Published Jun 04, 2009
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On May 21, following months of work, the House Energy and Commerce Committee passed the American Clean Energy and Security Act of 2009, a 946-page piece of climate legislation. There have been mixed reactions from environmental and climate groups, but most groups are in agreement that it needs to be strengthened going forward. For some groups the problems they see with the bill have led to their public withdrawal of support. These groups include Greenpeace USA and Friends of the Earth. The Chesapeake Climate Action Network also does not support the bill in current form. Below is a summary analysis of the main features of the bill.
–Cap and Trade System: The bill would establish a “cap-and-trade” system which sets mandatory and declining limits on greenhouse gas emissions over the next 40 years. By 2050 it projects reductions of 83% from 2005 levels for the United States. It does this primarily through the establishment of 1) a “cap” on emissions and the annual issuance by the government of permits to emit greenhouse gases , both of which — the cap and the emissions permits — come down steadily year after year, and 2) a tradable market to buy and sell those permits to emit global warming pollution. That’s why it’s called a “cap-and-trade” system. –Wide-Open Buying and Selling: Significantly, this market is open to anyone, not just those entities which emit greenhouse gases. For example, Wall Street firms whose primary purpose is to make money for their investors can buy and sell pollution permits. Anyone, whether Goldman Sachs or John Q. Public, can get into this newly created market. From page 430 of the bill: “The privilege of purchasing, holding, selling, exchanging, transferring, and requesting retirement of emission allowances, compensatory allowances, or offset credits shall not be restricted to the owners and operators of covered entities, except as otherwise provided in this title.” Especially following the sub-prime mortgage/credit/banking crisis, there is concern among many people, including some on Capitol Hill, about the potential for this system to be abused by those out to make quick and big profits.
