Progress on Senate climate change legislation could be delayed by a group of Republicans who are mulling over the possibility of boycotting the upcoming mark-up in the Senate Environment and Public Works Committee, a committee spokesman said.
A “boycott is on the table as an option,” said Matt Dempsey, a spokesman for Republicans on the committee. “We haven’t got word from the [Democratic] majority that they plan to mark up” the Senate climate change bill (S. 1733) next week, but “we’re certainly heading in that direction.”
The threat of the boycott came on the final day of three days of hearings by the committee on the Democrats’ bill to reduce U.S. industry emissions of carbon dioxide and other greenhouse gases (GHGs) by 20% by 2020, from 2005 levels.
Committee Chairman Barbara Boxer (D-CA) wants to pass the climate bill out of the environment panel promptly to give a boost to an international climate change conference in Copenhagen, Denmark, in December (see Daily GPI, Oct. 27; Oct. 1).
But if all seven of the committee’s Republicans refuse to participate, Boxer would not be able to hold the work session and the bill would be hung up in committee. Two Republicans are required for the committee to have a quorum.
During this week’s hearings, Republicans have been pressing for more detailed analysis of the complex cap-and-trade legislation from the Environmental Protection Agency (EPA).
EPA head Lisa Jackson testified that it could take “four to five weeks to run the full economic modeling” on the bill. Republicans argue that they need the detailed information to gauge the economic impact, even though a preliminary analysis by EPA found that it was similar to a House-passed bill, which the agency said would cost consumers about $80-111 per year.
Sen. James Inhofe of Oklahoma, the senior Republican on the committee, first raised the possibility of a boycott to delay approval of the bill last week. Speaking to reporters Thursday he said, “If we all agree that we don’t have enough analysis, then certainly we want to give enough time to get adequate analysis.”
Republicans argue the legislation would hurt some regions of the country more than others and would result in job losses and higher consumer prices as industry is forced to use more expensive alternative energy and move away from high-polluting oil and coal. They reject Democratic claims that the climate control bill will create new jobs across the U.S. in alternative energy.
Inhofe also has long challenged claims that global warming is under way and bringing the harmful droughts, flooding and polar ice melting that many scientists blame on burning too many fossil fuels.
A prominent Democrat on Boxer’s committee, Senator Max Baucus (D-MT), this week said he had serious concerns with the bill’s 2020 time table for reducing carbon emissions. As chairman of the Senate Finance Committee, Baucus also could delay full Senate passage of a climate bill.
At the last of three hearings Thursday, a Washington, DC-based public interest group said the Senate’s cap-and-trade legislation was similar to “disastrous European” plans, while a major utility company called the bill a “good start,” yet recommended that the emissions reduction target for 2020 be scaled back. An industrial energy group also urged Congress to consider a non-cap-and-trade bill that would seek to cut back carbon dioxide (CO2) emissions by promoting energy efficiency, the acceleration of the use of existing technology and investment in low-carbon energy.
The Senate climate change bill, co-authored by Boxer and Sen. John Kerry (D-MA), “replicates policies that have been tried and failed in other nations,” said Iain Murray, energy policy expert for Competitive Enterprise Institute.
“Because it [the Senate bill] does not recognize that the path of emissions reduction is rightly unacceptable to developing nations, [it] will mean the United States will be placed at a serious economic disadvantage,” he said.
The European Union’s policies, Murray said, have been “ineffective at best, detrimental to their citizens at worst.” The cap-and-trade plan imposed in Europe has so far cost Europe $171 billion and has not led to much emissions reduction, Murray said. He recommended that European and U.S. lawmakers instead should pursue other avenues than emissions reduction.” Climate change adaptation strategies and building resiliency in developing nations are “more promising approaches,” he said.
Murray noted that the United States has outperformed most countries in emissions reduction since 2000, with a reduction in GHG emissions of 3%. The exception has been France, with a reduction of 6%.
However, an early and vocal advocate of climate change legislation, John W. Rowe, CEO of Chicago-based Exelon Corp., called the Kerry-Boxer bill a “good start toward a cost-effective, efficient, market-based response to the climate change challenge. But he recommended a number of changes.
“We believe that the targets and timetables for greenhouse gas reductions in the Kerry-Boxer draft, which are also in the chairman’s mark, are overly aggressive” and unachievable due to the fact that many of the emissions-reduction technologies will not have been developed and commercially deployed yet, he said. “For example, we do not expect substantial deployment of either new nuclear generating stations or new coal generating stations with carbon capture and sequestration in a time frame that will achieve the results mandated by the draft.
“Consequently, we believe that a goal of reducing emissions 14% below 2005 levels by 2020 is much more appropriate and achievable than the 20% goal included in the Kerry-Boxer bill,” Rowe said.
“We are pleased that the Kerry-Boxer bill and the chairman’s mark provide 30% of [emission] allowances to LDCs [local distribution companies] for the benefit of their customers…I do want to note, however, that the actual number of allowances to LDCs under the chairman’s mark would be nearly 18% less in 2020 than under the House-passed bill because to many allowances are taken ‘off the top’ of the total pool for things like deficit reduction and numerous other programs. We join EEI [Edison Electric Institute] in supporting increasing the electric sector’s share to 40% of the total pie, which is comparable to our sector’s share of emissions,” said Rowe, whose company is a member of the United States Climate Action Partnership (see Daily GPI, Jan. 16).
“The Kerry-Boxer bill would establish a government reserve of GHG credits, including both allowances and offset credits, and both a floor and a ceiling on the price of both…The reserve must be large enough to ensure price stability in allowances prices, particularly in the early years of the program,” he said.
As the nation’s largest owner of commercial nuclear generation facilities, Rowe said Exelon was “very pleased to see the nuclear provisions included in the Kerry-Boxer bill, including the laudatory language about the role nuclear power plays in avoiding GHG emissions and the recognition that the long lead times for nuclear power plant construction require that action to move forward with new nuclear development not be delayed.”
But he said more needs to be done. “We are concerned that the bill does little to actually facilitate the large-scale deployment of new plants that will be necessary to reduce emissions on a broad scale.”
The Industrial Energy Consumers of America (IECA) opposes the Kerry-Boxer cap-and-trade legislation, saying it would “immediately and significantly drive up the demand and price for natural gas and electricity.”
If, as expected, “the electric power sector uses natural gas to displace coal to achieve 100% compliance, it would consume the equivalent amount of…about 4.6 Tcf, or roughly a 70% increase over 2008 power industry consumption. The largest increase in domestic [gas] production was only 3% from 2006 to 2007. Clearly the ability to rapidly [ramp up] production of natural gas to meet even a small portion of this potential demand does not exist,” said IECA President Paul Cicio.
And “because natural gas-fired generation sets the marginal price of electricity in a growing portion of the U.S., as natural gas prices go up, so will the price of electricity to every homeowner, farmer and manufacturer,” he noted.
Still the IECA said it preferred that Congress address the climate change issue legislatively, rather than have the EPA taking action under the Clean Air Act (CAA). “Manufacturers do not want the EPA to regulate GHG emissions under the Clean Air Act. The Clean Air Act was never intended to regulate carbon emissions. That being said, Congress needs to advance non-cap and trade legislation that is cost-effective, does not impair competitiveness and removes the potential for regulation under the CAA.”
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