Waxman-Markey: CPR Member Scholars Weigh In

On Tuesday, March 31, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) released a “discussion draft” of the American Clean Energy and Security Act of 2009 – a climate change bill that will serve as the starting point for long-delayed congressional action on the world’s most pressing environmental program. CPRBlog asked several Center for Progressive Reform Member Scholars to examine different aspects of the 648-page Waxman-Markey bill. Their detailed responses are posted individually on CPRBblog, but here are some highlights:

Citizen Suits. Member Scholar Nina Mendelson applauds the bill’s provisions on citizen enforcement suits. She writes, “Environmental statutes traditionally provide for citizen enforcement suits as a critical supplement to governmental enforcement, especially in a world of limited budgets…. Supreme Court decisions have, however, created uncertainty regarding when and which citizens can bring such suits to protect the environment, particularly in the climate change setting….Some members of the Court have suggested, however, that Congress has the power to ‘define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before,’ and implied that the judiciary will respect such judgments. The Waxman-Markey bill takes up this invitation. The bill includes legislative findings that very small incremental increases in greenhouse gas emissions can worsen climate change and increase the risk of injury to individuals, as well as language suggesting that individuals suffering such small injuries can bring citizen suits, even if the injuries are widely shared.”

Carbon Offsets. Member Scholar Victor Flatt takes a look at the issue of carbon offsets. He writes “the offsets provision may be most controversial in its limited examination of the environmental effects of offsets, and its use of offset management to try and address international competitiveness issues…. Interestingly, the bill provides that offset reductions of a ton of CO2 equivalent are not as valuable as an emissions reduction of the same amount under the established cap. A regulated entity must provide 1.25 offset credits to meet the obligations of one emissions reduction credit.” He suggests the provision is an acknowledgement of the “suspicion with which American policymakers still view offsets in a comprehensive federal scheme.” He continues, “The Waxman-Markey bill recognizes the now familiar requirements that all offsets must be ‘additional’ (which includes a minimum of leakage), ‘verifiable,’ and ‘permanent.’ These terms of art officially exist to ensure that offsets are not fraudulent…. One of the more problematic aspects of the offset provisions of the bill is its failure to examine the full environmental impacts of offsets. Though the bill does require that environmental effects (as well as social, human, and health effects) be considered in determining what types of offset projects should be recognized, it only requires an examination of environmental effects for forestry projects.”

State and Regional Cap-and-Trade Regimes. Member Scholar Kirsten Engel examines the bill’s impact on state and regional cap-and-trade programs. One is already up and running – the Regional Greenhouse Gas Initiative (RGGI) in ten northeastern and mid-Atlantic states – and several others are in various states of creation, most significantly the Western Climate Initiative, which includes seven states and four Canadian provinces, and a California-specific plan to implement its 2006 climate change bill, AB 32. She writes, “The intent of the legislation appears to be to clear the decks of state and regional programs to help a federal cap-and-trade program get up and running unencumbered by the complex issues involved in meshing with such sub-national programs, while, at the same time, allowing such programs to kick in at a later date. Hence the bill does two important things: it provides for the exchange of allowances issued by RGGI and California for federally-issued allowances and it preempts the operation of any state or regional cap between the years 2012 (the date the federal cap-and-trade program will go into effect) and 2017…. The five-year preemption provision will certainly discourage states and regions from pursuing the development of their own regional cap-and-trade programs for the immediate future. The preemption provision will give the federal cap-and-trade program an opportunity to establish itself and work out any kinks without the additional complications involved in interfacing with a state or regional program. It will also have the effect of ensuring that such subsequently-operative programs work around the federal program, rather than vice-versa.”

Environmental Justice. Member Scholar Alice Kaswan examines the bill’s environmental justice implications. Here the issue is about how the bills trading scheme for greenhouse gas emissions would affect localized concentrations of other polluting – but not greenhouse – emissions. Other pollutants go up the smokestack with greenhouse gases, and if the cap-and-trade mechanism results in certain areas buying credits and creating more pollution, it may not have a localized “hot spot” effect in terms of greenhouse gases, but it could have that effect with other pollutants – and that will pose a hazard for the low-income and minority communities in which polluting plants tend to be sited. Kaswan writes that, “the Waxman-Markey bill’s establishment of greenhouse gas reduction goals is a critical step for the climate and is likely to improve overall air quality as well. But the Act’s almost complete reliance on a cap-and-trade program for reducing facility emissions may not offer as many opportunities for reducing co-pollutant emissions as it would if it were combined with some direct regulatory measures…. While the federal approach appears to give relatively scant attention to co-pollutant reduction benefits, the Act does appear to give the states the ability to achieve environmental co-benefits. While the Act makes clear that the Clean Air Act does not apply to greenhouse gases, it does not appear to prevent the states from regulating them.”

Renewables, Transportation, and EPA and State Regulation. Member Scholar Alice Kaswan also discusses the bill’s provisions on renewable and transportation-related greenhouse gas emissions. She writes: “Unlike traditional environmental laws, the bill addresses not only the end-of-the-stack – the emissions of greenhouse gases – but the energy sources and consumer consumption that lie behind them. Following in the footsteps of many states, it sets a federal goal for renewable energy production. To varying degrees, the law also promotes energy efficiency in buildings, lighting, appliances, mobile sources, utilities, and industry. The bill also recognizes that transportation infrastructure and land use planning impact emissions, and implicitly recognizes the federal-state partnership necessary to reduce the nation’s emissions. The Act requires states to develop goals for transportation-related emission reductions and requires states to work with regional transportation agencies to develop plans for achieving them. While the bill does not set any specific standards, it at least begins the process of stimulating state and local entities to consider the connections between land use and transportation emissions.”