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Waxman-Markey Introduce Energy/Cap and Trade Discussion Draft

By Judy Sheahan
April 27, 2009

The House of Representative’s Energy and Commerce Chairman Henry Waxman (CA) and Subcommittee Chairman Edward Markey (MA) introduced a discussion draft on March 31 of their energy/cap and trade bill entitled, “The American Clean Energy and Security Act of 2009.” Four days of hearings were held from April 21-24 and featured over 60 witnesses including representatives of the Obama Administration such as Environmental Protection Agency (EPA) Administrator Lisa Jackson, Energy Secretary Steven Chu, and Transportation Secretary Ray LaHood. In his opening statement Waxman said, “The energy legislation we are considering will create millions of jobs, revive our economy, and secure are energy independence and protect our environment.”Markey added, “We begin the process of writing history, as we work to pass new energy legislation that will revitalize our economy, enhance our energy security, create millions of new jobs, and end the global warming crisis.”

ate millions of new jobs, and end the global warming crisis.”

The discussion draft is over 600 pages long and consists of four major titles including:

    1) Clean Energy – promotes renewable sources of energy and carbon capture and sequestration technologies, low-carbon transportation fuels, clean electric vehicles, and smart grid and electricity transmission;

    2) Energy Efficiency – increases energy efficiency across all sectors including buildings, appliances, transportation, and industry;

    3) Reducing Global Warming Pollution – limits the emissions of greenhouse gas emissions; and

    4) Transitioning to a Clean Energy Economy – protects consumers and industry and promoting green jobs during the transition to a clean energy economy.

What is not included is how the tradable emission allowances will be allocated. Last year, the Senate version of the cap and trade bill included a portion of the money collected from the auctioning of these allowances to fund the Energy Efficiency and Conservation Block Grant (EECBG). According to the draft, this issue and others will be addressed through discussions among the Committee members.

The Administration provided their viewpoints regarding the importance of passing an energy bill that includes climate change provisions. EPA Administrator Lisa Jackson said, “President Obama has called on Congress to pass forward-looking legislation that should create millions of clean energy jobs that cannot be shipped overseas…It should reduce our dependence on oil and strengthen America’s energy security and it should start, in a real and tangible way, to tackle greenhouse-gas pollution, which threatens to leave to our children and grandchildren a diminished, less prosperous, less secure world.”

Secretary LaHood said, “the Obama Administration, including the Department of Transportation, considers a comprehensive energy plan that will generate millions of clean energy jobs, reduce our reliance on oil, reduce pollution, create more livable communities, and attack climate change, a major priority.”

Republicans and moderate Democrats alike expressed reservations over the draft. Concerns were raised regarding the definition of and minimum requirements of renewable energy, the costs to industry and consumers, potential jobs lost, as well as the role of coal and nuclear power.

Regarding the issue of coal, Secretary Chu said, “For decades, our energy strategy has been to have little or no strategy at all. For our electricity needs, we burn immense amounts of coal, which is cheap and abundant but a major contributor to global warming – we will continue to use coal as a fuel, but we must do so in a cleaner way.”

Chairman Waxman indicated that he would like to have a completed bill by the Memorial Day Recess. According to Senate Majority Leader Harry Reid (NV), the Senate is expected to take up their cap and trade bill in the fall.