Summary of First Senate Hearing on Climate Change
On Tuesday, July 7, the Senate Environment and Public Works (EPW) Committee held the first of several planned hearings intended to help the committee develop climate change legislation. This legislation, which will take the form of a cap-and-trade program, is to be integrated into the existing American Clean Energy Leadership Act of 2009, which passed the Senate Energy and Natural Resources Committee on June 17. EPW Chairman Barbara Boxer intends to base the legislation on the cap-and-trade title of the American Clean Energy and Security Act of 2009, which passed the House on June 26.
The hearing’s witnesses included the administrators of four federal agencies that will be significantly affected by climate change legislation: Secretary Steven Chu of the U.S. Department of Energy; Administrator Lisa Jackson of the U.S. Environmental Protection Agency; Secretary Tom Villach of the U.S. Department of Agriculture; and Secretary Ken Salazar of the U.S. Department of the Interior. Attendance was unexpectedly strong, despite an important health care markup also under consideration, with 15 of 19 EPW Committee members present. Of the four Senators on the EPW and the Health, Education, Labor and Pensions Committee, three attended the EPW hearing: Senators Alexander (R-Tenn.), Merkley (D-Oreg.), and Sanders (I-Vt.).
In their opening statements and their questions, many committee members expressed strong support for the bill, believing it would spur clean energy jobs in their respective states, reduce our dependence on imported oil and improve local air quality while mitigating climate change. Senator Whitehouse (-R.I.) presented a compelling economic case for pricing carbon emissions. Until now, the externality cost of carbon has not been built into the price of polluting, and so it has been borne by the public at large. Pricing the emission of carbon can correct this market failure.
Conversely, some members expressed strong reservations about climate change legislation, asserting that a cap-and-trade program would significantly raise consumer energy prices. Additionally, concerns were raised that price increases would be disproportionately borne by states in the South and Midwest. Some also claimed that the House-passed climate legislation and the Senate energy bill discount nuclear power's potential to replace fossil-fueled electricity. In response, Senator Udall (D-Colo.) pointed out that pricing carbon would benefit nuclear energy, which has relatively low levels of carbon emissions. Other members focused on the limitations of climate legislation that caps U.S. emissions while developing economies like China and India continue to emit unabated.
The four administrators attempted to allay members’ concerns with a compelling case for swift and strong legislation on climate change. Secretary Chu cited the Intergovernmental Panel on Climate Change and the Massachusetts Institute of Technology, both of which suggest that business-as-usual emissions levels carry a 50 percent chance of a seven to nine degree increase in average global temperatures in this century. Secretary Vilsack asserted that a changing climate will present particular challenges to farmers and ranchers.
The administrators also pointed to an analysis by the Congressional Budget Office projecting that the House-passed climate legislation would impose a daily cost per household of less than 50 cents. Secretary Chu pointed to the many cost-effective carbon reductions that could be made through investments in energy efficiency. “I firmly believe,” he said, “that with today’s technologies we can build new homes and buildings that use 40 percent less energy than today’s new buildings and therefore save money on energy bills.” Secretaries Chu and Jackson acknowledged that without an international agreement to cap greenhouse gas emissions no piece of legislation can “solve” climate change; however, action taken by the U.S. is a crucial first step. Without it, developing economies are unlikely to act.
The concerns raised by members critical of climate change legislation are indicative of the challenges the bill will face as it takes shape in the EPW Committee over the next four to six weeks. On Tuesday afternoon the committee held a second panel on this subject where Dow Chemical Vice-President and Alliance Board Member Rich Wells testified on the need for Congress to take prompt action on cap-and-trade climate legislation. The committee will hold several more hearings on this issue – including two on June 14 (on agriculture and transportation) and, we expect, one on June 16 (on the international dimensions of climate change legislation). Chairman Boxer hopes to mark up legislation by early- to mid-August; Senate Majority Leader Harry Reid is encouraging other committees that wish to amend portions of the legislation to complete their work by mid- to late-September.
The Alliance Policy Team is carefully tracking the Senate’s progress toward climate change legislation and we will continue to update our Associates, board members and friends as it advances. If you have questions or comments about the developing legislation, please don’t hesitate to contact us at policyinfo@ase.org.
