A governor runs off to Argentina,
Michael Jackson and
Farrah Fawcett
die. There have been many major happenings this week, but we can't lose
sight of an important vote on a cap-and-trade program aimed at reducing
greenhouse gas emissions.
The bill, which will be brought to the floor on Friday, is called
the American Clean Energy and Security Act of 2009.
It's the centerpiece of President Barack Obama's first-year energy plan
and entails reducing greenhouse gas emissions 17 percent by 2020.
The bill, as described by the House Energy Committee, will: [PDF]
"Require
electric utilities to meet 20 percent of their electricity demand
through renewable energy sources and energy efficiency by 2020.
"Invest in new clean energy technologies and energy efficiency, including energy efficiency and
renewable
energy ($90 billion in new investments by 2025), carbon capture and
sequestration ($60 billion), electric and other advanced technology
vehicles ($20 billion), and basic scientific
research and development ($20 billion).
"Mandate new energy-saving standards for buildings and appliances, and promote energy
efficiency in industry.
"Reduce carbon emissions from major U.S. sources by 17 percent by 2020 and over 80% by 2050
compared to 2005 levels. Complementary measures in the legislation, such as investments in
preventing tropical deforestation, will achieve significant additional reductions in carbon
emissions."
There's
more. The bill includes incentives to make your home and business more
energy efficient and provides grants for so-called "green jobs." It's
expected to narrowly pass the House on Friday, but faces much tougher
times in the Senate.
The New York Times used the phrase "lobbying frenzy" to describe the pressure Congress is facing over this vote:
"'We
believe this is one of the most important votes of our time,' wrote the
Sierra Club, Natural Resources Defense Council, National Wildlife
Federation, League of Conservation Voters and other groups. "There are
rare moments in American history when the urgency to act is clear, the
stakes are high, the costs of inaction are untenable, and the need for
courageous leadership is paramount. Now is one of those moments."
Thursday, 20 U.S. companies and electric utilities published full-page ads [PDF] in several Washington newspapers calling for the bill's passage.
"We
support this legislation because certainty and clear rules of the road
enable us to plan, build, innovate and expand our businesses," says the
ad from Duke Energy Corp., eBay Inc., National Grid PLC, Nike Inc., NRG
Energy Inc., PSEG Inc. and Starbucks Corp."
But opponents say:
"Originally,
the Clean Energy and Security Act was designed to tax energy in order
to reduce greenhouse gas emissions thought to cause so-called global
warming, but Democrats on the Agriculture Committee negotiated
pro-ethanol provisions into the legislation, which made a bad bill
worse. By forcing Americans to use ever more corn-fuel in their gas
tanks, the Congress raises grocery bills (by increasing the price of
food) and gives drivers more pain at the pump (ethanol is more
expensive that gas). So now Americans face the prospect of an energy
tax for so-called global warming, plus an ethanol tax on food and fuel,
all in the same bill.
"The bill is
likely to become even more harmful when the Ways and Means Committee
weighs in. The members of that influential Committee want to add
language that would force the President to impose carbon tariffs on
imports from developing countries such as China and India. They would
undoubtedly retaliate with tariffs on imports from American
manufacturers. History informs us that a trade war would inflict severe
damage on a global economy that is already ailing."
Here are some additional resources, all of which are in PDF format:
What is cap and trade?The U.S. Environmental Protection Agency has put it in perspective:
"Cap
and trade is an environmental policy tool that delivers results with a
mandatory cap on emissions while providing sources flexibility in how
they comply. Successful cap and trade programs reward innovation,
efficiency, and early action and provide strict environmental
accountability without inhibiting economic growth."
How would this work?
Let's
say you own a coal-based power plant. You would get a permit from the
federal government that would allow you to emit a certain amount of
pollutants. You can either emit those pollutants or, if you have found
ways to pollute less, you can sell your permit to somebody else.
Starting in 2014, the program would expand beyond power plants to
industrial facilities that burn fossil fuels. In 2016 it would expand
to natural gas distributors.
The Congressional Budget Office said
[PDF] that "according to CBO's estimates, the programs would cover
about 72 percent of U.S. emissions of GHGs (Greenhouse Gases) in 2012,
about 78 percent in 2015, and about 86 percent in 2020."
Who will pay for this?
You will. The Congressional Budget Office has said that the legislation will cost the wealthiest U.S. households $245 a year, and will result in $40 in yearly gains for the poorest households.
Opponents say working families will pay the most
because a larger percentage of their incomes goes toward buying
gasoline for a family car or toward heating their homes. There seems to
be little doubt that heating bills would be higher because local
utility companies are going to have to spend more to get greener.
Some regions will get hit harder than others. The Wall Street Journal ran an editorial saying:
"But
the greatest inequities are geographic and would be imposed on the
parts of the U.S. that rely most on manufacturing or fossil fuels --
particularly coal, which generates most power in the Midwest, Southern
and Plains states. It's no coincidence that the liberals most invested
in cap and trade -- Barbara Boxer, Henry Waxman, Ed Markey -- come from
California or the Northeast.
"Coal
provides more than half of U.S. electricity, and 25 states get more
than 50 percent of their electricity from conventional coal-fired
generation. In Ohio, it totals 86 percent, according to the Energy
Information Administration. Ratepayers in Indiana (94 percent),
Missouri (85 percent), New Mexico (80 percent), Pennsylvania (56
percent), West Virginia (98 percent) and Wyoming (95 percent) are going
to get soaked."
The cash for clunkers idea
The bill includes a provision to encourage people who are driving clunkers or gas hogs to buy something more efficient:
"The
bill would authorize a program within DOT that would provide vouchers
for the purchase or lease of a new car or truck to individuals who
trade in an eligible vehicle for one that is more fuel efficient. The
bill defines an eligible vehicle as one that averages
18-miles-per-gallon or less and would set minimum fuel-economy
requirements for vehicles purchased or leased with a voucher. The
eligible vehicle would have to be subsequently dismantled.
"The
vouchers would range in value from $3,500 to $4,500 depending on the
characteristics of both the old and the new vehicles. CBO estimates
that this provision would accelerate the rate at which some older, less
fuel-efficient vehicles are replaced, and cause the fleet of new
vehicles purchased under the program to be more fuel efficient than it
would otherwise be. As a result, fewer taxes would be collected on the
sale of fuel, reducing federal revenues."
Has this been tried before?
Yes, it has. Examples of cap-and-trade programs include the nationwide Acid Rain Program and the regional NOx Budget Trading Program.
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