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Climate Change Bill a Disappointment; Industry Should Not Dictate U.S. Environmental Policy

May 22, 2009

Climate Change Bill a Disappointment; Industry Should Not Dictate U.S. Environmental Policy

Statement of Tyson Slocum, Director of the  Energy Program at Public Citizen

As expected, the House Energy and Commerce Committee approved climate change legislation last night and sent it along in the legislative process. We strongly urge lawmakers to make major overhauls to this bill or go back to the original climate principles that Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) distributed last year and which 131 other members of the Democratic caucus signed on to. The problem? Oil, coal and nuclear industries had far too much say in the bill’s shaping, and it shows. Those who say this measure is the best the legislative process can produce are wrong: The American people demanded strong climate legislation, and polluters are subverting these goals. 

Here’s what needs to be revisited:

  • Rather than auction pollution allowances, the bill calls for giving away 85 percent of the pollution allowances for free for the next two decades and allowing polluters access to a billion offsets annually, which will encourage them to continue polluting. As we have seen in Europe, when the right to pollute is given to energy companies – particularly unregulated power generators, as this bill calls for – and offsets are not adequately verified, nations fail to meet their emissions caps, so the goal of curbing greenhouse gas emissions is thwarted. In addition, giving away allowances deprives the government of money needed to invest in clean technologies.
  • 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 is current depressed state.
  • The federal renewable energy mandate contemplated in 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.
  • Households are asked to pay a new “carbon tax” that is controlled by the utilities to fund only carbon capture projects by coal utilities, without corresponding investments for homeowners for such as things as weatherization or rebates for rooftop solar.
  • The committee’s plan to distribute allowances to coal utilities will set up a legal fight in all 50 states’ utility regulatory commissions on how the money will be returned to families and how much utilities can skim off the top – a fight that anti-poverty and consumer groups lack adequate resources to wage, given the army of lawyers utilities hire and the millions in campaign contributions they make. Without provisions to provide intervener funding    – a process by which utilities help finance the legal and technical costs borne by consumer groups in the utility regulatory process   –  ratepayers will not receive the full rebates to which they are entitled. In many deregulated electricity markets, such as those in our largest states like California and Texas, the process will be even more difficult, as these deregulated electric providers will undoubtedly repeat the mistakes made in Europe.

Big money was the deciding factor in this process, with the energy industry donating a total of $3.1 million on all members of the Energy and Commerce Committee in the 2008 campaign cycle.

The bill approved by the committee is hardly the transformation this country needs.