U.S. Chamber sharpens critique of House energy bill

Major climate and energy legislation moving through the House Energy and Commerce Committee would create an expensive, complicated, regulation-heavy system that would not spur developing nations to reduce their greenhouse gas emissions, the U.S. Chamber of Commerce charges in a letter to lawmakers.

Even so, the nation's largest business association regards the cap-and-trade plan sponsored by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) as the lesser of two evils. U.S. EPA regulation of carbon dioxide and other heat-trapping gases under the Clean Air Act would set off a "catastrophic cascade" of rules and lawsuits, R. Bruce Josten, the chamber's executive vice president for governmental affairs, warned in the letter sent yesterday.

"As Congress once again prepares to bang the gavel on a climate change policy debate, congressional leadership has a serious choice to make: continue to push the same costly, rigid ideas of the past two decades, or take steps to begin a workable process to reduce emissions of greenhouse gases," Josten wrote.

The 3-million-member business group, he said, will weigh proposed climate legislation against whether it preserves domestic jobs, accelerates deployment of clean technologies, promotes energy conservation and provides an "international solution" that includes developing nations.

Lawmakers have introduced several climate bills this session, but Waxman and Markey's "American Clean Energy and Security Act of 2009" has emerged as the focal point of a national debate over the economic and environmental tradeoffs of capping carbon.


The Waxman-Markey bill would cap emissions of greenhouse gases at 17 percent below 2005 levels by 2020 and 83 percent by 2050. The bill would also set a 20 percent renewable energy and energy efficiency standard by 2020.

The electricity sector would be allocated 35 percent of emission allowances to protect consumers from power cost increases, under a national cap-and-trade system. States and local natural gas distribution companies would also receive initial emissions allowances for free, according to language that committee Democrats agreed to this week.

Waxman and his colleagues will release additional details of the legislation today (see related story).

The Waxman-Markey bill's short-term emissions target falls within a range called for by the 30 companies and environmental groups in the U.S. Climate Action Partnership. General Electric Co. and several other U.S. CAP companies are also Chamber of Commerce members.

"The committee appears set to deliver a plan that is environmentally effective and smart on consumer costs, which is precisely what's needed," said Tony Kreindler, a spokesman for the Environmental Defense Fund, a fellow U.S. CAP member.

But Josten warned in yesterday's letter that the bill would overlay cap and trade on top of an "already dizzying array" of existing and proposed environmental and energy regulations.

The bill would impose carbon tariffs on imports and allow states to continue regional cap-and-trade programs on top of a federal one, he claimed. The bill would also expose 27 million small businesses to U.S. EPA-enforced New Source Performance Standards for machinery and equipment.

Markey spokesman Eben Burnham-Snyder called the characterizations a "complete misreading" of the bill.

Most, if not all, small businesses emit less than 25,000 tons of carbon annually -- the bill's regulation threshold, he estimated.

"If you're a mom-and-pop pizza place or a PR firm, you're not going to be affected," Burnham-Snyder said.

States could reinstitute the regional cap-and-trade pacts after 2017 under the bill, but Burnham-Snyder predicted that is unlikely to happen.

"The states that do these regional programs support a national program," he added.

When asked about the timing of the chamber's highly prescriptive letter, a spokesman for the business group called climate "a front-burner issue."

In recent weeks, Nike Inc. and other large chamber members have stepped up pressure on the Washington, D.C.-based business lobby to support emissions cuts consistent with the Waxman-Markey bill (E&ENews PM, May 13). President Obama's budget request to Congress for fiscal 2010 suggested similarly aggressive emissions-reduction targets.

A recent report commissioned by the chamber, the National Association of Manufacturers and other business groups warned that the Obama budget's proposed emissions targets would result in a net loss of 3.2 million U.S. jobs by 2030 and shrink household purchasing power by more than $2,100. A U.S. EPA analysis of Waxman-Markey's draft bill last month projected a lesser economic burden on households (E&ENews PM, April 28).

Dave Hamilton, who directs the Sierra Club's global warming and energy programs, dismissed the chamber's letter as "fear-mongering."

"This letter doesn't attempt to explain the program detail," Hamilton added. "It's just trying stir up hysteria."

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