Arrow-right Camera


House panel OKs greenhouse-gas limits

Fri., May 22, 2009

Bill includes cap-trade system

WASHINGTON – A bill to create the first national limit on greenhouse-gas emissions was approved by a House committee Thursday after a week of late-night debates that cemented the shift of climate change from rhetorical jousting to a subject of serious, if messy, Washington policymaking.

The legislation would create a cap-and-trade system: Over the next decades, power plants, oil refineries and manufacturers would be required to obtain allowances for the pollution they emit. Those who need more or less could turn to a Wall-Street-like market in the allowances.

The 33 to 25 vote was a major victory for House Democrats, who had softened and jury-rigged the bill to reassure manufacturers and utilities – and members of their own party from the South and Midwest – that they would not suffer greatly.

The vote gives this bill more momentum than any previous legislation to clamp down on greenhouse gases, but it still faces hurdles. In the House, Rep. Collin Peterson, D-Minn., has said he wants to take up the bill in his Agriculture Committee, seeking to change rules for those who raise corn for ethanol. The Senate has shot down previous cap-and-trade proposals.

President Obama supports the bill, an aide said Thursday, though some provisions are weaker than he advocated for during the presidential campaign. In particular, Obama called for all pollution credits to be auctioned off by the government, but the House bill would give away about 85 percent of them.

After that shift and a weakening of the bill’s demands for new renewable electricity, the environmental group Greenpeace withdrew its support. But many environmental activists have accepted the changes.

“None of the strength of the bill is affected by that,” said Fred Krupp, president of the Environmental Defense Fund.

The bill, aiming to remake the way the United States uses energy, employs vast incentives and slow-growing punishments to shift from high-polluting fossil fuels to new sources such as wind, solar power and plant-based fuels. The bill calls for a 17 percent reduction in greenhouse-gas emissions by 2020 and an 83 percent reduction by 2050.

Only a small segment of businesses, including utilities, factories and refineries that produce gasoline and other fuels, would have to buy pollution allowances. But because the United States depends heavily on fossil fuels, the new costs would probably be spread through much of the economy.

The Environmental Protection Agency estimated that the overall impact would be too small to significantly dampen economic growth. But the conservative Heritage Foundation has said it might cost a family $4,300 per year in a few decades.

“The actual paperwork isn’t done at the retail level,” said David Kreutzer, a climate policy specialist at the Heritage Foundation. “But it’s going to jack the cost up, and they will have to pass the costs on to consumers.”

Click here to comment on this story »