Senate Sits on Cap and Trade Bill

Wed, Jul 29, 2009

8. News

The Waxman-Markey bill was narrowly passed in the House late last month with a vote of 219-212, and is still under consideration in The Senate. The bill, which is titled ‘The American Clean Energy and Security Act of 2009″ (ACES) aims to create jobs, increase domestic use of renewable energy and end American dependency on foreign oil.

Overview of the Bill

ACES is divided into four titles. The third title of the bill, ‘Reducing Global Warming Pollution’ is commonly known as the “cap-and-trade title.” This portion of the bill calls for emission control through a cap-and-trade system that has left republicans outraged and environmentalists underwhelmed.

Cap-and-Trade is an approach to environmental policy that aims to control massive amounts of greenhouse emissions produced by group sources. This policy works by first setting a “cap” for the emissions being controlled. This cap designates how much of the pollutant can be released by all of the sources combined over a period of time.

The Waxman-Markey bill aims to decrease its cap annually with the goal of reducing emissions below 2005 levels 3% by 2012, 20% by 2020, 42% by 2030, and 83% by 2050. The bill focuses on sources such as oil companies, utilities, transportation, and large industrial sources. The ACES estimates that 85% of U.S. greenhouse emissions can be attributed to these sources.

In a cap-and-trade system, each source is allotted emission allowances. The allowance is made up of a number of credits. Each credit is equivalent to one metric ton of a greenhouse gas. The allowances are valid throughout the entire period of time the emissions are monitored.

How each source decides to manage their emissions is not specified, since it would be both expensive and difficult to monitor. Each source may only emit as many tons of the pollutant as they have credits. At the end of a predetermined period of time, each source must report their total emissions. If this number is more than their emission allowances, strict penalties are enforced.

If a source successfully complies with their emission allowance and still has credits left over, they can sell or trade them to other sources. This trade aspect introduces a whole new monetary incentive to the emission control project. The potential for financial gain as a result of reduced emissions gives even those without environmental concerns motivation to participate in a cap and trade program. In addition, it rewards emission control, and penalizes those who emit outside of their allowances.

Problems Moving Forward

While other cap-and-trade programs such as the Acid Rain Program, The Clean Air Interstate Rule, and NOx Budget Trading Program have proven successful in the past, both conservatives and environmentalists are strongly opposed to the passing of the Waxman-Markey bill.

According to Fox news reporter Phil Kerpen, the bill will inevitably impose massive new energy taxes on consumers, while having no discernible impact on global warming.

In a statement before the Committee on Environment and Public Works and the United States Senate, Energy Secretary Steven Chu defended the bill and addressed its adversaries saying, “America has the opportunity to lead a new industrial revolution of creating sustainable, clean energy. Opponents of this effort claim the nation cannot afford to act at this time. I disagree, and so do the Environmental Protection Agency and the Congressional Budget Office. These organizations estimate that meeting the greenhouse gas targets in the House bill can be achieved at an annual cost between 22 to 48 cents per day per household in 2020. That’s about the price of a postage stamp per day.” Chu also explained that the bill hopes to inspire other countries to develop similar programs, inspiring international efforts to slow global warming.

Greenpeace cites different reasons for their disapproval with the bill. Their main objections are against the emission targets, which they feel are too low and essentially ineffective. Another point of contention for Greenpeace is that the bill will grant large polluters billions of dollars in emission allowances. In addition, large polluters can gain access to additional allowances, allowing them to find ways around their emission reductions.


The debate surrounding ACES rages on. With many opposing any kind of climate control, and others enraged by the bills inadequacy, it seems that compromise and agreement in Senate will be difficult. Many are hoping that Senate members will pass a bill with some kind of emission cap, no matter how insignificant it may seem at present. Supporters of the bill see the Waxman-Markey bill as the first step in the right direction, and feel that even a watered down version is better than nothing.

By Katherine Duhaime. Katherine is a graduate of the University of Vermont where she studied English and Environmental Studies. Contact Katherine at keduhaime@gmail.com.

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