During the past week, the House Energy and Commerce Committee held hearings on the draft legislation of ‘American Clean Energy and Security Act 2009’. Over 60 witnesses testified, including Energy Secretary Steven Chu, former House Speaker Newt Gingrich and Nobel laureate Al Gore, as well as representatives of environmental groups, electricity producers, auto manufacturers and renewable energy companies.
Prior to the hearings, Rep. Henry Waxman, chairman of the Committee and co-sponsor of the bill, promised that he will stick to his proposed 20% reduction in GHGs emissions in the next decade and that it was Congress, rather than the EPA who should determine how to regulate these emissions (referring to the EPA’s endangerment finding released on the previous Friday).
Here is a brief description of the proceedings and some of the highlights.
The first day consisted of opening statements only, but the action surrounding the hearings kick-started with a letter from the 23 Republican members of the House Energy and Commerce Committee to the Committee’s Democratic leaders saying that the draft bill is not ready to be discussed, as a major element – how the permits will be distributed – is missing. They also called for a hearing dedicated to the EPA’s recent endangerment finding.
This was seen more as a delaying tactic, as Edward Markey, the other co-sponsor of the bill, said in the opening session – “The time for delay, denial and inaction has come to an end”.
In the second day the committee heard from representatives of the administration (Secretary Chu, EPA Administrator Lisa Jackson and Transportation Secretary Ray LaHood), the United States Climate Action Partnership (USCAP) and others, such as the CEO of American Wind Energy Association, President of the Union of Concerned Scientists and a Senior Economist from the Stockholm Environment Institute.
The administration’s representatives responded to the concerns of Republicans as well as some Democrats and explained that the benefits of a cap-and-trade system will outweigh the costs, stressing that such a bill will create jobs and a stable investment environment, as well as ultimately reducing costs to consumers. Both Chu and Jackson though said they are still studying the details of the draft bill and that the administration had not given its blessings to it.
Secretary LaHood, in response to a question from Democrat John Dingell, assured the committee that the administration is committed to helping the automobile industry.
Companies belonging to USCAP generally stated their support of a cap-and-trade system. For example the representative from Alcoa, an aluminium producer, mentioned that increasing energy efficiency has already helped them reduce costs, and that aluminium is expected to be used in future energy efficient vehicles and buildings. However, both she and others (Duke Energy and NRG Energy, to name two) said they will drop their support for the bill if they did get free permits.
Day three saw testimonies from utility companies, think tanks and research institutions, consumer organisations, renewable energy companies and more. The panels dealt with issues of allocation policies, ensuring US competitiveness and the more technical issues of low-carbon electricity, CCS, renewables and grid-modernization.
The utility companies stressed that they will need time to adapt and urged a gradual transition to a full auction system, also requesting allocation of free permits at first. It is encouraging to note though, that the American Public Power Association, which represents more than 2,000 community-owned electric utilities, supports auctioning no more than 5 percent of total allowances from the onset of the programme.
In response to that and to opposition from Republican members of the committee, as well as concerns raised by Democrats, Markey told reporters that “There are going to be some free allocations of allowances.”
Advocates of renewable energy called on Congress to set a renewable-energy standard requiring all states to get part of their energy from renewable sources.
The main focus of the day was on the “star” witnesses – former vice-president Al Gore, former Republican Senator John Warner, and Former House Speaker Newt Gingrich, which was apparently added by the Republicans as a last minute addition to balance out Gore and Warner’s favourable testimonies.
Former Sen. Warner was one of the few Republicans in the last Congress who supported strong action on climate change (and joined with Dem. Joe Leiberman in a bipartisan attempt to pass a climate change bill). He attacked the “clean coal” mantra, saying that “we know clean coal is not around the corner” and argued that climate change is a national security issue which must be addressed.
There were no surprises in Al Gore’s testimony, who equated the bill under discussion to the civil rights legislation of the 1960s and the Marshal Plan of the 1940s. He urged the House panel to make sure the bill includes provisions to protect people who would face hardships as a result of the expected changes. In response to Rep. Dingell’s concern that US jobs will suffer after all, as countries such as China won’t face the same burdens, Gore drew on his experience with the international negotiations when he said that “If the United States leads, China will follow”.
The bill will have to go through other House panels, but Waxman planned a tight schedule and hopes to have it ready for discussion in front of the full House by Memorial Day (May 25).
In the meantime, there are apparently negotiations going on behind the scenes to find a compromise that will build a winning coalition in favour of the bill.