Climate Change/Cap and Trade

On June 26, 2009, the House of Representatives narrowly approved H.R. 2454, the American Clean Energy and Security Act of 2009.  The bill, also known as Waxman-Markey, would set a limit on greenhouse gas emissions and gradually constrict it over time.    

Under the House-passed bill, major emitters of carbon, including businesses or employers that burn fossil fuels, would have to reduce their emissions or buy allowances.  These allowances would be traded on markets similar to commodities.  While proponents feel elements of the legislation could create jobs by inducing demand for energy efficiency improvements to buildings and alternative energy generation, opponents fear that making it harder and more expensive to use domestic fuels, such as coal, to generate electricity will lead to the loss of more jobs to other countries.

Action on this issue now moves to the U.S. Senate which has not yet crafted its version of a climate change bill.  It is likely, however, that the Senate Environment and Public Works Committee will begin with a model resembling Waxman-Markey when they mark up the legislation in September.  Majority Leader Harry Reid (D-NV) is planning to bring the legislation before the full Senate in October.

Other Resources

• Text of the American Clean Energy and Security Act, H.R. 2454
• Final Vote Results for H.R. 2454
• API Energy IQ Quiz
• EEI Pie Chart for Emissions Allowances
• EEI Why Allocate Emission Allowances Graph
• EEI Why Allocate Emissions Allowances Flow Chart
• EEI Article on Technology & Reducing Emissions
• NAM ACCF Study on the Economic Impact of Waxman-Markey

Legislative Update 10/2/09
On September 30, Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA) and Senate Foreign Relations Committee Chair John Kerry (D-MA) introduced the Clean Energy Jobs and American Power Act.  The cap-and-trade legislation would reduce U.S. greenhouse gas (GHG) emissions 20 percent below 2005 levels by 2020.  That target is higher than the 17-percent reduction target in the House-passed Waxman-Markey bill.  The bill has been referred to six committees, and supporters hope all committees will complete their work before U.S. negotiators go to Copenhagen, Denmark, for international climate talks in mid-December.