Hill Heat

The White House has issued a Statement of Administrative Policy (SAP) on the Lieberman-Warner Climate Security Act (S. 3036), indicating that President Bush will veto the bill, citing fundamental differences with its approach, including mandatory emissions reductions and carbon pricing. The full text of the SAP is below.

In an address calling on Congress to make all his tax cuts permanent, Bush made the following statement:

Today the Senate is debating a bill called the Warner-Lieberman bill, which would impose roughly $6 trillion of new costs on the America economy. There’s a much better way to address the environment than imposing these costs on the job creators, which will ultimately have to be borne by American consumers. And I urge the Congress to be very careful about running up enormous costs for future generations of Americans.

We’ll work with the Congress, but the idea of a huge spending bill fueled by taxes – increases – isn’t the right way to proceed. And the right way for Congress to proceed on taxes in general is to send a clear message that the tax relief we passed need to be made permanent.

Former Vice President Al Gore’s statement on the Lieberman-Warner Climate Security Act (S. 3036):

I want to commend Senator Boxer for her leadership of the Environment and Public Works Committee. Thanks to her vision and dedication, we have the first global warming bill in history that is comprehensive, bipartisan and that enjoys support across the country – from labor and agriculture to the business and the environmental communities. Of course the bill needs to be stronger, but it’s vital that Congress begin to act. While it’s important that people change their light bulbs, it’s even more important that we change the laws.

On Saturday, May 31st, Senator Boxer gave the Democratic Radio Address on this week’s upcoming debate on the Lieberman-Warner Climate Security Act (S. 3036).

Right now, many of our states, including my home state, are leading. They have the will. Our mayors are leading. They have the will. Religious leaders have urged us to act now as well. They reminded me of a wonderful quote that motivates me to work as hard as I can for as long as it takes to responsibly address global warming. These words stay with me: “When God created the first man, he took him around to all the trees in the Garden of Eden and said to him ‘see my handiwork, how beautiful and choice they are. Be careful not to ruin and destroy my world, for if you do ruin it, there is no one to repair it after you.’”

The full text of the address is below.

The conservative Club for Growth has launched a $250,000 radio and television campaign targeting several coal-state senators in opposition to the Lieberman-Warner Climate Security Act (S. 2191/3036). The Environmental Defense Action Fund, the C(4) side of the Environmental Defense Fund, has also begun a much larger $4 million campaign that comes on top of the estimated $8.5 million already spent this year in support of the cap-and-trade legislation.

The text of the Club for Growth ad running in Tennessee:

Congress is at it again. This time they’re pushing massive new taxes and regulation in the name of global warming. But let’s ask ourselves, are the unproven benefits of legislation worth the major job losses, new taxes and increased energy costs that could result?

Call Senator Lamar Alexander and tell him to vote “no” on the Lieberman-Warner climate bill. Tennesseans just can’t afford another huge, costly government program.

Club for Growth	Environmental Defense

From the press release:

Rep. Edward J. Markey (D-Mass.) introduced a revolutionary new global warming bill today that would reduce global warming pollution according to scientific targets, reinvest any revenue back to American workers and technology, and would re-establish America as a leader in solving the globe’s greatest challenge, climate change.

At a speech at the Center for American Progress this morning, Rep. Markey, who is Chairman of the House Select Committee on Energy Independence and Global Warming, and a senior member of the Energy and Commerce and Natural Resources Committees, laid out his science- and consumer-based vision for climate legislation.

“I am here today because the chorus for change is deafening. The time for action is now,” said Rep. Markey in his prepared remarks. “We must cap pollution, we must invest in consumers, jobs and the technology of tomorrow, and America must lead the world in solving our greatest challenges, and we must start now.”

The bill is called the Investing in Climate Action and Protection Act, or iCAP for short, the small “i” a tip of the cap to the technological potential of clean energy. The bill also proffers a new paradigm in global warming legislation: the Cap-and-Invest system. The bill caps pollution at 85 percent below 2005 levels by 2050. It then uses an auction system that sets a price on carbon, and allows companies to compete for reductions, or buy or trade credits within the system.

The “Investing in Climate Action and Protection Act” (iCAP Act) amends the Clean Air Act to establish an economy-wide cap-auction-and-trade system that adheres to five core principles:

1. Reduce U.S. global warming pollution by 85 percent by 2050, the necessary U.S. contribution to stabilize atmospheric concentrations of heat-trapping gases and avoid dangerous global warming.

The iCAP Act’s cap-auction-and-trade program will cover 87 percent of U.S. greenhouse gas emissions and will reduce covered emissions to 2005 levels by 2012, to 20 percent below 2005 levels by 2020, and to 85 percent below 2005 levels by 2050.

The following “covered entities” will be regulated under the cap: (1) power plants and large industrial facilities; (2) entities that produce or import petroleum- or coal-based liquid or gaseous fuels; (3) entities that produce or import hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or nitrogen trifluoride; (4) natural gas local distribution companies; and (5) geological carbon sequestration sites.

The iCAP Act will achieve 7 percent additional coverage (a total of 94 percent coverage) through (1) mandatory performance standards for coal mines, landfills, wastewater treatment operations, and large animal feeding operations; and (2) voluntary financial incentives to farmers and forest managers to reduce greenhouse gas emissions and increase carbon storage. The iCAP Act also sets mandatory performance standards for new coal-fired power plants, requiring them to capture and sequester 85 percent of their CO2 emissions within a set timeframe.

2. Auction pollution allowances, instead of giving them free-of-charge to polluters, to avoid windfall profits for polluters, ensure fairness and effectiveness, and reduce social costs.

The iCAP Act begins by auctioning 94 percent of allowances in 2012 and transitions to a 100 percent auction in 2020. The 6 percent of allowances not initially auctioned are distributed as transitional assistance to U.S. industries that are energy-intensive and exposed to international trade competition (e.g., iron and steel, aluminum, cement, glass, and paper). The iCAP Act permits any person to buy, sell, or transfer allowances or to “bank” them for future use. Covered entities also may borrow allowances from the allowance budget for future years, but these “loans” must be repaid within five years with interest. Covered entities can meet up to 15 percent of their annual obligations with EPA-approved domestic offset credits and up to an additional 15 percent with EPA-approved international emission allowances or offset credits. Domestic and international offset credits are subject to rigorous standards to ensure reductions in emissions or increases in sequestration are real, verifiable, additional, permanent, and enforceable. The Federal Energy Regulatory Commission will oversee the carbon market to prevent fraud and market manipulation.

3. Return over half of auction proceeds to low- and middle-income households to help compensate for any increase in energy costs as a result of climate legislation.

The iCAP Act returns over half of auction proceeds to low- and middle-income households through rebates and tax credits. This will compensate all increased energy costs due to climate legislation for all households earning under $70,000 (66 percent of U.S. households), and will provide benefits to all households earning up to $110,000 (over 80 percent of U.S. households).

4. Invest the remaining auction proceeds in programs that will further reduce the costs of climate policy, spur the development of advanced low-carbon technologies, grow the U.S. economy, and address unavoidable impacts of climate change.

The iCAP Act uses the remaining auction proceeds to fund:

• clean energy technology research, development, demonstration and deployment;
• efficiency policies to reduce the costs and consumer impacts of climate policy;
• incentives to U.S. farmers and foresters to reduce greenhouse gas emissions and increase carbon storage in agricultural soils and forests;
• green jobs training and assistance for workers to transition into the new jobs of a low-carbon economy;
• reduction of deforestation and deployment of clean technologies in developing countries;
• programs to increase resilience to climate change impacts in the United States and in developing countries; and
• climate change education.

5. Include policies that will encourage major-emitting developing countries, like China and India, to take comparable action to reduce global warming pollution to protect the competitiveness of U.S. industry.

Under the iCAP Act, developing countries that take comparable action to reduce global warming pollution will have access to funding from the International Clean Technology Fund and will be allowed to sell “offset credits” into the U.S. market. Developing countries that carry out programs to reduce emissions from deforestation will be eligible for assistance from an International Forest Protection Fund. If a country fails to take comparable action by 2020, importers of energy-intensive primary goods (e.g., iron and steel, aluminum, cement, glass, and paper) from that country will have to purchase special reserve allowances to account for pollution generated in the production of such goods. Until 2020, U.S. manufacturers of competing primary goods will be given free allowances to prevent loss of jobs or “leakage” of emissions due to international competition.

On Wednesday, Sen. Olympia Snowe (R-Maine) announced her support for S. 3036, saying it “mirrors closely” the Kerry-Snowe Global Reduction Act (S. 485), which calls for a 65 percent reduction from 2000 levels of greenhouse gases by 2050. Snowe also noted that language from the Feinstein-Snowe Emission Allowance Market Transparency Act (S. 2423) was included in the manager’s mark.

Unlike Lieberman-Warner, Kerry-Snowe also sets a goal of achieving a greenhouse gas stabilization target of 450 ppm, and calls for the establishment of vehicle emissions standards. In Snowe’s press release, she states that Lieberman-Warner “would reduce greenhouse gas emissions by at least 66 percent by 2050,” although NRDC analysis of the bill finds that Lieberman-Warner would only achieve reductions between 60 to 65 percent from 2000 levels.

On Wednesday, Senate Majority Leader Harry Reid (D-Nev.) introduced Sen. Barbara Boxer’s (D-Calif.) manager’s mark of the Lieberman-Warner Climate Security Act (S. 2191) as a new bill, numbered S. 3036. S. 3036 will be the vehicle for the floor debate of the cap-and-trade legislation. On Thursday, Reid filed for cloture on a motion to proceed onto the bill, setting the stage for a 5:30 p.m. vote on June 2, one week from Monday. According to E&E News, “Few expect the vote to be contentious.”

“It may even end up being 99-0,” said Andrew Wheeler, staff director for Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.). Inhofe plans to back this procedural step as a gateway to a bigger debate over the merits of the legislation, Wheeler said.

Reid, Boxer, and the bill’s co-sponsors, Joe Lieberman (I-Conn.) and John Warner (R-Va.), have not determined what terms they will seek for the debate and amendment process. Reid has the option of exerting privilege to block unwanted amendments by “filling the tree” with his own.

Download the Full document. Titles are after the break.

From the Wonk Room.

House Oversight and Government Reform Committee chairman Henry Waxman (D-CA) has today released documents and testimony that show White House involvement in the Environmental Protection Agency’s (EPA) decision to deny California’s request for a waiver to enforce its greenhouse gas emissions standards for cars and trucks.

According to testimony by former EPA Associate Deputy Administrator Jason Burnett, EPA Administrator Stephen Johnson’s “preference for a full or partial grant of the waiver did not change until after he communicated with the White House” :

When asked by Committee staff “whether the Administrator communicated with the White House in between his preference to do a partial grant and the ultimate decision” to deny the waiver, Mr. Burnett responded: “I believe the answer is yes.” When asked “after his communications with the White House, did he still support granting the waiver in part,” Mr. Burnett answered: “He ultimately decided to deny the waiver.” Mr. Burnett also affirmed that there was “White House input into the rationale in the December 19th letter” announcing the denial of the waiver and in the formal decision document issued in March 2008.

Burnett refused to testify on any further specifics, telling the investigators “that he had been directed not to answer any questions about the involvement of the White House in the decision to reject California’s petition.” Burnett, who was involved in a series of questionable EPA decisions during his tenure, resigned from the EPA on May 6.