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Mayors/Local Groups Urge EECBG Funding in Cap and Trade Bill

By Judy Sheahan
May 11, 2009

The U.S. Conference of Mayors (USCM), the National League of Cities (NLC), and the National Association of Counties (NACo) sent a letter on May 8 to House Energy and Commerce Committee Chairman Henry Waxman (CA), Ranking Member Joe Barton (TX) and members of the Committee urging them to dedicate a portion of the anticipated revenues generated in the American Clean Energy and Security Act of 2009 (ACESA) to support the Energy Efficiency and Conservation Block Grant (EECBG) program.

ACESA has been designed to increase energy efficiency and reduce greenhouse gas emissions through the establishment of a “Cap and Trade” program. “Cap and Trade” is the term used where “caps” or limits are set for the amount of greenhouse gas emissions (e.g. carbon dioxide, methane, etc) that are released by a facility or company. If a facility is able to reduce their emissions below the designated cap, they are allowed to “trade” or sell those emissions to another facility that is not able to reduce their own emissions to the designated level. What is not yet included in the draft bill is if Congress will originally auction the emission permits or give “allowances” to certain facilities or companies to allow them time to retrofit their facilities.

According to the Center of American Progress, “If the federal government auctions the emissions permits to the companies required to reduce their emissions, it would create a large and dependable revenue stream. These financial resources could be used to achieve critical public policy objectives related to climate change mitigation and economic development.”

Specifically, the local government organizations asked Congress to set aside a portion of any revenues generated from the “Cap and Trade” section of the bill to provide ongoing funding to the EECBG program, a program designed to support local and state government efforts to increase energy efficiency and reduce greenhouse gas emissions. Last year, the Senate version of the cap and trade bill designated a portion of the money collected from the auctioning of these allowances to fund EECBG.

The three local government organizations outlined their concern that the American Clean Energy and Security Act of 2009 included virtually no mechanisms to assist local governments in their efforts to reduce greenhouse gas emissions.

The letter stated, “Since 2005, more than 940 mayors, numerous city and county officials have pledged to reduce their greenhouse gas emissions and shrink their carbon footprint. In fact, local governments were leading the way when the federal government and most of the states were silent on this issue. Local governments have implemented energy efficiency projects in municipal, residential, and commercial buildings, retrofitted fleets, invested in renewable energy technology, and raised their citizens’ awareness about the need for individual and community-wide efforts to reduce greenhouse gas emissions. Supporting this program with a dedicated funding source will enable cities, counties, and states to continue and expand their efforts to conserve energy, reduce greenhouse gas emissions, and protect the environment by implementing increased energy efficiency and renewable energy development programs in our communities.”

Chairman Waxman has stated that he wants to report the bill out of Committee by the Memorial Day recess. However, the markup has been postponed twice as Mr. Waxman and Representative Edward Markey (MA), the two principal authors of the bill, continue to negotiate with Democrats, who represent districts that will be economically hurt by the legislation, to secure their support. It is currently scheduled to be marked up the week of May 11.

On April 30, U.S. Conference of Mayors CEO and Executive Director Tom Cochran sent an action alert to all Mayors, urging Mayors to contact their Congressional representative and ask them to include a dedicated source of funding for the Energy Efficiency Conservation Block Grant program.