June 27, 2009

Climate Change Bill Must Be Strengthened

Public Citizen Statement

Climate change legislation that narrowly passed the House of Representatives late Friday must be strengthened. The legislation will not solve our climate crisis but will enrich already powerful oil, coal and nuclear power companies.

President Obama got it right when he announced in February his plan to impose strict new limits on greenhouse gas emissions and require polluters to pay. But HR 2454 enshrines a new legal right to pollute and gives away 85 percent of the credits to that right to polluters.

The Senate should do the following:

1. Listen to the scientists, not the lobbyists, and cut global warming emissions by 80 percent below 1990 levels by 2050.

2. Require polluters to pay for emissions credits - don't hand them out for free, thereby providing financial windfalls to coal and oil power plant owners. The nuclear utility Exelon bragged this week to investors that the climate bill will provide it $1 billion in extra profit per year. In addition, giving away allowances deprives the government of money needed to invest in clean technologies.

3. Don't rely on Wall Street to get climate change right. Under the bill, the price of pollution would be determined by a trillion-dollar derivatives market that could be similar to the one that helped sink our economy into its current depressed state.

4. Boost the amount of renewable energy utilities must use. The first draft of the bill would have required utilities to produce 25 percent of their power from renewable energy by 2025; that figure has shrunk to 20 percent, and additional loopholes prompted the American Wind Energy Association to conclude that the renewable standard will result in "effectively zero" new renewables.

5. Remove the "carbon tax" that households would have to pay. This pot of money would be controlled by the utilities and used to fund only carbon capture projects by coal utilities. The bill doesn't, but should, provide money to help homeowners pay for such as things as weatherization or to receive rebates for rooftop solar.

6. Protect consumers - not utility profits. The legislation's primary "consumer protection" provision distributes free pollution allowances to electric and natural gas utilities with the assumption that the 50 different state utility commissions will redirect all that money back to consumers. But there's a reason corporate utilities have called this provision "critical": they understand that they will be able to direct a portion of that money to their shareholders instead. Public Citizen supports directing money directly to households as President Obama proposed earlier this year.