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Climate Legislation Good First Step;

Opportunities to Strengthen Environmental and Consumer Protections Will Come During Committee Debate

WASHINGTON - Today’s release of draft climate change legislation by House Energy and Commerce Committee Chairman Rep. Henry Waxman (D-Calif.) is a good first step toward reducing greenhouse gas emissions that cause climate change. While the measure, “American Clean Energy and Security Act of 2009,” includes many positive, important objectives – such as making it more expensive for polluters to emit carbon dioxide, requiring electric utilities to generate 25 percent of their power from renewable sources by 2025 and establishing strong energy efficiency standards – important details not yet included in the bill may undermine its goals of reducing greenhouse gas emissions by 20 percent of 2005 levels by 2020 and by 83 percent in 2050. The outcome depends on how these details are resolved in the committee and on the floor of the House.

Namely, the bill does not yet address whether legal authorizations to pollute (by obtaining credits once an emitter exceeds the capped greenhouse gas allowance) will be given free to corporations or whether they must be purchased. President Barack Obama’s budget got it right when he proposed requiring all pollution allowances to be purchased through an auction. It is crucial that windfall profits and a new right to pollute are not part of climate legislation going forward.

In addition, the legislation features a $1 billion annual pot of money for the coal industry that is not part of the federal budget (known as “off-budget”) that would be unavailable to competing, superior technologies such as wind and solar, or for efficiency investments. Section 114 of the bill would allow electric utilities – but not ratepayers – a vote to create a Carbon Storage Research Corporation, a private organization designed to collect money from families through electric rates. The money would finance carbon capture and storage demonstration projects. Five percent of the money would be used for administrative expenses. This stream of $1 billion per year would be doled out by the Carbon Storage Research Corporation only to the coal industry. No similar off-budget money is suggested to assist homeowners interested in installing solar panels or making energy-efficient improvements to their homes. Electricity ratepayers should not finance a program that discriminates against technologies such as solar and energy efficiency. On the bright side, the program doesn’t finance anti-consumer and anti-environmental approaches like nuclear power.


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While Public Citizen has serious concerns with allowing markets – chiefly Wall Street investment banks – to be in charge of setting the price of pollution in carbon markets, the draft legislation may ensure that such markets are transparent, since it requires the president to form an interagency task force on how to best regulate carbon trading markets. The task force would include representatives from the Commodity Futures Trading Commission, an agency with experience regulating complex futures markets.

The legislation also remains silent on which mechanisms will be employed to protect middle- and low-income consumers from the impact of higher energy prices caused by the cap and trade program. Shielding vulnerable populations from price increases and giving homeowners access to alternatives is crucial as families struggle to make ends meet during this severe economic crisis.

It is encouraging that lawmakers are finally tackling the real problem of climate change. Public Citizen looks forward to working with lawmakers and the public to ensure that legislation works to empower families – and not just large corporations – to play a leading role in making our future greener and more sustainable.


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