CHN: Senate Climate Bill Takes Important Steps To Curb Global Warming; Does Less than the House Bill to Protect Low-Income Consumers

On September 30 after much negotiating, Senators John Kerry (D-MA), Chairman of the Senate Foreign Relations Committee and Barbara Boxer (D-CA), Chairwoman of the Senate Environment and Public Works Committee, introduced major environmental legislation – the Clean Jobs and American Power Act (S. 1733).  The legislation would reduce greenhouse gases that threaten the planet with global warming.  S. 1733 proposes reducing emissions by 20 percent over 2005 levels by 2020, a more aggressive reduction than the 17 percent called for in the bill the House passed in June (H.R. 2454).  Both bills are based on a ‘cap and trade’ system that requires entities that are the primary sources of the emissions – power plants, oil refineries, factories and others – to obtain permits based on the number of tons of carbon they emit.  Initially most of the permits will be given to industries that are contributing to pollution.  If they are able to reduce emissions below the level their permits allow, they can sell the permits to those who need more.
Undoubtedly energy costs will rise in the transition to an economy that relies on environmentally-friendly renewable sources of energy, such as wind and solar power.  It is important that climate legislation extend targeted relief to low-income families, who are struggling to make ends meet and cannot afford significant increases in their household energy costs. The Senate bill does not go as far as H.R. 2454 in protecting low-income households from the rising cost of energy.  The House bill would fully offset losses in buying power for the poorest 20 percent of households due to increased energy costs that include utility bills, food, transportation, and other expenditures.  It achieves this goal by allocating 15 percent of the total value of the permits for rebates to these households.  H.R. 2454 would efficiently deliver benefits to eligible households using the electronic debit cards that now deliver benefits such as food stamps (now officially known as the Supplemental Nutrition Assistance Program, or SNAP). Those not in the system would apply to be enrolled.  This assistance supplements the relief households would receive from provisions in the bill giving free emission permits to retail gas and electric companies to keep utility bill costs down for all of their customers.  (For more detail regarding H.R. 2454 see Human Needs Report for July 1.)

Unlike the House bill, S. 1733 as introduced falls short of totally offsetting anticipated losses that the poorest households will experience.   While S. 1733 also calls for 15 percent of the total value of permits to go for relief for these households, the 15 percent is calculated after a portion of the total permit value is set aside for deficit reduction.  This is in order to comply with a Senate budget rule that requires legislation to be deficit neutral for 40 years after the initial 10-year period.  An analysis by the Center on Budget and Policy Priorities estimates that from 2012-2019 the Senate bill would provide about one-sixth less funding to the poorest households than the House bill.  Similarly, additional permits provided to companies that distribute energy (such as electric companies) to provide relief in utility bills would be worth less in the Senate bill than in the House legislation.  One remedy would be for the Senate to change S. 1733 to allocate more than 15 percent of the value of the remaining permits for this bottom quintile of consumers.  (See the full Center on Budget and Policy Priorities analysis.)

The final bill signed by the House and Senate has the potential to create millions of new jobs in areas including those related to developing clean energy technologies; making buildings, lighting, and appliances more energy-efficient; and creating clean transportation infrastructure.   Advocates believe that some of the clean energy jobs that will result from the legislation should go to low-income workers.  In what they viewed as a positive first step, H.R. 2454 calls for establishing a Green Construction Careers Demonstration Project.  The demonstration projects would be designed by the Secretary of Labor with some of the jobs targeted to TANF and SNAP recipients and veterans, or workers in census tracts in which at least 20 percent of the households have incomes below the poverty line, or those in families whose incomes did not exceed 200 percent of the federal poverty line in the prior two years.   In August advocates wrote a letter to the Senators urging them, at a minimum, to include this program in their bill. (See the letter).  S. 1733 does include the Green Construction Careers Demonstration Project.

Six committees in the Senate have jurisdiction over various aspects of the energy bill: Environment and Public Works, Finance, Energy and Natural Resources, Agriculture, Commerce and Foreign Relations.  The Environment and Public Works Committee will begin marking up S. 1733 this week.  Passing legislation in the Senate will be very difficult.  There are significant disagreements even among Democrats, often along regional lines.  Many Senators from Midwestern states which are heavily dependent on coal as their source of energy support less rigorous emission standards to give the industry more time to develop technologies that will result in fewer emissions.  Some Senators are skeptical about the feasibility of building coal plants that are significantly cleaner.  Some Members support increasing nuclear energy among the mix of energy sources while others are concerned about the lack of an effective way to deal with the radioactive waste it produces.  Still another issue is whether to expand off-shore oil drilling.  An almost certain Republican filibuster will set up a 60-vote hurdle for passage of legislation.

With health care legislation set to take up weeks of Senate floor time, passing a climate bill this year seems highly unlikely.  However, the Administration and many in the Senate are anxious for the Environment and Public Works Committee to show progress by passing a bill prior to the U.N. Climate Conference in Copenhagen December 7-18, where governmental representatives from 170 countries will try to come to some agreement on actions to prevent global warming.  The United States’ effort to establish itself as a leader in this area is on the line.  Many believe that failure to show progress in addressing climate change will result in the United States losing investment opportunities for developing clean technologies and the accompanying green jobs.

In the absence of legislation, the Environmental Protection Agency (EPA) has authority under the Clean Air Act to regulate greenhouse gases of polluting industries.  However, EPA favors cutting emissions through legislation and avoiding inevitable law suits it could face without the backing of new legislation.

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