George S. Van Nest
Dolan Media Newswires
Rochester. N.Y. — On June 25, the U.S. House narrowly passed the Waxman-Markey Climate Change Bill — H.R. 2454, the American Clean Energy and Security Act of 2009.
As the Senate considers the issue, the proposal warrants a close look.
Key provisions of the House bill include an emission cap to reduce greenhouse gas emissions 17 percent by 2020 and by 83 percent by 2050 from 2005 levels; a “renewable electricity standard” requiring utilities to get 15 percent of their electricity from renewable sources by 2020 and an additional 5 percent through conservation and enhanced energy efficiency, unless a state gains approval to adjust the percentages; new energy efficiency standards for buildings and appliances, as well as higher efficiency standards for industry and transition assistance for energy-intensive, trade-dependent industries, financial assistance for low-income consumers affected by high energy prices and training funds for laid-off workers.
The purpose of the bill is to address global warming by reducing greenhouse gas emissions from stationary and mobile sources. The legislation is a tax on the emission of carbon dioxide from business, utilities, transportation, farmers and homeowners.
In order to achieve the greenhouse gas reductions the bill requires regulated entities — accounting for about 85 percent of emissions — to get emission allowances for each ton of greenhouse gas they directly emit or is embedded in the fossil fuels they process or distribute. The system will require creation of an allowance trading market (that is, Wall Street) to provide a means to buy and sell available allowances and offsets to meet the statutory standards applicable to a particular industry. The total number of allowances would be scaled back each year, causing the regulated sources to reduce emissions.
The costs associated with the legislation are far reaching. Direct costs and expenses would be imposed on utilities, industry and manufacturers, inevitably increasing the cost of fuel, energy and products. It also would create indirect costs for consumers and homeowners, and invariably reduce employment and the nation’s gross domestic product.
Energy-dependent industries such as manufacturing, construction, farming and transportation will suffer because cap and trade will drive up the cost of energy prices significantly. It’s likely to have a drastic impact on employment, even after all of the so-called green jobs that may be created are accounted for.
Regardless of your personal or political perspective, Americans would be well advised to carefully consider and comment on a proposal that could dramatically impact the nation and economy for virtually no environmental benefit.
George S. Van Nest is senior counsel in Underberg & Kessler LLP’s Litigation Practice Group, and co-chairman of the firm’s Environmental Practice Group. He focuses his practice in the areas of environmental law, construction and commercial litigation.