US utilities, energy officials challenge climate goals

03 February 2009 23:22  [Source: ICIS news]

WASHINGTON (ICIS news)--A new congressional roadmap for climate legislation came under attack on Tuesday from electric utilities and oil and gas interests who warned that the planned emissions mandate would undermine the US economy.

Senator Barbara Boxer (Democrat-California), chairwoman of the Senate Environment and Public Works Committee, issued a set of principles on Tuesday that she said should underlie legislation that she and other Democrat leaders in Congress want to pass this year to combat global warming.

Boxer said the principles will require a mandatory cap-and-trade emissions control system on the federal level but also will ensure that state and local governments can pursue their own climate change laws and requirements.

“This is the beginning of our legislative effort,” Boxer told a press conference announcing the general principles.

She said the principles call for legislation “guided by science to avoid dangerous global warming” and for emissions targets “that are certain and enforceable”.

The legislation must “establish a transparent and accountable market-based system that efficiently reduces carbon emissions,” she said, adding: “That is, cap-and-trade.”

Under a cap-and-trade mandate, Congress would set a limit or cap on industrial and transportation emissions of greenhouse gases (GHG) such as carbon dioxide (CO2) and sell or auction emission permits to companies.  Those firms whose production facilities emit fewer greenhouse gases than allowed could sell their excess emissions permits to companies that need them.

Allowable emissions would be reduced year-by-year under the mandate to a target level that, in climate legislation floated last year, would reduce US GHG emissions to 80% below 1990 levels by 2050.

Boxer said that revenue from the auctioned emission permits - which some estimates suggest could be trillions of dollars over two decades - would be channeled toward clean energy technologies, worker training for green jobs and wildlife conservation.

However, Jack Gerard, president of the American Petroleum Institute (API), said Boxer’s climate change legislative principles would create “a patchwork of state and local regulations ... that could hamper efforts to reduce emissions and [would] slow economic growth”.

Scott Segal, director of the Electric Reliability Coordinating Council, said the Boxer principles contain a “weakness in the apparent commitment to allow state and local programs to continue even after the adoption of a specific federal law”.

“Controlling greenhouse emissions will be challenging enough without this self-inflicted complication,” Segal said.

Senator James Inhofe of Oklahoma, the ranking Republican on the Environment Committee, criticized Boxer’s climate bill outline, saying that “Democrats are proposing principles for climate legislation that will impose a long-term, multi-trillion dollar energy tax on families and workers”.

“Congressional cap-and-trade bills, often touted as an ‘insurance policy’ against global warming, would instead be nothing more than all economic pain for no climate gain,” Inhofe said.

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By: Joe Kamalick
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