Last week the House Energy & Commerce Committee took a major first step toward the enactment of climate legislation when the Committee approved a combined energy and climate bill to reduce carbon-dioxide emissions and establish a marketplace that would allow companies to buy and sell the right to pollute.
The American Clean Energy and Security Act (ACES) is landmark legislation designed to steer the nation away from fossil fuels and toward wind, solar, and other cleaner forms of energy, with a major near-term emphasis on energy efficiency as the quickest and cheapest means of reducing greenhouse gas emissions. The heart of the bill would impose mandatory, steadily declining limits on the emission of carbon dioxide and other greenhouse gases. It calls for a 17 percent cut from 2005 levels by 2020, a 42 percent cut by 2030, and an 83 percent cut by 2050.
While we have a long road yet to travel, last week's vote in the House Energy & Commerce Committee is the most significant step to date in making the United States a world leader in advancing energy efficiency and addressing climate change. By creating a market-based incentive to reduce emissions through the lowest cost available, the carbon cap and trade program contained in ACES has the potential to be the most significant energy efficiency policy ever implemented in this country, and it would help make the U.S. economy the most energy efficient in the world.
The bill faces considerable hurdles as it moves through Congress. At least two other House Committees, Agriculture and Ways & Means, have indicated their intention to consider the Waxman-Markey bill, which will complicate the House leadership’s plan to bring the bill to the House floor sometime in June.
Prospects for climate legislation in the Senate remain uncertain. The Senate Environment & Public Works Committee has yet to announce a timetable for hearings on a climate bill, while the Senate Energy & Natural Resources Committee is proceeding in piecemeal fashion to craft a separate energy bill in the Senate. According to Alliance sources, the most likely timetable for Senate consideration of energy and climate legislation is in September or October.
What are the stakes involved here for those of us working on behalf of greater energy efficiency and investment in new clean energy technology? There are many important complementary policies in the bill to overcome existing barriers to investment in energy efficiency. Perhaps the most significant is an aggressive policy and timetable for improving building energy codes. The bill establishes aggressive model energy codes and provides financial incentives to states to adopt them. It allows independent code-setting organizations, along with state and local governments, a chance to develop and adopt the codes, but it quickly provides a federal backstop if they do not. This represents a major step forward.
The Alliance estimates that funding for energy efficiency in the bill would total more than $100 billion over the 2012-2050 period, an average of about $3 billion per year over and above regular appropriations. While the spending levels would be a significant increase over historical levels of federal funding for energy efficiency, the Alliance to Save Energy believes this excellent legislation could be improved even more with a more robust energy efficiency allocation.
Lastly and most importantly, by establishing a price on carbon dioxide and other greenhouse gas emissions, the cap and trade system in Waxman-Markey will send a powerful signal though the nation's economy, thus spurring energy savings in areas not easily reached through traditional energy policies. Examples of the kind of energy efficiency investments that will be catalyzed by Waxman-Markey are improvements in the energy efficiency of existing homes and reductions in vehicle miles travelled. The Alliance strongly supports creating such a price signal through cap and trade, applied to as much of the economy as possible.
While not a perfect bill, Waxman-Markey is major step forward and deserves our wholehearted support as it navigates the many hurdles in Congress that it must surmount before being enacted into law.