GHG ADVISORY SERVICE - FEDERAL

Waxman GHG Bill Update - Compromises on Allowances and 2020 Target - New Draft to be Released Next Week

As part of CantorCO2e’s ongoing issue tracking on greenhouse gas developments for our clients, we share the following general update on Congressional efforts to pass a greenhouse gas bill:

Yesterday afternoon Rep. Waxman indicated a new draft of the climate bill will be released next week.  Democrats are closing in on a compromise to win committee approval for a revised Waxman-Markey greenhouse gas bill.  Key elements of a proposed compromise:

• Allocation of Allowances:  approximately 55% of the 4.7 billion 2012 allowances could be given to utilities, refiners and manufacturers (steel, paper, cement, etc.) – a value of $30 - $45 billion depending on the allowance price.  The free allocation of those allowances could last as long as 10 to 15 years post-2012.  Many Democrats are justifying the partial allocation of allowances in the early years of the program by taking the long view of the next 4 decades and the ultimate 2050 reduction goal of 83% below 2005 emission levels.
• Reduction Target:  scales back target to 17% below 2005 emission levels by 2020 from Waxman’s original 20% reduction target. 

Both of these bill elements could still change between now and the Committee vote.  Some conservative Democrats are still pushing to have the 2020 target be 14% below 2005 emission levels – matching President Obama’s original proposal.

In parallel developments, Rep. Waxman yesterday reaffirmed his interest in going to the full committee for a vote after facing complaints from some subcommittee Democrats on his proposal to bypass Rep. Markey’s subcommittee and move forward with a vote of the full committee which he chairs.  Waxman proposed skipping the subcommittee in order to meet his goal of passing the bill out of committee by Memorial Day in two weeks. His timing is being driven by Congress and the President’s goal of moving forward with health care reform legislation.

The feathers of some influential Democrats have been ruffled on the Waxman bill by EPA’s draft regulation on renewable fuels.  House Agriculture Chairman Colin Peterson (D-Minn) said that other Democrats from ethanol states hold their support from the House Climate bill because of EPA’s proposed inclusion of GHG emissions from land use changes spurred by biofuels production.  These “lifecycle” emissions will be measured as part of EPA’s regulation of renewable fuels.  Other Democrats not on the House Energy and Commerce Committee have voiced concerns with elements of the GHG bill.

On the Republican side of the aisle, Minority Whip Eric Cantor (R-Va) told members of the National Association of Manufacturers Thursday that House Republicans will forma “strike team” to target GHG legislation.  Cantor added that the GOP should “counter with something that makes sense.” 

At a speech Wednesday night, White House energy and climate advisor, Carol Browner said that the key message President Obama delivered Tuesday during his meeting with the 34 Democrats on the House Energy and Commerce Committee was: “send me comprehensive energy legislation, cap-and-trade legislation, this year.”  To back up the impetus for congressional action, Browner also indicated that White House lawyers were “into the weeds” on the Clean Air Act “which is exactly where we need to be right now.”

How the votes are adding up

Democrats must convince 12 of 19 “holdouts” to achieve the 30 votes needed to pass the climate and energy bill through the Energy and Commerce Committee.

Yes – 18 Members

Henry Waxman (D-Calif.)
Ed Markey (D-Mass.)
Frank Pallone (D-N.J.)
Anna Eshoo (D-Calif.)
Lois Capps (D-Calif.)
Jane Harman (D-Calif.)
Janice Schakowsky (D-Ill.)
Jay Inslee (D-Wash.)
Tammy Baldwin (D-Wis.)
Anthony Weiner (D-N.Y.)
Doris Matsui (D-Calif.)
Donna Christensen (D-V.I.)
Kathy Castor (D-Fla.)
John Sarbanes (D-Md.)
Christopher Murphy (D-Conn.)
Jerry McNerney (D-Calif.)
Bruce Braley (D-Iowa)
Peter Welch (D-Vt.)

Holdouts – 19 Members

John Dingell (D-Mich.)
Rick Boucher (D-Va.)
Bart Gordon (D-Tenn.)
Bobby Rush (D-Ill.)
Bart Stupak (D-Mich.)
Eliot Engel (D-N.Y.)
Gene Green (D-Texas)
Diana DeGette (D-Colo.)
Mike Doyle (D-Pa.)
Charles Gonzalez (D-Texas)
Mike Ross (D-Ark.)
Jim Matheson (D-Utah)
G.K. Butterfield (D-N.C.)
Charlie Melancon (D-La.)
John Barrow (D-Ga.)
Baron Hill (D-Ind.)
Zach Space (D-Ohio)
Mary Bono Mack (R-Calif.)
Betty Sutton (D-Ohio) 

No – 22 members

Joe Barton (R-Texas)
Fred Upton (R-Mich.)
Ralph Hall (R-Texas)
Cliff Stearns (R-Fla.)
Nathan Deal (R-Ga.)
Ed Whitfield (R-Ky.)
John Shimkus (R-Ill.)
John Shadegg (R-Ariz.)
Roy Blunt (R-Mo.)
Steve Buyer (R-Ind.)
George Radanovich (R-Calif.)
Joseph Pitts (R-Pa.)
Greg Walden (R-Ore.)
Lee Terry (R-Neb.)
Michael Rogers (R-Mich.)
Sue Myrick (R-N.C.)
John Sullivan (R-Okla.)
Tim Murphy (R-Pa.)
Mike Burgess (R-Texas)
Marsha Blackburn (R-Tenn.)
Phil Gingrey (R-Ga.)
Steve Scalise (R-La.)

Please contact me for me for more details and insights to this rapidly evolving legislation.

Thank you,
Allan

______________________

Allan F. Bedwell
Vice President and Director
North America Sustainability Strategies Group

CantorCO2e
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