By Judy Sheahan
May 24, 2010

Senators John Kerry (MA) and Joseph Lieberman (CT) finally unveiled their climate and energy bill on May 12 after months of closed-door negotiations. The bill, entitled The American Power Act, includes no provisions for the Energy Efficiency and Conservation Block (EECBG), a top priority for the Conference of Mayors. Mayors are encouraged to call their Senators and urge them to include EECBG in the final legislation.

Both Kerry and Lieberman had included funding for the EECBG program in their previous climate and energy bills. And although these Senators have lauded mayors' efforts on the issue of climate protection with Kerry describing America's mayors as “trailblazers” on this issue, they choose not to include any direct support for the EECBG program in this legislation. EECBG was designed specifically to be a resource for cities, counties and states to implement local programs that would increase energy efficiency and reduce greenhouse gas emissions.

 In a statement released by The U.S. Conference of Mayors CEO and Executive Director Tom Cochran said, “We speak out today because we still seek a partnership with the federal government. Science tells us that the threat to our globe is caused by the actions of human beings. The mayors of the United States are number one at changing human behavior. Energy Efficiency and Conservation Block Grants are tools that we need to forge the public/private initiatives as well as enlisting and involving the 85 percent of the American people who live in cities and their metro areas. The bill today has a goal of reducing carbon pollution by 17 percent by 2020 and by 80 percent by 2050. Today we stand and speak out to say that the nation cannot meet these goals unless mayors, cities, and their metro regions are totally involved in this national effort.”

To meet the greenhouse gas emission reduction goals, the bill would target the various sectors that contribute greenhouse gases by those divisions. It would require electric utilities to comply with the carbon caps at the beginning of the program while manufacturers would be phased in by 2016. A cap and trade program would be established that would cover about 7,500 power plants and factories and only these polluters would be allowed to purchase carbon credits. Two-thirds of the revenue generated from the cap and trade program that doesn't go towards deficit reduction would be returned to consumers. Eventually, 100 percent of the revenues generated, not aimed towards deficit reduction, would be returned to consumers.

The transportation sector will be handled separately and a portion of the revenues generated would be reinvested in transportation projects (see related article on page 8).

The bill would also provide major incentives for nuclear generation including $54 billion in loan guarantees as well as tax breaks. There are also provisions to allow offshore drilling where states who agree to allow offshore drilling would receive 37.5 percent of the royalties paid by the oil companies that are drilling off their coasts. The offshore drilling provisions may prove to be one of the most controversial pieces of the legislation given the recent oil spill in the Gulf. Many Democratic Senators have said they will not be voting for any bill that contains offshore drilling provisions.

Although the bill was crafted to entice Republican Senators to support the bill, no Republicans have stepped forward to endorse the bill. Senator Lindsay Graham (SC) worked with Kerry and Lieberman to craft the bill. However, he withdrew from negotiations after a disagreement with Majority Leader Harry Reid (NV) regarding legislative priorities after Reid remarked that immigration reform would take precedence over climate change legislation. Although Reid later said that climate and energy legislation would be taken up first, Graham has not returned to the negotiations.

The bill, which has been labeled a “discussion draft,” was given to the Environmental Protection Agency, the Energy Information Administration, and the Congressional Budget Office to conduct an economic and environmental analysis. This analysis, which may take from six to eight weeks, must be completed before the bill is brought to the Senate floor. Mayors are encouraged to utilize this time to contact their Senators and urge them to include the EECBG program in the final bill.