USCAP Hails Waxman-Markey Climate Discussion Draft as Strong Start
USCAP hails the discussion draft released by Chairmen Waxman and Markey as a strong starting point for enacting legislation to reduce greenhouse gas emissions. The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation’s environmental goals. It recognizes that many of these issues are tightly linked and must be dealt with simultaneously. We appreciate the thoughtful approach reflected in the draft and the priority the Chairmen are placing on this important issue.
The draft addresses most of the core issues identified by USCAP in our Blueprint for Legislative Action and reflects many of our policy recommendations. Any climate program must promote private sector investment in vital low-carbon technologies that will create new jobs and provide a foundation for economic recovery. Legislation must also protect consumers, vulnerable communities and businesses while ensuring economic sustainability and environmental effectiveness.
As we understand it, the draft includes important recommendations outlined in the Blueprint:
- The draft reflects an economy-wide approach to reducing greenhouse gas emissions that includes as many sectors as possible under the cap.
- The draft would establish targets and timetables that are ambitious and within the range recommended by USCAP in the early years.
- The draft recognizes the critical role of cost containment, including the importance of offsets, unlimited banking of allowances, multi-year compliance periods and the need for a strategic reserve pool.
- The draft incorporates the USCAP recommendations to address financial and regulatory barriers to carbon capture and storage deployment, including financial incentives and emissions standards.
However, one essential area that has not been addressed in the discussion draft is the important topic of allowance allocation. This is an issue of vital concern for the economy and USCAP members.
USCAP has stated that the distribution of allowance value should facilitate a transition period toward a low-carbon future. This critical phase must protect consumers and businesses; provide capital to support new low and zero-GHG-emitting technologies; and address the need for humans and the environment to adapt to climate change. USCAP recommends that a significant portion of allowances be initially distributed free to entities covered by the cap in order to mitigate costs to consumers and particularly vulnerable sectors of the economy. This free distribution should then be phased out over time.
As Chairmen Waxman and Markey recognized in a recent letter to President Obama on the need for climate legislation, the objectives included in any bill must be based on sound “…overall program design and the allocation of tradable emission allowances.” USCAP agrees that the resolution of this issue is central to enacting viable climate legislation.
There are other aspects of the draft that also appear to differ from our recommendations. For example, while the draft recognizes the importance of using offsets to reduce the overall economic impact of the program, it appears to limit the use of offsets below the levels outlined in the Blueprint.
USCAP knows firsthand the challenge of carefully balancing the many linked issues that any effective climate strategy must address. But we also know that this challenge can be met. We look forward to working with the Chairmen and other members of the Energy and Commerce Committee to achieve our shared goals.
More information about the Blueprint for Legislative Action and USCAP can be found at www.us-cap.org
United States Climate Action Partnership (USCAP) is a group of businesses and leading environmental organizations that have come together to call on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions.
- Alcoa – Boston Scientific – BP America – Caterpillar – Chrysler – ConocoPhillips – John Deere – Dow – Duke Energy – DuPont – Environmental Defense Fund – Exelon – Ford – FPL Group – GE – GM – Johnson & Johnson – Marsh – Natural Resources Defense Council – The Nature Conservancy – NRG Energy – PepsiCo – Pew Center on Global Climate Change – PG&E – PNM Resources – Rio Tinto – Shell – Siemens – World Resources Institute – Xerox -
SOURCE U.S. Climate Action Partnership