Dec. 11, 2009
New Senate Climate Change Bill Is Superior Starting Point
Statement of Tyson Slocum, Director, Public Citizen’s Energy Program
Today’s introduction of the bipartisan CLEAR (Carbon Limits and Energy for America’s Renewal) Act by Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) offers a needed new direction in America’s debate on addressing climate change. While the legislation is far from perfect, it offers a superior starting point than competing bills that passed the House of Representatives and the Senate Environment & Public Works Committee, and the proposed legislative framework offered by Lieberman-Kerry-Graham. Importantly, the legislation echoes President Obama’s call, made most recently in his mid-session budget submitted to Congress in August, that polluters should pay through a 100 percent auction of emission allowances. This is in stark contrast to competing proposals, which give away nearly all such allowances for free. Additionally, the CLEAR Act would significantly limit the creation and operation of a secondary derivative trading market, thereby curtailing the ability of Wall Street to profit and speculate.
Public Citizen understands that auctioning 100 percent of pollution allowances – rather than giving them away for free – and keeping Wall Street speculators out of carbon markets is the strongest path forward to hold polluters accountable, protect households and preserve the integrity of the emissions cap. The Environmental Protection Agency has stated that 100 percent auctioning will have the greatest ability of cap-and-trade methods to protect vulnerable populations like the poor. We also understand that markets are needed to finance the research and deployment of clean technologies – and not to promote a trillion-dollar carbon gambling market. Solving climate change is simply too important to entrust to traders at Goldman Sachs and JP Morgan Chase.
But while the legislation gets these two critical pieces right, work is needed to strengthen the bill. The legislation’s short term emission reduction target – 20 percent reduction in emissions by 2020 – is not strong enough to curtail emissions in line with what the science tells us is needed. The Clean Energy Reinvestment Trust Fund, which receives 25 percent of the auction revenue, does not limit investments into proven boondoggles like nuclear power or “clean coal” and allows too many non-renewable energy sources – such as the use of domestic agricultural offsets – to qualify as “clean energy.” And the legislation provides explicit, generous incentives for carbon capture and storage without corresponding initiatives to encourage small-scale, locally owned renewable energy like rooftop solar. Public Citizen will work with lawmakers to strengthen this bill.