Friday, June 26, 2009

America draws the line here

I have spent a great deal of time in the last few weeks working with my colleagues on the Energy Independence and Global Warming Committee and the Energy and Commerce Committee on a measure that will curb greenhouse gas emissions. This legislation, which is being debated as I write this, is designed to reduce America’s contributions to global warming. This is not an easy task nor will it come with zero cost.

The American Clean Energy and Security Act (H.R. 2454), includes a cap-and-trade global warming reduction plan designed to reduce economy-wide greenhouse gas emissions 17 percent by 2020. Other provisions include new renewable requirements for utilities, studies and incentives regarding new carbon capture and sequestration technologies, energy efficiency incentives for homes and buildings, and grants for green jobs, among other things.

Not passing a measure that curbs greenhouse gas emissions is simply not an option, and while this is not a perfect bill it strikes a balance between aggressive environmental regulations and protections for consumers. Not everyone is happy, both the environmental lobby and advocates for the poor think the balance should shift their direction. However, with Chairmen Markey and Waxman’s guidance, the bill is frankly as good as anyone could reasonably hope for.

The time for action is now. In fact, had we heeded warnings twenty years ago, we would be in a much better position today. The scientific consensus is that greenhouse gas emissions contribute to global warming, and that warming will result in rising seas and more violent weather and shorter growing seasons. Inaction will cause global catastrophe.

Carbon based emissions that result from our dependence on coal and oil for energy cause health and environmental problems and deadly consequences for the health of humans and our planet.

If that weren’t enough reason to act, or to those who still doubt the science of global warming, there is more than enough reason to break our addiction to oil in the gigantic additional costs on taxpayers to support our military and political operations in the Middle East.

The system Congress is debating called “cap-and-trade” would be America’s first comprehensive effort to combat the threat of global warming. There is zero doubt it will limit harmful human-generated emissions, accelerate development of renewable energy sources, create "green economy" jobs and help reduce dependence on oil.

This cap-and-trade has wide support among environmental groups and many industries. It is not perfect, but it is a policy that I think we have the votes to pass and certainly is a bold first move to curb the damage we have sown on our planet.

However, there are certainly those who have legitimate concerns about this policy and bill. I received this letter yesterday from the Congress of Racial Equality (CORE) and it is a good demonstration of 1) the misinformation that is surrounding this debate and 2) how some natural allies are turning against one another because of these falsehoods and fear.

Dear Representative Cleaver:

I am writing to urge your strong and vocal opposition to the so-called Waxman-Markey climate tax bill.

For the past 60 years, the Congress of Racial Equality (CORE) has worked and fought in the trenches of public policy to defend the interests of working class and poor families across America. In my 40-plus years as CORE's Chairman, I have seen few federal bills that would do more harm to America's working class and low-income citizens and families than the Waxman-Markey climate tax bill.

This bill represents an immoral assault on poor Americans because it is designed to purposely raise the cost of energy in order to force the working poor to reduce their standard of living.

By making the use of fossil fuels more costly, it will have a disproportionate and negative impact on those who now benefit most from the affordable and reliable power that fossil fuels provide: poor and working-class families.

The underlying goal of this legislation is the morally repugnant concept that constricting sources of domestic energy and raising energy costs is a good thing because it will force conservation by consumers. That elitist view assumes that poor, working class families have the ability to bear that 'social cost.'

The plain truth is this: the poor and working families we represent cannot bear that luxury.

Americans don't want 'energy welfare' payments from the government to help ease the sting of these government-driven cost increases. They want continued affordable and reliable energy, which this bill will constrict.

This is an explicitly anti-consumer package that will have huge impacts - both direct and indirect - on the struggling families we represent. On behalf of CORE's more than 100,000 members nationwide, I urge you to announce your public opposition to it today.

Thank you very much for your consideration of this urgent request. We are today sending alerts against this bill to thousands of citizens across the state of Missouri and to news media outlets nationwide.

Roy Innis
Chairman, Congress of Racial Equality

Before a bill comes to the floor, the Congress uses an independent agency to “score” the bill and provide an authoritative, nonpartisan opinion on the cost associated with passage of a measure. This group, called the Congressional Budget Office (CBO), provided its assessment on the average household implementing the proposed American Clean Energy and Security Act.

The CBO concluded the act would result in a net cost to the average American household of $175 per year by 2020. The CBO estimated that the poorest American households would, in contrast, see a net annual benefit of $40. (see attached scoring document)

The CBO's estimates of net costs are substantially lower than the predictions offered or feared by critics of the bill.

I do not blame people for being confused. Again, this is a complicated bill. What has happened is that many of the numbers being used in the debate are good examples of what we call apples-to-oranges comparisons. I have seen many estimates that rather than estimating the cost to 2020, they extrapolated beyond the CBO’s accounting to 2035 using who knows what matrix.

The CBO has a good reputation for providing accurate and independent assessments -- and based on their report the average cost to an American household is $14.58 per month.

That's a relatively small price to pay over a long term. The letter I received from CORE, did not address some of the work I have been heavily involved in the final negotiations with the bill.

I was please to be a part of establishing five programs to protect consumers from energy price increases: one for electricity price increases; one for natural gas price increases; one for heating oil price increases; one to protect low- and moderate-income families; and one to provide tax dividends to consumers. In combination, these programs substantially reduce the impact of ACES on American consumers. Confirming the CBO estimate the EPA has assessed that ACES would cost the average household $80 to $111 per year, less than a postage stamp per day. According to EPA, families would actually spend less on utility bills in 2020 than they would in the absence of legislation because of the energy efficiency provisions in ACES.

Here is an example of the average cost of this bill per household that included a series of tax credits that assist those in the lowest income levels pay for rate increases.

Income bracket: Cost to consumer after credits applied
Lowest Quintile -40
Second Quintile 40
Middle Quintile 235
Fourth Quintile 340
Highest Quintile 245
Average per household 165

But we should also focus on what was not included in the CBO's assessment and estimates by most other analysts.

The report from the CBO says its cost estimates do "not include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change." And CBO didn't include the economic "effect of other aspects of the bill, such as federal efforts to speed the development of new technologies and to increase energy efficiency by specifying standards or subsidizing energy-saving investments."

These are huge potential economic generators and encourage America to use this essential change to how we power our nation as a means to restart our economy and get people back to work.

Inaction is simply not an option. We have done a great deal to mitigate the impact this bill will have on the pocketbooks of the poor, but there is one last point I would like to make about allegations about the burden on those less fortunate. The poor, unfortunately, have been the canaries in the mineshaft on the effects of global warming. They have been the first to feel the impact of global climate change and it will continue to affect them without mercy.

The cost of the increased fury of Gulf hurricanes was borne by the poor in New Orleans to a much higher degree-and that trend will continue globally.

More intense weather, more intense heat waves, less productive crop seasons, and coastal flooding globally-all are costs borne more by the poor than any other.

A half-degree increase in global temperature will have, and has already had, catastrophic effects on the poor of Sub-Saharan Africa and Southeast Asia.

It has been an honor to be a part of crafting this monumental bill that has the potential to change the course of history. We are drawing the line in the sand here and saying we must go no further polluting our environment. The time has come to cease inflicting damage and heal our planet.