The 600-page Waxman-Markey climate change bill (officially known as the American Clean Energy and Security Act) is truly a climate change wish list. Introduced in late March, it includes funding for renewable energy and clean coal technology; a renewable portfolio standard; provisions to increase home and office energy efficiency; measures to stimulate the smart grid and alternative-fuel vehicles development; and most significantly, a cap-and-trade system.

Policy analysts knew comprehensive legislation was coming with the Obama administration, but the question was when it would drop and how much it would include. Now that the magnitude of order is known, controversy has begun to boil over every aspect of the legislation.

But these same voices who are debating each point are the same voices who influence Congress, represent every facet of American life, and will ultimately decide what climate change legislation – if anything – makes its way to President Obama’s desk.

I attended a panel discussion this morning on the Waxman-Markey bill and enjoyed a lively debate from many of these voices. Headlined by Senator Barbara Boxer’s keynote speech, the panel featured Robert Gramlich, policy director for the American Wind Energy Association; Daniel Lashof, director of the Natural Resources Defense Council climate center; Christopher Horner, senior fellow at the Competitive Enterprise Institute; Bruce Harris, director of federal government relations for sustainability issues at Wal-Mart; and Jonathan Wood, vice president of government and community affairs at the Foundation Coal Corporation.

I’ve blogged about the hurdles facing cap-and-trade before, but today’s event opened my eyes even wider to just what a difficult feat it will be to achieve. I live-Tweeted the briefing and captured much of their debate to illustrate just how wide-ranging the debate over Waxman-Markey will be for our nation. The sentiments below are as accurate as possible, and I hope you enjoy reading them as much as I enjoyed hearing them:

Senator Boxer’s keynote:

• In both magnitude and probability, climate change is an enormous problem for humanity.
• The U.S. military views global warming as the single biggest threat to national security.
• Mayors and Governors are “so far” ahead of Congress on energy efficiency and green building initiatives.
• Green energy is starting to take up the slack for the slow economy in California – businesses understand that embracing clean energy improves their bottom line.
• Her committee will form five working groups to prepare for climate change: clean coal research; emission reduction targets, timetables, and state roles; market oversight; regional issues; and offsets and allowances.

Panel discussion:

• Harris: Cap-and-trade legislation makes sense because it will invariably be instituted, and will be better if formed through Congressional action rather than regulation by EPA
• Lashof: The cap-and-trade system won’t come into effect until 2012, so it won’t negatively impact consumers during this recession because the economy should improve by then. In fact, it will shorten the recession because by creating stimulus for green technology, infrastructure, and jobs.
• Wood: Coal companies support cap-and-trade because no comprehensive national energy policy exists. The energy industry needs clear signals to move forward on reducing emissions and planning generation expansion.
• Horner: If cap-and-trade is marketed as a carbon tax, it will be dead on arrival. Congress does not have the political capital to pass such legislation.
• Wood: Waxman-Markey’s $1 billion in clean coal funding is insufficient. To truly achieve a low-carbon society three essentials need to be fully funded: energy efficiency, renewable/nuclear power, and clean coal. Clean coal gets much less funding than the other two essentials, but coal makes up 50% of U.S. power generation.
• Lashof: NRDC supports funding clean coal because the technology exists, but needs economic signals to spur implementation. They have proposed carbon sequestration performance standards for new coal plants after 2015 and financial incentives based on how much CO2 is captured on a per-ton basis.
• Wood: Clean coal faces similar technological implementation hurdles to renewable power. For instance the national electrical grid can’t handle 20% of power generation from wind energy because of its intermittent nature.
• Harris: Unless clean coal is included as part of the legislation, moderate Members of Congress from both parties and those who represent coal-producing regions won’t vote for it. Coal capture and sequestration (CCS) will be the bellweather measure for the entire legislation.
• Gramlich: Renewable power sources should get carbon emission allowances just like fossil fuel sources. AWEA agrees with the coal industry that long-term policy needs to be in place to spur the necessary generation investments .
• Harris: Obama is right that emission credits should be 100% auctioned, not given away, but the revenue allocation will be key – which constituencies will benefit from that revenue?
• Lashof: A carbon auction will generate $100 billion per year, and should be distributed in three ways: the largest share to consumers (especially low-income families) to offset increased energy prices, a secondary share to new technology research and development, and the smallest share toward helping adapt to international and domestic effects of climate change.
• Wood: To minimize spikes in energy prices and the effect upon consumers, cap-and-trade should start with free emission credit allocations and increase costs gradually.
• Lashof: Cap-and-trade has an economic advantage over a carbon tax because the system would mirror the economy: during a recession energy demand would be lower and less emissions would be created so credit prices would drop.
• Horner: Cap-and-trade hasn’t worked in Europe, and would require Soviet-style production quotes which are easily subjected to commodity gaming and market manipulation. In Europe, this has resulted in windfall profits for utilities.

April 22nd, 2009 by Silvio Marcacci | No Comments
Tags: American Clean Energy and Security Act · Cap and trade · carbon capture and sequestration · clean coal · Climate change · Climate change bill · Climate change legislation · Climate change policy · Global warming · Waxman bill · Waxman Markey