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August 3, 2009
For immediate release: August 3, 2009 EESI Contact: (202) 662-1884 or communications [at] eesi.org CA-CP Contact: Andrew Maguire at (202) 741-9800 or amaguire [at] cleanair-coolplanet.org
Clean Air - Cool Planet (CA-CP) and the Environmental and Energy Study Institute (EESI) today released a letter to Senators Max Baucus, Jeff Bingaman and Barbara Boxer suggesting innovative approaches to strengthen federal climate legislation now under consideration in their committees.
Baucus chairs the Finance Committee; Bingaman, the Committee on Energy and Natural Resources; and Boxer, the Environment and Public Works Committee, all of which are working on changes to the “Waxman-Markey” bill sent up from the House last month.
“We believe cap-and-trade can work to control greenhouse gases, but we also believe important measures must be added to the legislation to help ensure its success in causing emissions reductions and winning political support,” said Rafe Pomerance, President of CA-CP.
“The climate situation is urgent -- scientists are observing wide-ranging impacts that are occurring faster than projected even a few years ago,” said Carol Werner, EESI Executive Director. “U.S. action and leadership is imperative and must ensure that carbon emissions are reduced and that investments in a low-carbon economy are stimulated.”
Noting that threats from global warming that “were only possibilities” a few years ago “have become our reality,” the letter urges the Senators take steps to ensure the legislation:
“A well designed cap-and-trade system should eliminate price spikes, upward and downward,” the letter states. “Consumers bear the brunt of the upward spikes and entrepreneurs bear the brunt of downward spikes. It is hard to finance long-term emissions reduction projects based on short-term upward spikes, and collapsing prices lead to cancellations of financing and investment.”
The groups recommend “a simple fix -- a gradually escalating price collar that institutes maximum and minimum prices above and below the market price while maintaining a firm trajectory toward an emissions cap” that “allows regulated industries to plan for the future and make prudent decisions about capital investments.”
The groups also maintain that truly effective cap-and-trade legislation will cover all major sources of greenhouse gas pollution, regulated as far “upstream” – or as “close to the point where the carbon enters the economy,” Pomerance said, since that produced the fairest and greatest reductions in carbon.
Finally, the groups state, because “it is taxpaying businesses and individuals who will absorb most of the increased costs associated with a climate change policy, it makes sense to return the revenues as much as possible to all individuals and businesses – including payroll tax reductions that would benefit both employers and workers – in a way that does not distort the price signals needed to reduce energy use. Such a tax reduction will lead to other benefits for the economy and thus provide an economic dividend and shrink the economic impact of the cap-and-trade program.”
The letter, co-signed by Pomerance and Werner, cites a Washington Post editorial urging action this year but noting, as the Post opined, “we think it's too soon to settle for something that falls so far short of ideal."
“We whole-heartedly agree. We believe the recommendations we have made above will result in a cleaner cap-and-trade bill that appropriately limits risks, spurs investment and innovation, and sends the right market signals to achieve emissions reduction targets,” the letter concludes.
Click here for the full text of the letter.
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