The House Energy and Commerce Committee approved a climate change bill on Thursday. The vote was largely along partisan lines. The bill will now be considered by the full House of Representatives, but the approval by the Energy and Commerce Committee is a landmark step toward regulating greenhouse gas emissions. Amendments on the House floor are likely, and if approved by the House, further amendments are likely in the Senate.
At almost 1000 pages, the bill is actually much broader than a climate or cap-and-trade bill alone. It endeavors to redesign the energy policy and economy in the United States. The bill is divided into four titles: “Clean Energy,” “Energy Efficiency,” “Global Warming,” and “Transitioning.” Each title addresses a different nuance of an economy-wide energy policy. The Clean Energy title promotes renewable sources of energy at the retail electricity level through RPS. It further promotes development of and investment in carbon capture and sequestration technologies, low-carbon fuels, clean electric vehicles, the “smart grid,” and modernization of electricity transmission systems. The Energy Efficiency title targets broad sectors of the economy in which energy efficiency standards and programs will be implemented. Sectors affected include buildings, appliances, transportation, utilities, and industry. The Global Warming title is the focus of this Alert. At its core, it focuses on limiting emissions of heat-trapping pollutants. The Transitioning title aims to protect U.S. consumers and industry and also promotes green jobs during the transition to a clean energy economy. For instance, the draft creates a program to allow each state energy office to establish a State Energy and Environment Development (SEED) Fund to serve as a common repository for federal financial assistance for clean energy and energy efficiency projects.
The bill would impose a 17 percent cut of greenhouse gas emissions from the emissions that occurred in 2005. The process to accomplish this would be through a cap-and-trade system by which greenhouse gas emitters would be allowed to trade emission allowances provided by the government or to purchase greenhouse gas offsets.
Offsets are produced by sources that reduce greenhouse gas emissions where they are not legally bound to do so. The developers of these projects and those who buy and re-trade them through a secondary market can sell them to emitters to meet their emissions requirements. >As the bill has evolved, free allowances have been given to various industries such as manufacturing, coal-based electrical production, oil refineries, and various other sectors in an effort to reduce the impact on these entities and to garner votes from representatives in those states that may be affected.
The bill is very complex and may undergo further change if it makes it through the House and Senate. The outlines of a potential statute are in place and it appears to at least have a reasonable chance of coming into law.
