House Energy and Commerce Committee approves cap-and-trade legislation; 25x'25 weighs in

By Erin Voegele | May 04, 2009
Report posted May 27, 2009, at 5:50 p.m. CST

On May 21 the House Energy and Commerce Committee approved the American Clean Energy and Security Act, H.R. 2454, by a vote of 33 to 25. The legislation aims to create clean energy jobs, save consumers hundreds of billions of dollars in energy costs, enhance America's energy independence and cut global warming pollution.

The bill contains four titles designed to meet these goals:
  • • A clean energy title that promotes renewable sources of energy, carbon capture and sequestration technologies, clean electric vehicles, and the smart grid and electricity transmission.

  • • An energy efficiency title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation and industry.

  • • A global warming title that places limits on emission of heat-trapping pollutants. This legislation would cut global warming pollution by 17 percent compared to 2005 levels in 2020, by 42 percent in 2030, and by 83 percent in 2050.

  • • A title that protects U.S. consumers and industry and promotes green jobs during the transition to a clean energy economy.

  • 25x'25, an organization that seeks to produce 25 percent of our nation's energy from renewable resources by 2025, recently held a webinar featuring an overview of H.R. 2454 as well as an assessment of alterations its members would like to see included in the final draft of the bill. The webinar focused primarily on the carbon cap-and-trade components of the bill and how those components may affect those in the agricultural and forestry industries.

    According to 25x'25 carbon advisor Jeffery Frost, although a carbon cap-and-trade program will result in costs for all sectors of the U.S. economy, it will also offer opportunities to those in the agricultural and forestry industries. Under H.R. 2454 emissions from the agricultural and forestry industries would not be capped. However, those industries could realize significant revenue potential through the generation of carbon offsets that could be sold to regulated parties.

    "We are perhaps the only sector that might actually have net benefits as a sector," Frost said. "We do have the voluntary participation in the offset market. So, the good news is that only the portions of our sector that can actually deliver offsets need to voluntarily engage in that behavior. Remember we are all subject to the costs whether we are capped or not, but the beneficial side is an option on our part."

    However, there are many areas in which 25x'25 would like to see the legislation altered. According to Frost, those areas include how early adopters are treated by the legislation, the role of the USDA in the cap-and-trade program and biological sequestration offset rules.

    "We find that [the legislation] is greatly underspecified when it comes to the details of offsets," he said. "We're of the opinion we need to fuller specify in the legislative language itself to ensure that we get the kind of outcomes we need that will serve both persons that provide the sequestration offsets and those persons buying the sequestration offsets, i.e., the capped sectors."

    Now that the legislation has been approved by the House Energy and Commerce Committee, eight other House committees are expected to address the bill, including the House Agriculture Committee. "It appears that for the most part these committees will make short order of advancing the bill," said Ernie Shea, 25x'35 project coordinator. "We're not expecting much in the way of changes from the bulk of these committees, with the one exception of the House Agriculture Committee. At this point the chairman of the committee, Collin Peterson, has been signaling that his committee is very concerned about a number of the fundamental components of this…climate change bill."

    According to Shea, some of those eight committees are expected to hold hearings on the legislation, while House leaders have signaled they would like to pass the bill before the August recess. "The bottom line is that I don't think anyone has a very clear sense of when the bill is going to emerge or what it is going to look like," Shea said. Lawmakers in the U.S. Senate aren't expected to address the legislation until next year.

    "25x'25 is working very closely with our partners as well as with some of these committees that will be further exploring the legislation to raise up the issues…where we see weakness, where we see deficiencies or lack of specificity," Shea continued. "We're trying to put those issues in front of policy makers so they have an opportunity to make adjustments going forward."