The special Senate Committee on Cap and Trade will be wrapping up their meetings today (Oct 29, 2009) to prepare the Kerry-Boxer bill for markup. After a volley of heated comments from Democrats and Republicans concerning the bill, Senators on the committee listened to presentations from expert witnesses from across the country. The testimonies were both for and against climate change legislation, and witnesses were available to members of the Senate committee for cross-examination.
Cap and Trade Witnesses: Panel 1
- Preston Chiaro - Chief Executive Officer, Energy Product Group, Rio Tinto
- John Rowe Chairman - President and Chief Executive Officer, Exelon Corporation
- Dr. Willett Kempton - Professor of Marine Policy, University of Delaware
- Bob Winger - President, International Brotherhood of Boilermakers Local 11
- Fred Krupp - President, Environmental Defense Fund
- Mike Carey President - Ohio Coal Association
- Bob Stallman - President, American Farm Bureau Federation
Cap and Trade Wittinesses: Panel 2
- The Honorable Sherwood Boehlert -
Co-Chair, Bipartisan Policy Center’s National Transportation Policy Project- William Millar President American Public Transportation Association
- Mike McKeever - Executive Director, Sacramento Area Council of Governments (SACOG)
- Barbara J. Windsor - President & Chief Executive Officer,
Hahn Transportation, Inc.Cap and Trade Witnesses: Panel 3
- John Podesta - President and Chief Executive Officer, Center for American Progress Action Fund
- Ned Helme - President, Center for Clean Air Policy
- Jonathan Lash - President, World Resources Institute
- Iain Murray - Vice-President for Strategy, Competitive Enterprise Institute
Cap and Trade Witnesses: Panel 4
- The Honorable Linda Adams - Secretary, California Environmental Protection Agency
- Dave Johnson - Organizing Director, Laborers’ Union Eastern Region
Laborers' International Union of North America (LIUNA)- J. Stephan Dolezalek - Managing Director, VantagePoint Venture Partners
- David Hawkins - Director, Climate Center, Natural Resources Defense Council
- Eugene Trisko -
Attorney at Law, On behalf of the United Mine Workers of America- Matt Smorch - Vice President of Strategic Planning, CountryMark
- Paul Cicio - Executive Director, Industrial Energy Consumers of America
One of the first focuses of the meetings was a price collar that was worked into the current draft of the senate bill from the contributions from the office of Senator Arlen Specter. These collars are designed to deliver subsidies to generators if energy costs increase in the first few years of the program. Senator Lamar Alexander was quick to point out that the amount of collar funds would taper to zero in about 5 years, before the price of carbon is expected to begin a steady linear uptick.
Senator Boxer countered his statement by saying that his calculations certainly don't account for the adaptation of the carbon market, and that the projected cost of carbon cannot truly be known, much as the ease of SO2 emission cuts surprised industry.
Senator Alexander took more time to point out which states in the House had representatives vote for the climate bill, which was the Pacific coast, the Northeast, and Michigan. Representatives from Mountain, Southern, and Midwest states all voted against this, which Senator Alexander says is because Cap and Trade will redistribute $345 million to Pacific and Northeast states each year. The senator ran over his allotted time again by stating that cap-and-trade in the EU has resulted in energy shortages, $8 gas, a 20% higher residential energy bills, and a "green bubble" in Spain and Germany that will collapse as soon as the government weens off subsidies. Alexander called for a boycott of the bill's markup.
John Rowe of Exelon energy delivered a position that the legislation is very unlikely to have a positive effect on carbon emissions at all, though he is in support of adopting a carbon market that will remove "regulatory uncertainty" from the energy industry.
Dr. Willett Kempton came to champion offshore wind energy, and delivered research that suggested that lining the eastern horizon with wind turbines could supply the east coast with all the electricity it needs. Dr. Kempton was an advocate for the feasibility of Cap and Trade to hit its targets, and showed it to be in line with similar commitments in China and Europe. Dr. Kempton pointed out that the United States holds 29% of all patents related to renewable energy, yet only represents 6% of the global market. In contrast, China owns only 4% of such patents but has a 20% market share.
Mike Carey delivered a message against Cap and Trade, citing the horrors that similar legislation has visited on coal communities in the European Union. Carey points to research that in addition to supporting their own families, each of the 200,000 plus employees of the coal industry provide the buying power to support 11 other families. Carey stated that clean coal is not around the corner, and that the 2.2 million job footprint is in serious jeopardy from cap and trade.
Mike Carey goes on to state that even shutting off coal for 100 years would only reduce the presence of carbon dioxide in our atmosphere by 2%, which he clarified with Eco Factory by showing how DOE and EIA numbers agree that the American coal industry only contributes .12ppm CO2 to the global atmosphere. Carey finishes with saying that the EPA is abusing the endangerment finding, stating that their findings gives them the right to impose legislation to cut carbon emissions, and that calling it a "responsibility" is political spin. "The EPA may regulate CO2, not must," said Carey.
Bob Stallman joined Mike Carey on going on the offensive against the climate bill, saying that while the legislation will only affect the worst 5% of carbon emitters, that their employees, supply chain, and neighbors would feel the crunch the worst. Stallman offered up research that suggested that the cost of food purchased in America would go up by $200 billion per year, yet it makes "no effort to find an effective replacement, and offers no pathway to stimulate CCS[carbon capture and storage] and nuclear energy." Bob Stallman is in support of taking positive action, which he feels is not the direction of the climate bill.
Senator Boxer counters Stallman by stating that subsidy fo clean coal technology research and numerous carbon offset generation methods for farmers and ranchers are included in the climate bill, and that market controlled measures are the fairest way to promote green growth.
Senator Inhofe told the Excelon CEO that his company was "already a winner, and stands to gain extraordinary market share if cap and trade passes." Inhofe stated that he would share Mr. Row's point of view in support of cap and trade if he were on Excelon's board of directors. Inhofe also questioned Mr. Stallman about land use, which Stallman indicated will be forced from agriculture to production under cap and trade, either as renewable energy projects or conservation and carbon sink areas. Stallman speculated that this would create an unethical rise in the international cost of food.
Bob Winger, a boilermaker and indirect employee of the coal industry, cited the need for regulatory certainty. Winger cites activist activity and regulatory uncertainty for the cancellation and closure of four coal plants, which Senator Voinovich equates each closure and cancellation as the death of 3,500 American jobs. Although Winger's testimony calls for a "well-understood playing field," Senator Arlen Specter seems to interpret his remarks as an attack on cap-and-trade, and moves to debunk Winger's account of regulatory uncertainty by citing how China's progressive actions has created the first "green billionaires" in solar power.
John Rowe supports Mr. Winger, and states that after cap-and-trade regulations are in place there should be a firmer price collar than the one established by Senator Specter. According to Mr. Rowe, the cost to generate electricity has already increased in price by 5% over inflation since last year. Mr. Carey opposes both of them, saying that cap-and-trade is simply catering to coastal and northeast states while "killing millions of good middle class jobs." He also fights to debunk the ability of the climate bill to fight climate change, quoting famous NASA climatologist James Hansen who said that cap-and-trade is "no more fit to rescue our climate than a V-2 rocket was to land a man on the moon." An EPA analysis backed the statements of Dr. Hansen and Mr. Carey, stating that cap and trade would at best reduce atmospheric carbon by 23ppm, putting us over 500ppm by the end of the century.
Senator Alexander repeatedly re-iterated right-wing talking points, including a government-backed push to build 100 new nuclear power plants and electrify the transportation sector, but that the renewable energy standard needs to be technology neutral instead of favoring wind and solar power. Senator Alexander asked Mr. Rowe of Excelon to confirm that nuclear "uprates," or untapped or easily realized capacity, could bridge the gap in America's power needs until carbon storage and new nuclear plants could be brought online. Mr. Rowe acknowledged that our current nuclear power plants are run so conservatively that the uprates of existing plants represent more power than the entire renewable energy sector, but speculated that even that energy isn't enough to keep America from sliding into an energy crisis. Rowe stated that regardless if cap and trade passes or fails, natural gas is going to greatly increase market share due to rock-bottom prices, less regulatory uncertainty, abundance, and lower up-front costs.
Fred Krupp of the Environmental Defense fund says that companies like Google, Ford, and DuPont are in support of the climate bill because it represents a finality in risk assessments they made long ago. These companies have been positioning themselves to be resilient to environmental legislation for decades, and cap-and-trade represents a method for them to get maximum return on products and policy they developed to mitigate the risk of regulation, and that they've already partially or completely paid for the same changes that their competitors will have to perform once the regulation goes into effect.
Senator Voinovich moves to debunk this notion, saying that multi-national corporations and foreign countries like India and China are "bluffing" in order to influence U.S. domestic policy, as carbon trading and certification for environmental projects does not cross borders. Senator Voinovich also criticizes the Senate committy for trying to "jam cap-and-trade through in 7 weeks, when similar legislation on SO2 and acid rain took 15 years and hundreds of scientific studies." Voinovich points out that the consensus on climate science has changed three times in the past four years, and new research is showing that carbon dioxide could be a bit player in climate change when compared to methane. Voinovich refers to the science behind the bill's motivation as "rough." Senator Boxer called for research papers by the Pew Charitable Trusts that disagree with his statements to be included on the official record alongside Voinovich's remarks.
Senator Klobuchar said that "killing a Senate bill is not success. Industry needs certainty, and killing the Senate bill does not create that." Rowe of Excelon energy supported Sen. Klobuchar's remarks, and used the que to advocate the need to create legislative finality on spent nuclear fuel, and that technology neutrality and free market activity are required to get the best result from cap and trade.
Senator Barraso asked Dr. Krupp "Where do these jobs go? Where does the Midwest and Appalachia go? What happens to all of these people?" Dr. Krupp answered that lost agricultural jobs due to cap-and-trade can find inventive ways to make money, such as generating carbon credits from no-til farming and capturing waste from animals. Bob Stallman states that 20% of agriculture expense is tied to fuel, which will see a nationwide tax approaching $3.6 trillion, and that suggesting that selling carbon credits can make up this difference for agricultural communities is disingenuous.
Preston Chiaro, CEO of a multi-national mining company Rio Tinto, said that they would be successful regardless of if cap and trade passed or not, but they desired a clear-cut understanding of what environmental regulation they would be subjected to in future years.
Iain Murray of the Competitive Enterprise Institute states otherwise, citing the failure of cap and trade in Europe to create a reduction in emissions beyond what is attributed to the recession (U.S. emissions went down 2.8% due to the 3 million job decline). Murray cites how the EU is almost certain to miss their 2020 targets, despite the surplus of available carbon credits in the market. In his accent, he tells stories of British coal towns like Easington that have turned to slums due to cap-and-trade. "If you pass this bill, communities will die, and ordinary, working-class people will have their lives destroyed," said Murray. "Senator Kerry stated that the Midwest has more to lose from climate change than cap and trade. Tell that to the people of Easington. Every day is a bad climate day for them."
The Senate cap and trade bill was presented for markup today, but GOP members boycotted the event. Senator Voinovich appeared in the morning to state that the boycott would continue until the Environmental Protection Agency could provide research results that give cap and trade an argument outside of "inadequate information and false assumptions that could wind up crippling industrial states' economies." Senator Boxer agreed to let the EPA carry out the study requested, but only after the bill was introduced to the full Senate. Voinovich disregarded this concession as disingenuous, as presenting a "potentially flawed bill to the full senate, where partisan gamesmanship could affect the ability to amend it" is not good enough considering the severity of the effect this bill could have.
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