climate legislation

Yesterday morning, the Senate Environment and Public Works Committee passed S. 1733 – The Clean Energy Jobs and American Power Act.  The bill would create a strong cap-and-trade program with aggressive emission reductions targets through 2050. The bill now becomes one piece of a puzzle that will include the energy bill passed by the Senate Energy and Natural Resources Committee earlier this year, contributions from as many as four other major Senate committees, and contributions from Senators acting outside the committee process.

The importance of the latter is suggested by the announcement Wednesday by Senators Kerry, Graham, and Lieberman that they will be working together to craft a climate bill that incorporates provisions of the EPW bill with other provisions in line with Kerry and Graham’s New York Times op-ed.

Pulling these disparate pieces together into a coherent whole and garnering the 60 votes necessary for passage of a bill through the Senate will surely require strong leadership in the legislative process by the Obama administration.

Michael Tubman is the Congressional Affairs Fellow

The menu of policy options for reducing greenhouse gas emissions and tackling climate change is pretty lengthy, and the portions offered are quite substantial. Congress now has to make the choice of which regulatory option to order, and as we saw in last week’s hearings at the Senate Environment and Public Works Committee, they are open to recommendations. One interaction on Thursday between Senator Arlen Specter (D-PA) and Fred Krupp, President of the Environmental Defense Fund, highlighted the need to pick a single, effective strategy to tackle climate change and not overstuff our economy with duplicative regulations. The exchange focused on whether the EPA should continue to proceed with regulations through the Clean Air Act’s New Source Review (NSR) program even if a comprehensive climate change program is enacted.

Given existing requirements, regulation of greenhouse gases under any provisions of the Clean Air Act will trigger NSR. Under NSR rules, the construction of new stationary sources and major modifications of existing ones must be permitted to ensure that they will not contribute to significant deterioration of air quality. While NSR has long been used to regulate traditional air pollutants, when it comes to feeding an appetite for climate change regulation, NSR doesn’t really hit the spot.  NSR is rather inflexible, costly to implement, and results in relatively limited emission reductions. Given the difficulty in developing standards for the large number of sources that emit greenhouse gases and the need to provide incentives for technological change in order to achieve deep reductions over time, new source review simply isn't the right recipe for our current needs. 

This chef’s recommendation: a well-designed cap-and-trade program that is aggressive enough to yield needed reductions in greenhouse gas emissions while spurring the technological innovations we need to make those reductions and grow our economy. Enactment of a cap-and-trade program means we can send back duplicative programs like NSR and still be satisfied.

Sure, we’ll need complementary policies that work in a coordinated fashion with a cap-and-trade program. These side dishes of the cap-and-trade meal are targeted programs that are designed to enhance cap-and-trade’s impacts without getting in the way of the functioning of the primary program. A comprehensive climate bill can work just fine without NSR.

Michael Tubman is the Congressional Affairs Fellow

Throughout testimony presented by several witnesses before the Senate Environment and Public Works Committee (EPW) last week, one theme consistently resurfaced – cap and trade will spur investments in clean technology and increase jobs in certain sectors by putting a price on carbon. It is a simple formula: a price on carbon will create certainty, certainty will lead to increased investments in clean energy technology, and increased investments will lead to a larger share of the clean technology market.

As Kate Gordon, Senior Policy Advisor of the Apollo Alliance, testified, the United States is already losing ground on the international front. Clean energy investments are the key to our new economy and have been growing even in the face of inconsistent federal incentives, but without true federal commitment, clean energy technologies will not reach their full potential.   According to the UN Environment Program, investments in renewable energy technologies in 2008 increased by 2 percent in Europe to $49.7 billion, decreased in North America by 8 percent to $30.1 billion, and grew by 27 percent in developing countries to $36.6 billion. Specifically, investments in China grew by 18 percent to $15.6 billion and in India by 12 percent to $4.1 billion.   

Members of the business community also stressed how important federal regulation is in creating price certainty for carbon, which would increase clean technology investments domestically and therefore clean energy jobs. J. Stephan Dolezalek, Managing Director of VantagePoint Venture Partners, testified “a growing number of the Fortune 500 community has signaled that establishing a price certainty with respect to carbon is far better for business than a continued uncertainty in the face of certainty elsewhere in the globe.”  As the percentage of global capital invested in clean energy industries continues to increase, the United States will need price certainty to attract investment and thereby create jobs.

How does this clean economy market affect the domestic job market? The truth of the matter is that given the size of the U.S. economy, new jobs are constantly created while existing jobs are lost. Even though sentiments from both sides were reflected in the testimonies, this process will continue regardless of the specific legislation that will be passed. This is little consolation for those losing their jobs, but legislation can be written to include transitional assistance and training to adversely affected workers, as is done in both the Waxman-Markey bill passed by the House in June and the recently introduced Kerry-Boxer bill in the Senate. In the case of clean energy jobs, if the U.S. creates a favorable investment environment at home, American jobs using existing as well as new skills will be created, no matter where a given company is headquartered. The value chains for many clean energy technologies and products are extensive, and even a Chinese wind manufacturer will have to hire American workers if it wants to market turbines in the United States. Philadelphia’s mayor, the Honorable Michael Nutter, summed it up well: “These new, green collar jobs require building science, carpentry, electrical, plumbing, sales, and communications skills. These jobs include: insulators, carpenters, heating technicians, energy auditors, and educators, as well as support services, sales, and manufacturing. The good news is that these jobs are a perfect fit for Philadelphia’s workforce, and are not transferable overseas.”
 
The potential for job growth is welcome news as the U.S. economy continues to climb out of the recession. In opening statements of the final day of hearings, the Senators happily noted the Commerce Department’s announcement of the first increase in real GDP since the third quarter of 2007. Testimony on behalf of businesses and workers at the EPW hearings last week took this welcome news a step further by explaining how comprehensive climate legislation could further expand the economy and increase jobs.

At the Environment and Public Works hearing on Tuesday, both Secretary LaHood of the Department of Transportation (DOT) and Administrator Jackson of the Environmental Protection Agency (EPA) explained that emissions reductions progress is already underway in the transportation sector. Sec. LaHood stated, “We have much to do, but we are not waiting to begin taking aggressive and meaningful action.” 

While the Congress has been working towards establishing comprehensive climate legislation, the DOT, EPA, and Department of Housing and Urban Development (HUD) have been collaborating to develop Federal policies that could help create sustainable communities. The aim is to support and shape state and local land use decisions and infrastructure investments to develop livable communities where people have the option to drive less. According to the DOT, on an average day American adults travel 25 million miles in trips of a half-mile or less and almost 60 percent use motor vehicles for this travel. Walking, biking, and riding transit, regardless of the area where an American might live, are excellent alternatives. “If the presence of these alternatives promotes less driving, then that will reduce road congestion, reduce pollutants and greenhouse gases, and use land more efficiently."

On Friday EPA released its first cut assessment of the economic impacts of the Clean Energy Jobs and American Power Act of 2009 (S. 1733), the Senate‘s response to the House climate and energy bill passed in June.  Senator Boxer (D-CA), Chairman of the Environment and Public Works Committee, unveiled the analysis along with new details of the bill she is co-sponsoring with Senator Kerry (D-MA).

The bottom line: EPA anticipates that the Senate and House bills will yield very similar results in terms of overall costs, allowance prices, and emissions.   Some differences in key provisions could raise the price tag of the Senate bill by up to 1% over its House counterpart.  As for greenhouse gas (GHG) emissions, the tighter 2020 target in the Senate bill -- requiring a 20% reduction in emissions compared to 2005 levels, as opposed to 17% in the House bill -- would reduce cumulative GHG emissions through 2050 by about 1% more than the House version. 

This afternoon President Obama delivered an energizing speech to students and faculty of MIT on the need for the United States to draw on its “legacy of innovation” in transitioning to a clean energy future. We are engaged in a “peaceful competition” to develop the technologies that will drive the future global energy economy and he wants to see the U.S. emerge as the winner. The President further declared that in making the transition from fossil fuels to renewable energy, we can lead the world in “preventing the worst consequences of climate change."

After citing the ongoing efforts of his Administration on this front, including the $80 billion in the American Recovery and Reinvestment Act (a.k.a the “Stimulus Package”) for clean energy, he talked about what’s needed next – comprehensive legislation to transform our energy system.  He noted that this should include sustainable use of biofuels, safe nuclear power, and more use of renewables like wind and solar technology, all while growing the U.S economy. And he applauded Senator Kerry – also in attendance for the speech – for his work with Senator Boxer on their legislation.

The hiatus on nuclear plant construction might be about to end. Renewed interest in nuclear power has been spurred by existing government incentives, and comprehensive climate policy will provide further impetus.

So what does proposed legislation do to promote nuclear power? The energy bill passed by the Senate Energy and Natural Resources Committee (S.1462), the energy and climate bill introduced by Senators Kerry and Boxer (S.1733), and the energy and climate bill passed in the House (H.R. 2454) all include provisions to expand nuclear power generation. Most importantly, the latter two bills include a greenhouse gas cap-and-trade program. This will send a long-term price signal to drive investment in low-carbon technologies, including nuclear power, and will make the cost of electricity generated from new nuclear power lower relative to traditional fossil fuel-based generation. 

Climate action advocates got a jolt Sunday morning from an op-ed written by Senators John Kerry (D-MA) and Lindsey Graham (R-SC) in The New York Times. The op-ed sketched out an energy-climate agreement that would combine aggressive greenhouse gas (GHG) emission reductions with expanded nuclear power, more oil and gas drilling off our coasts, border taxes to protect energy-intensive, trade-exposed manufacturers from imports produced without strong environmental protections, and a price collar on GHG allowances (establishing a floor and ceiling for the cost of emission allowances). I can’t think of anybody who won’t hate at least one part of this formula – certainly we at the Pew Center would offer some important tweaks. But Kerry and Graham have posed a tough question: Are we truly ready to hammer out an all-of-the-above energy policy that meets our economic, security and climate objectives?

Before you answer, keep this in mind: there is no partisan option for passing a climate and energy bill in the Senate. In the House, where 256 out of 435 Representatives are Democrats, even when 44 voted against the Waxman-Markey bill (with 8 Republicans voting for it), it passed. In the Senate, we need 60 votes to pass a bill, there are exactly 60 Democrats, and everybody expects at least a handful of them to vote against any serious climate bill, meaning that at least that number of Republicans will have to vote for a bill in order to pass it. The good news is that the Senate has a history of real Republican leadership on the climate issue. Nine current Republican Senators have written, cosponsored, voted for, or spoken in favor of mandatory GHG reductions – for the most part through cap-and-trade, some of them ahead of their time. We know of at least five more who would engage in the crafting of a climate bill if left to their own devices. The bad news is that the mood in the Senate this year has been bitterly and famously partisan.

The Kerry-Graham op-ed is the strongest ray of bipartisan hope we’ve seen on the climate issue this year. It took real guts on the part of both Senators, and it is potentially game changing. No one is going to love all the particulars – but then no one is going to love all the particulars of any climate-energy bill that has a chance of enactment in this Congress.

Manik Roy is Vice President, Federal Government Outreach

In the House, the committee chaired by Rep. Henry Waxman (D-CA), the House Energy and Commerce Committee, has jurisdiction over most matters touched on by the climate/energy bill.  In the Senate, jurisdiction over the bill is divided between six major committees.  This makes things complicated, since Congress does most of its work in its committees.

The House committee’s membership made it an excellent crucible for producing a balanced comprehensive climate and energy bill.  Even with most committee Republicans not involved in the drafting, there was a large enough majority of Democrats (36 out of 59) to pass the American Clean Energy and Security Act on Democratic votes alone.  Moreover, committee Democrats were roughly divided between those eager to pass a bill and those more cautious, out of consideration for the bill’s possible impacts on the manufacturing or energy sectors in their districts.  This meant Rep. Waxman had to balance the bill’s economic and environmental objectives just to get it out of committee.

This is not as true with the Senate Environment and Public Works Committee (EPW), the committee largely in charge of writing the GHG cap-and-trade provisions of the bill.  The committee is not quite as regionally diverse as the House Energy and Commerce Committee.  This morning we heard that EPW Chairman Boxer plans to start holding hearings on the Kerry-Boxer bill around mid-November, presumably moving shortly thereafter to a “mark up” (the arcane term for when a committee formally amends and decides whether to pass a bill).  EPW passed a cap-and-trade bill in 2007 and is expected to do so again this year.  Even after it does so, however, it will take a few more twists and turns for the bill to win the support of 60 Senators. 

One option for doing this would be to have all six relevant committees tackle the aspects of the climate issue within their jurisdiction.  Eighty-one of the Senate’s 100 members sit on at least one of these six committees.  A robust committee process could therefore engage a much larger group of Senators than the 19 EPW members.  The Senate Energy and Natural Resources Committee (ENR) did in fact earlier this year pass a major bipartisan energy bill with provisions corresponding with many of the energy measures of the House bill.  The ENR Committee is going to continue exploring the climate issue next Wednesday with a hearing on energy and economic effects of climate change legislation.  Aside from ENR’s bill, however, it is not clear at this point whether all relevant Senate committees will be sitting formally to address the climate aspects of the bill.

Another option would be for key Senators, those especially focused on the bill’s implications for manufacturing, agriculture and energy supply, to rise up outside the committee process and engage in the specifics of the bill.  In fact, several ad hoc groups of moderate Democrats have crafted statements on the factors that would need to be addressed in a climate bill, the use of trade measures, the amount of allowance value needed to prevent carbon leakage, and the treatment of coal, setting a good precedent for their engagement.

Regardless of process by which the Senate at large is engaged, observers expect Senate Majority Leader Reid ultimately to be the one to forge the various inputs into a 60-vote bill – no doubt with major input from the President.  I will write more on this in a later post.

Manik Roy is Vice President, Federal Government Outreach

LOS ANGELES -- Sub-national leaders from over 50 countries gathered last week in Los Angeles, California as part of Governor Schwarzenegger’s 2nd annual Global Governor’s Climate Summit. Topics ranged from public health impacts of climate change to technological solutions to the role of youth leadership and education. The summit kicked off with a surprise appearance by Harrison Ford, announcing the establishment of a new collaboration convened by Conservation International called Team Earth, which will focus its first effort on global deforestation. Forests emerged as a recurring theme of the discussions here. Motivated by concern that deforestation must not be excluded from the negotiations of a climate treaty this time around, 11 governors from the U.S., Brazil, and Indonesia signed a memo addressed to their nations’ presidents, pressing for a robust deforestation policy mechanism to come out of Copenhagen.  

Leaders from across the globe also expressed growing concern about preparing their citizens to adapt to climate change. It is clear that leaders on the local level are worried about the impacts that are already being felt by their citizens and are anticipating their growing role in implementing policies to address adaptation, in addition to greenhouse gas reductions.  Some have even begun to classify jobs in climate adaptation as “green jobs” and are working to expand the number of these jobs in their jurisdictions.

Another overarching takeaway is the sense that local and regional governments embrace their important role in combating climate change, repeatedly referring to policies implemented at sub-national levels across the globe as examples for national action.