76th Annual  Meeting
The U.S. Conference of Mayors
76th Annual Meeting
June 20-24, 2008
Miami

2008 ADOPTED RESOLUTIONS

CITY PRIORITIES FOR A CAP AND TRADE SYSTEM

WHEREAS, over 850 mayors across the country representing more than 80 million Americans, have signed the U.S. Mayors Climate Protection Agreement, which commits to local solutions to address global warming, and calls for strong climate policy; and

WHEREAS, cities across the country are doing their part to confront the climate crisis by taking local action to reduce the carbon footprints of government operations and the community and have made climate protection a top priority; and

WHEREAS, while many climate solutions must be implemented at the local level to truly succeed cities will need strong support from new federal, regional and state policies; and

WHEREAS, the Congress of the United States is considering legislation to develop national climate protection policy, including design of a cap and trade system, which could support local goals and climate protection actions; and

WHEREAS, the US Conference of Mayors has endorsed a federal policy framework that utilizes market mechanisms to promote flexibility and foster creative approaches to climate protection; and

WHEREAS, the US Conference of Mayors has endorsed an 80 percent reduction in greenhouse gas emissions from 1990 levels by 2050 as the necessary and appropriate goal for our nation, region, and state -- and the long-term target toward which our individual communities also should strive; and

WHEREAS, this emissions threshold would put us on a clear reduction path at the levels needed globally to stabilize greenhouse gases in the earth’s atmosphere, and is a threshold level informed both by regional climate scientists, such as those at the University of Washington’s Climate Impacts Group, as well as by leading international institutions such as the United Nations’ Intergovernmental Panel on Climate Change(IPCC); and

WHEREAS, A soft cap, or safety valve provision would allow regulated entities to exceed their emissions cap when the price of carbon goes above a ceiling price thereby undermining greenhouse gas reduction goals by prioritizing price security over emission reductions; and WHEREAS, the use of offsets or other methods shall be analyzed as an alternative to a safety valve as a limited component of any compliance structure, ensuring real reductions while still mitigating cost impacts; and

WHEREAS, the greenhouse gas reduction goals of the US Mayor’s Climate Protection Agreement are economy-wide, and so a cap-and trade program that includes all major sources of emissions, including natural gas and transportation, is vital to cities’ability to meet their goals; and

WHEREAS, while the electricity sector has been the primary focus of most cap-and-trade discussions, transportation is one of the largest sources of GHGs in many cities; and

WHEREAS, by setting a firm cap on upstream transportation fuels, a cap and trade program provides an important safeguard and complement to other federal, state, and local regulatory policies aimed at reducing emissions in the transportation sector; and

WHEREAS, cities will need a well-rounded package of transportation policies to meet climate protection goals and meaningfully reduce emissions in the transportation sector; and

WHEREAS, natural gas, while a cleaner burning fuel than some energy sources, is still a significant contributor to carbon footprints in many cities; and

WHEREAS, the economic efficiencies associated with, and underpinning, a cap-and-trade system depend on the integrity of price signals generated by internalizing the costs of greenhouse gas emissions; and

WHEREAS, there is broad agreement among economists that, under a cap-and-trade system, auctioning greenhouse gas allowances will lead to the clearest price signals; and

WHEREAS, free allocation of emission allowances will tend to distort price signals by not fully internalizing the costs of greenhouse gas emissions, thus diminishing the relative value of, and investment in, energy efficiency and lower-carbon technologies; and

WHEREAS, Over 70% of the world’s energy is consumed in or by the world’s cities and will therefore have to be actively engaged in reducing emissions in order for any national climate protection program to be successful; and

WHEREAS, A substantial amount of revenue will be generated by almost any variation on a cap and trade system, either through allocation of credits directly to sources or other entities, or through distribution of auction revenues; and

WHEREAS, the markets for renewable energy and energy efficiency and new revenue sources created by a cap and trade system allow for critically needed investments in job creation, job training and entrepreneurial opportunities, particularly for disadvantaged communities,

NOW, THEREFORE, BE IT RESOLVED, the US Conference of Mayors urges congress to pass legislation that creates a market for carbon through development of a fair and flexible national cap and trade system; and

BE IT FURTHER RESOLVED that, the US Conference of Mayors supports a hard cap on greenhouse gas emissions that results in real reductions in greenhouse gas emissions consistent with the scientific consensus, or 80 percent reduction below 1990 levels by 2050; and

BE IT FURTHER RESOLVED that, the US Conference of Mayors opposes the inclusion of a “safety valve” provision, and instead supports alternative flexibility measures to help control costs, such as the use of offsets; and

BE IT FURTHER RESOLVED THAT, the US Conference of Mayors supports an economy-wide cap, including upstream regulation of natural gas and transportation fuels in the recommended scope for a cap and trade system; and

BE IT FURTHER RESOLVED THAT, the US Conference of Mayors supports an accelerated schedule toward full auctioning of those emission allowances going to regulated entities; and states its support for re-investment of auction revenues into conservation and efficiency programs as a priority to offset costs for consumers, and further supports the development and implementation of measures to ensure containment of administrative costs associated with auctioning.

BE IT FURTHER RESOLVED THAT, the US Conference of Mayors supports using revenues generated by a cap and trade program to recognize the important role that local governments play in climate protection by channeling some portion of funds generated directly to local governments in support of continued and expanded efforts to reduce emissions, including, but not limited to full funding of the Energy Efficiency and Conservation Block Grant program; investment in economic and workforce development strategies that help to build an inclusive green economy which provides pathways into prosperity and expanded opportunity, particularly for low-income communities; clean energy, transit and alternative transportation infrastructure; low income assistance; and adaptation.