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Better climate bill introduced in Congress
NewsNotes, January-February 2010

Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) recently introduced the Carbon Limits and Energy for America’s Renewal Act (CLEAR Act, HR 2877) to reduce greenhouse gas emissions and pave a path for renewable energy. The CLEAR Act is far superior to the more problematic American Clean Energy and Security Act (ACES Act, HR 2454), passed by the House in December, which would allow major polluters in the U.S. to avoid any real reductions in greenhouse gas emissions by giving them free polluting permits, allowing questionable “offsets” and subsidizing coal extraction.

The Friends’ Committee on National Legislation (FCNL) gives seven reasons the CLEAR Act surpasses the ACES Act; the following analysis is based on FCNL’s information:

1. One hundred percent auction of pollution permits: There are no free giveaways to industry; every emitter of a ton of fossil fuel carbon dioxide pays an equal price. If polluting industries in the U.S. do not have to pay for the right to pollute, they will not have any incentive to reduce their levels.
2.  Refund of pollution revenue: Although putting a price on carbon will increase prices in the short-term, 80 percent of the public will feel no net financial impact because 75 percent of the pollution revenue collected by the government is returned to every resident of the U.S. This aspect makes the bill politically viable. With any sort of carbon cap or tax, energy costs will increase for the average person. It is hard to imagine that Congress would continue to vote to increase those costs, which is necessary if we are to reduce overall emissions. It would be politically difficult, if not impossible. But by distributing the money raised from the sale of carbon permits to consumers, this bill would give every person in the U.S. a payment to compensate for increases in their energy costs. Eighty percent would break even or even make money on the deal, while only the richest and highest polluters would lose money. Yet by raising the costs of energy for all, it will naturally lead people and businesses to be more efficient and energy conscious.
3. Protection from market manipulation: To address concerns about Wall Street traders driving up or down the price of carbon purely to make profit and potentially jeopardizing the entire pollution-reduction system, CLEAR limits who can participate in the carbon market to those who must turn in carbon permits. Friends of the Earth put out an excellent report on the problems of creating a multi-trillion dollar carbon derivatives market that would be dominated by the same Wall Street players that created the current global economic crisis. Besides possibly undermining the goal of reductions in greenhouse gases, a carbon derivatives market could bring about the same sort of economic chaos that we are dealing with today.
4. No offsets: CLEAR contains no offsets. Carbon offsets are used in other climate legislation to substitute for industry pollution reductions, but the Government Accountability Office concludes that offsets are impossible to verify as real emission reductions.
5. Does not pick technology winners and losers: CLEAR does not subsidize nuclear power, coal, or renewable energy. Instead it puts 25 percent of the carbon revenue into the normal congressional appropriations process to be allocated separately every year.
6. “Upstream cap”: CLEAR requires compliance as high up in the economy as possible, at the wellhead, coal mine, or import point. This reduces the administrative burden to only two to three thousand producers and importers and ensures catching the vast majority of fossil carbon that enters the U.S. economy. Focusing on a few thousand “upstream” industries that produce the original greenhouse gases is much more realistic than caps on millions of “downstream” industries that would require monitoring and regulating emissions from almost every factory and business in the country.
7. Keeps Clean Air Act protections: The ability of the Environmental Protection Agency to set minimum standards for greenhouse gas-emitters is left intact.

Faith in action:
Write your senators and urge their support of the CLEAR Act.

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