With compromises being made as late as early Friday June 26th, the Waxman-Markey Bill on Energy & Climate Change (the so called “Cap & Trade” Bill) passed the U.S. House Friday by a 219/212 margin.
The bill, having been released from the House Energy & Commerce Committee on May 21, 2009, grew over 400 pages during House debates and is now over 1300 pages in length. The Bill will likely undergo more growth during its time in the Senate.
As mentioned in prior posts, the Bill seeks essentially to cap emissions and auction permits which give parties the right to pollute.
Most permits are pre-allocated through 2015, meaning that many businesses will not have to purchase carbon permits at the outside. According to a Table prepared by the New York Times on June 27, 2009, roughly 80% of the 5 billion permits will be allocated in 2010 as follows:
-37% to Public utilities, who are required to sell these permits and use the revenue to keep consumer energy costs low.
-21% to Private Industry.
-16% to recipients who will use the permit value to finance renewable energy projects.
-9% to other public uses.
By 2035, the number of permits will shrink to 2.9 billion, and 80% of those will be auctioned.
Claimed supporters include Dow Chemical and Ford.
Although the Bill was a Democratic bill, 44 House Dems did not vote for the bill. The main critiques are that the bill (1) is a tax, (2) will result in more outsourcing of jobs, and (3) is premature given there is no international agreement limiting greenhouse gas emissions. Supporters disagree with all those contentions as follows:
(1) Is the Bill a Tax? Democrats and Republicans strongly disagree on this issue. Democrats claim the Congressional Budget Office determined the average consumer will only see a $175 increase in their energy costs by 2020, and that poorest familys would receive rebates to reduce their energy bills. Numbers put out by the Heritage Group suggest 15x that amount. It is still unclear what accounts for this vast difference in these economic projections, as we have not yet seen the details behind these projections. Many great economists, however, agree that consumers will ultimately bear the brunt of this legislation, and even the EPA has made some negative comments regarding the efficacy of this large and complicated piece of government regulation.
(2) Will the bill cause jobs to migrate overseas? Jobs are and have been migrating overseas for some time. While EPR Policywatch has seen this contention made with respect to the Cap & Trade Bill, we do not yet know whether this is an extension of prior trends. EPR Policywatch will monitor the debate in the Senate for more thoughts on this topic.
(3) Should passage of the Bill await an international consensus on emission caps? Sen. Charles Grassley (R-Iowa) stated in an interview on This Week with George Stephanopoulos that without an international consensus, businesses will definitely move their operations to countries with lower (or nonexistent) emission standards. Others state the U.S. should take the lead now and use that momentum at the global climate change conference in December in Copenhagen. This question boils down to one of strategy.
Our editors will be monitoring the debate of the Wasxman-Markey Bill in the U.S. Senate. Check back for updates.