Uh, that they should keep their powder dry. And uh, take their case to the American people that they don’t need, particularly during this very difficult time in the economic life of our nation, to raise the energy cost on our businesses and on American families.

Watch it:

As Grist noted, “the House heard the leaders of Duke Energy, ConocoPhillips, and DuPont ask for a cap as recently as April 22.” Politico reports that Nike has been telling the U.S. Chamber of Commerce “to take a more progressive stance on the issue of climate change.” And Exelon Corporation, one of America’s largest electric utilities and another US-CAP member, is featured in a new advertisement today from the Environmental Defense Action Fund calling for a carbon cap as a part of comprehensive clean economic policy:

From the Wonk Room.

Today, in the first hearing of the House Energy and Commerce Committee under the leadership of Rep. Henry Waxman (D-CA), a coalition of corporations and environmental organizations renewed their call for an industry-friendly cap and trade system. The U.S. Climate Action Partnership made a tremendous splash two years ago by coming out in favor of a cap-and-trade system to limit greenhouse gases. Though their recommendations overly benefited polluting industries, USCAP’s call for mandatory action changed the political tide in Washington. They deserve credit for moving past conservative rhetoric that denies the need to act, and for stating that “action by the U.S. should not be contingent on simultaneous action by other countries,” a common excuse for delay.

But climate change science and politics have moved on in the past two years, and USCAP has lost its mantle of leadership. Their proposal fails to satisfy the scientific, economic, and societal principles that must underlie any “framework for legislation to address climate change”:

EMISSIONS TARGETS. USCAP’s recommended emissions limits are insufficient to prevent catastrophic climate change. They call for U.S. emissions to be reduced by at most 7 percent below 1990 levels by 2020. However, as Center for American Progress fellow Joseph Romm indicated in a recent report, “A U.S. climate bill should set a target of reducing U.S. greenhouse gas emissions 20 to 30 percent below 1990 levels by 2020.” Furthermore, USCAP calls for “generous limits on the use of offsets” of two to three billion tons of CO2 a year, which means actual emissions wouldn’t have to begin reducing until 2030.

MONEY. USCAP calls for provisions to prevent emissions permits from exceeding a “threshold price” and for “a significant portion of free allowances should be initially distributed to capped entities and economic sectors.” In other words, polluters should be protected from paying the cost of compliance with the already fatally weakened cap. This will lead to windfall profits for polluters at the expense of consumers. President-elect Barack Obama and other progressive leaders have joined the Center for American Progress in calling for full auction of emissions permits to fund public investments and protect low-income consumers from economic hardship.

USCAP members include major global warming polluters in multiple industries—chemical (Dow, DuPont, Johnson & Johnson), oil and gas (Rio Tinto, Shell, BP America), manufacturing (Alcoa, Caterpillar, Siemens, GE, Boston Scientific), automotive (Ford Motor, GM, Chrysler, Deere), and utilities (Duke, PG&E, Exelon, FPL, PNM), as well as the financial services industry that would administer a cap-and-trade system (AIG, Marsh, Xerox).

The environmental organizations in the partnership are the Natural Resources Defense Council, the Environmental Defense Fund, the World Resources Institute, the Pew Center for Climate Change, and the Nature Conservancy. However, the National Wildlife Federation has left the partnership, saying that it instead will work to “enact a cap-and-invest bill that measures up to what scientists say is needed and makes bold investments in a clean energy economy.”

Responses below:

Committee page

Witnesses

• Dr. Gary Yohe, Professor of Economics, Wesleyan University
• Mr. Jeffery Smith, Partner in Charge of Environmental Practice, Cravath, Swaine, and Moore
• Ms. Mindy Lubber, President, Ceres
• Mr. Russell Read, Chief Investment Officer, California Public Employees’ Retirement System

31/10/2007 at 02:30PM

USCAP is a group of businesses (Alcoa, BP, Dupont, etc.) and environmental organizations (Environmental Defense, NRDC, Pew Center, etc.) that have come together to call on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions. Their report: A Call for Action.

The report advocates a cap-and-trade system plus R&D support with the following targets for GHG emissions:

• 100-105% of today’s levels within 5 years of enactment
• 90-100% of today’s levels within 10 years
• 70-90% of today’s levels within 15 years

Witnesses

• Chad Holliday Chairman and CEO , Dupont
• Fred L. Smith Jr. President, Competitive Enterprise Institute
• Jonathon Lash President, World Resources Institute
• Kevin Book Senior Analyst/Vice President, Friedman Billings Ramsey & Company, Inc
• Peter Darbee Chairman, CEO, and President, PG&E Corporation
• Harold G. Hamm Chairman and CEO, Continental Resources, Inc.
• Steve Elbert Vice Chair, BP America

13/02/2007 at 10:00AM