Capitol Hotline (Apr. 6)

USCAN Capitol Hotline
April 6, 2009

In this issue

• Hot Topic of the Week
• Waxman and Markey Release Draft Climate Legislation in House
• Inside the Beltway
• House, Senate Approve Budget Resolutions; 'Will Spur Clean Energy Economy' Says Obama
• International Affairs Funding Restored to FY 2010 Budget
• Van Hollen Introduces Cap and Dividend Legislation
• Outside the Beltway
• G20 Commits to Green Recovery
• President Obama Promises Leadership on Climate at EU-US Summit
• Negotiations in Bonn Continue; Developing Nations Call for Ambitious 2020 Targets
• European Union Carbon Trading System Working, Power Utilities Switching to Natural Gas
• Capitol Hill Events
• Other Headlines

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Hot Topic of the Week

Waxman and Markey Release Draft Climate Legislation in House

Last Tuesday, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and House Energy and Environment Subcommittee Chairman Ed Markey (D-MA) released a discussion draft of their energy and climate bill, "The American Clean Energy and Security Act."  The draft legislation would establish a cap-and-trade program requiring major sources of US greenhouse gases, such as utilities, cement makers and auto manufacturers, to reduce their emissions 20 percent below 2005 levels by 2020 (7% below 1990 levels), by 42 percent by 2030 (32% below 1990 levels), and by 83 percent by 2050 (80% below 1990 levels). The draft also would establish a national renewable electricity standard that reaches 25 percent by 2025, energy efficiency programs, a $1 billion annual fund to accelerate commercial-scale carbon capture and storage (CCS) and low-carbon fuel standards. To achieve additional reductions five percent of emissions allowances would go to help developing countries reduce emissions from deforestation.  The draft also allows up to 2 billion tons of emission reductions through international and domestic offsets each year.

The White House and House Majority Leader Nancy Pelosi (D-CA) offered their support of the 648-page draft climate bill. Pelosi said her goal was to have the bill passed within six months, with or without bipartisan support. Senate Majority Whip Dick Durban (D-IL) said that the Senate doesn't have the 60 votes to beat a filibuster yet, but wouldn't speculate on how many more votes are necessary. Senator Boxer (D-CA) said that the Senate may move energy legislation while waiting to introduce cap-and-trade until conference negotiations with the House, but would not rule out pushing a climate bill through the Senate Environment and Public Works committee.

Waxman told reporters that he based the energy and climate bill closely on the "Blueprint for Legislative Action" proposal advocated by the U.S. Climate Action Partnership, a coalition of environmental and business groups.  However, the Waxman-Markey draft includes strict low-carbon fuel requirements that the USCAP proposal did not include and higher renewable energy standards. The USCAP proposal also called for some sectors to receive carbon allowances at no cost initially, something that was not clarified in the draft. "I just think it makes more sense to have more member discussion on allowances," said Waxman.

Following Easter recess, the draft will go to Chairman Waxman's House Energy and Commerce Committee, where they will discuss how permits will be allocated and how revenues will be spent. Read more at E&E (sub'd req.)

Browse related USCAN member press releases at the USCAN website.

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Inside the Beltway

House, Senate Approve Budget Resolutions; 'Will Spur Clean Energy Economy' Says Obama

The House and Senate approved a $3.5 trillion budget for FY 2010 last Thursday, which will allow President Obama to begin work on a number of his goals, including implementing a cap-and-trade system to reduce global warming. The resolution is "another step to rebuilding our struggling economy," said President Obama, which embraces "an energy plan that will end our dependence on foreign oil and spur a new clean energy economy."

Climate and energy were the focus among the dozens of Senate amendments put before a vote late Thursday evening. Among them, the Senate approved an amendment from Senator John Thune (R-SD) that requires the deficit-neutral reserve fund for climate change legislation to not increase electricity or gasoline prices. Another approved amendment by Senator Kit Bond (R-MO) creates a point of order against climate or energy legislation if it could lead to job loss in manufacturing or coal-dependent regions, and an amendment by Senator Debbie Stabenow (D-MI) was passed that calls for climate legislation to "strengthen manufacturing competitiveness" in the U.S. and protect consumers, among other provisions.  The Senate also approved a measure which would make it difficult to add climate language to budget reconciliation in conference. The House approved its budget plan without amendment.

The additions by the Senate and slight differences on discretionary spending levels will be resolved in a budget conference report that will be developed after a two-week recess that began today. Read more at E&E (sub'd req.)

International Affairs Funding Restored to FY 2010 Budget

The Senate unanimously approved the Kerry-Lugar amendment to the FY 2010 budget, restoring a $4 billion cut to the International Affairs Budget. The amendment brings the funding level to what President Obama had requested but had been decreased last week by the Senate Budget Committee. Before the floor vote on the amendment, Senator John Kerry (D-MA) emphasized the importance of having international funding available to meet the United State's commitments at the UN negotiations. "Negotiators are meeting for an interim session this week in Bonn, and it is essential that we send a clear signal that the United States Congress is serious about financing to support the commitments the Obama Administration makes on the world stage," said Kerry. Read more at Boston Globe

Van Hollen Introduces Cap and Dividend Legislation

Representative Christopher Van Hollen (D-MD) introduced the Cap and Dividend Act of 2009 last week. The proposal calls for a cap on carbon that would reduce emissions 25 percent from 2005 levels by 2020, a 5 percent higher short-term target than the Waxman-Markey draft released last week. Long-term targets for both bills largely match up. Van Hollen's proposal would auction all pollution permits and 100 percent of proceeds would be distributed to legal US residents. "The science of climate change can be complicated, but the legislative solution doesn't have to be," said Van Hollen in a statement. "The strength of cap and dividend lies in its simplicity and durability." During a telephone chat, Van Hollen underscored the commonalities between his and other climate proposals: "the overriding objective here is to reduce carbon emissions and move us towards a clean economy," he said. "There are lots of ways to get there." Read more at E&E (sub. req'd)

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Outside the Beltway

G20 Commits to Green Recovery

In his first presidential trip on the world stage, President Obama met with other heads of state at the G20 Financial Summit in London last week. The leaders agreed to a communiqué articulating six core commitments of economic recovery, including the goal of building a "resilient, sustainable and green recovery" and accelerating "the transition to a green economy." The G20 also committed $1 trillion to support developing countries through the International Monetary Fund (IMF) and the World Bank. UN Secretary-General Ban Ki-Moon praised the funding and said he was encouraged that the leaders recognized the links between having to address economic turmoil, food security and climate change.

President Obama and President Hu Jintao of China met for the first time at the summit. Both sides agreed on a range of diplomatic initiatives, including intensifying dialogue and cooperation on climate change, renewable energy and energy efficiency. They also said they would work with other parties to achieve positive results in Copenhagen. Last week, the White House announced that President Obama would visit China later this year as well as meet with President Dmitri Medvedev in Russia in July. Read more at Boston Globe

President Obama Promises Leadership on Climate at EU-US Summit

President Obama committed the United States to take a leading role in combating climate change during his speech at the EU-US Summit on Sunday. "Together, we must confront climate change by ending the world's dependence on fossil fuels, by tapping the power of new sources of energy like the wind and sun, and calling upon all nations to do their part... And I pledge to you that on this global effort, the United States is now ready to lead," Obama said. Jose Manuel Barroso, the head of the European Commission, said he welcomed the "increased convergence between the European and U.S. position" on climate change. Last month, President Obama invited 16 "major economies" to an upcoming forum on climate change to ensure an U.N. agreement is reached this December in Copenhagen. Read more at Reuters

Negotiations in Bonn Continue; Developing Nations Call for Ambitious 2020 Targets

The U.N. intercessional meeting in Bonn, Germany will conclude this Wednesday. Negotiating parties from across the world are meeting to develop an international climate treaty to succeed the Kyoto Protocol which expires in 2012. The myriad topics being debated include establishing greenhouse gas reduction targets for developed countries, assistance to poor nations to adapt to the effects of climate change and transferring technology to developing countries to drive low-carbon growth.

China and India joined other developing countries in urging developed countries to cut emissions by 40 percent of 1990 levels by 2020 - with an alliance of island states calling for 45 percent reductions. Jonathan Pershing, the U.S. deputy special envoy for climate change, said that the U.S. must not offer more that what can be delivered by 2020. "It is not the point in time in 2020 that matters - it is a long-term trajectory against which the science measures cumulative emissions," said Pershing. Read more at BBC. Learn more about the Bonn intercessional at the USCAN website.

European Union Carbon Trading System Working, Power Utilities Switching to Natural Gas

Emissions among industries covered by the EU carbon trading system have declined 4 to 6 percent during 2008, compared to roughly 1 percent each of the two previous years. While some of the reduction is attributed to the economic slump, analysts say a portion of the decline is a result of the carbon trading system. Henrik Hasselknippe, the global head of carbon analysis at Point Carbon, said that a significant number of power utilities have switched to relatively cleaner natural gas in 2008 because higher carbon prices have increased the costs of coal. Read more at New York Times

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Capitol Hill Events

• Apr. 7-8:  2009 Energy Conference - A New Climate for Energy (EIA)
• Apr. 8:  The Informational Challenges of a Changing Climate (CSIS)
• Apr. 8:  Nuclear Waste Management (Johns Hopkins Univ.)
• Apr. 9:  Seminar on Green Process Design (NREL)
• Apr. 9:  Wood-Based Bioenergy - Implications for Forest Sustainability (EESI)
• Apr. 9:  Musings on Race and the Environment (Resources for the Future)
• Apr. 10:  Green Growth - Are Feed-in Tariffs the Answer? (New America Foundation)
• Apr. 10:  The Role of Independent Nuclear Regulators in a Carbon-Constrained Economy (Johns Hopkins Univ.)

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Other Headlines

• Investment In Clean Energy Drops 53% To Start The Year
• Airlines call on UN to impose carbon caps
• Study finds ice-free Arctic possible within 30 years
• Oregon in running for Norwegian car plant
• Groups debate Supreme Court's power plant ruling
• Who Will Profit from Climate Change?