Tags: house | oks | climate | bill

House Panel Approves 'Cap and Trade' Initiative

Friday, 22 May 2009 07:55 AM

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WASHINGTON -- President Barack Obama's fight against global warming got a huge boost on Thursday when a key congressional panel embraced his plan to create a new, market-driven system for reducing greenhouse gas emissions.

The House of Representatives Energy and Commerce Committee, with a mostly partisan vote of 33-25, embraced Obama's "cap and trade" climate change initiative - one of the president's top legislative priorities this year along with healthcare reform.

Representative Henry Waxman, the committee's chairman, said the bill advanced because it had "substantial support from industry, labor and environmental groups from across the country."

Among the major U.S. companies that have endorsed a cap and trade program are Alcoa, DuPont, Caterpillar Inc and a coalition of electric power companies.

With the panel's vote, the measure moved closer to a vote in the full House, which could occur by August after other committees review and possibly refine the legislation.

Democratic supporters say they want enactment of a bill this year but the outlook in the Senate was unclear.

The White House is hoping that at least significant progress will aid efforts culminating in December in Copenhagen for a new international pact on cutting industrial emissions linked to climate change problems.

"President Obama has made it clear that he wants to go to Copenhagen as the leader and not the laggard, which we have been over the last eight years," said Representative Edward Markey, a Democrat who wrote the bill with Waxman. He was taking a swipe at former President George W. Bush, who refused to sign onto the existing Kyoto Protocol on reducing carbon emissions, saying it would be too harmful to the U.S. economy.

In a statement after the vote on the legislation, Obama said: "We are now one step closer to delivering on the promise of a new clean energy economy that will make America less dependent on foreign oil, crack down on polluters, and create millions of new jobs all across America."

LIMITS ON CARBON EMISSIONS

The roughly 1,000-page bill aims to cut U.S. greenhouse gases that contribute to global warming by 17 percent below 2005 levels by the year 2020 and 83 percent by 2050.

The legislation also requires utilities to generate 15 percent of their electricity supplies by 2020 from renewable energy sources, such as wind and solar power.

The heart of the legislation is a "cap-and-trade" system that would gradually reduce the amount of greenhouse gases from utilities, oil refineries, steelmakers and other companies by requiring them to have permits to spew their emissions.

Supporters of the bill want to use market forces to push companies to reduce their emissions. Companies that pollute above their limit would have to buy permits from less polluting companies, encouraging firms to quickly cut their emissions so they can make a profit from selling the permits that initially will mostly be issued by the government for free.

Republicans argue such a plan would further slow an ailing U.S. economy, raise energy prices for consumers and speed the exodus of manufacturers using large amounts of energy to lower-cost countries such as China and India.

Representative Joe Barton, the senior Republican on the House Energy and Commerce Committee, challenged the central notion that humans contribute to global warming and climate change and he noted the past several years of lower average temperatures.

Some environmentalists complained that the Waxman-Markey bill had become too soft on carbon reductions and alternative energy requirements. At the same time many of the groups applauded what could be the toughest bill politically doable.

Frances Beinecke, president of the Natural Resources Defense Council, said the bill would create "millions of good-paying American jobs" and was "an historic step to unleash clean energy and rein in global warming pollution."

House Republican leader John Boehner has predicted an opposite outcome and said this "national energy tax would have a particularly devastating impact on rural communities across the nation" where fuels make up a large part of agricultural and commuting costs.

During four days of committee debate, Republicans on the committee failed to win new breaks for the nuclear power industry and to kill the cap and trade program.

But they won new breaks for the agriculture, ethanol and oil industry by including government-backed loans to help finance the building of pipelines that carry renewable energy such as ethanol.

© Thomson Reuters 2009 All rights reserved

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