Panel OKs Cap-and-Trade Bill, Despite Republican Boycott

This story appears in the Nov. 9 print edition of Transport Topics.

Democrats on the Senate Environment and Public Works Committee last week approved a cap-and-trade bill that opponents said would cause a spike in the cost of diesel fuel.

The legislation now goes to the Senate floor. Senate leaders said they hoped the final legislation would gain bipartisan support, despite a boycott by the committee’s Republicans, who called the bill a “jobs killer.”

The bill would limit greenhouse gas emissions of mostly large energy users through a cap-and-trade program, which would require them to comply with greenhouse gas emissions reduction mandates by purchasing allowances. Overall, the bill’s goal is to reduce greenhouse gas levels by 2020 to 20% below 2005 levels.

The measure would not immediately require the transportation sector to limit carbon emissions.

However, Republicans, some Democrats and other opponents of the bill said it is, in effect, a tax on refiners and other energy producers because it requires them to buy credits that would be passed on to customers as an increase in fuel prices.

The Nov. 5 environment committee vote did not include the seven Republican members who boycotted any discussion on the measure. The only dissenting Democrat in the committee vote was Montana Sen. Max Baucus.

Sen. James Inhofe (R-Okla.), ranking Republican on the committee, briefly attended a Nov. 4 committee session to present a letter from Sen. George Voinovich (D-Ohio), in which he requested that Environmental Protection Agency Administrator Lisa Jackson provide more information on the bill’s effects on the economy, jobs, energy prices, and energy security.

An EPA economic analysis of the Senate legislation closely paralleled the conclusions reached by a study of the House climate bill passed in June, but Republicans said they wanted EPA to do a more comprehensive study.

EPA said the Senate bill would cause an average increase of $88 to $111 in annual energy costs for American consumers.

Inhofe declined to answer questions from Democrats on the committee, saying the letter spoke for itself. “We want to mark up this bill,” Inhofe said. “Madam chairman, it’s really in your hands now.”

“I really appreciate your stopping by, and I hope you’ll come back soon — with your other Republican friends,” Sen. Barbara Boxer (D-Calif.) responded.

She said that Senate Majority Leader Harry Reid (D-Nev.) has promised a complete study of the final climate bill that would include measures approved by other Senate committees.

At a hearing last month, the bill’s chief author, Sen. John Kerry (D-Mass.), confirmed that the transportation sector would not be regulated by the climate change legislation, but he conceded that it would cause an increase in energy costs.

Barbara Windsor, president of Hahn Transportation, New Market, Md., testified last month that the bill would dramatically increase the cost of diesel fuel by as much as 88 cents a gallon.

“An economywide cap-and-trade system requires refineries to purchase carbon allowances to cover their direct refinery emissions, and additional allowances to cover the amount of carbon produced by the downstream combustion of the fuels they produce,” Windsor, testifying as first vice chairwoman of American Trucking Associations, told the committee Oct. 29. “The costs associated with obtaining these carbon allowances will be passed on to the fuel consumers in the form of higher prices.”

Democrats on the Senate environment committee were quick to criticize the Republicans’ boycott last week as a “ruse,” comparing their absence to soldiers going AWOL and students skipping classes, and calling Republicans the “party of no-show.”

“We have a practice in the world’s greatest deliberative body of disagreeing without being disagreeable,” Sen. Arlen Specter (D-Pa.) said at a Nov. 3 committee session, “but you can’t disagree with an empty chair.”

In a related development last week, the U.S. Chamber of Commerce, which had taken a hard-line position earlier opposing climate change legislation, offered its assistance in passing a bipartisan bill.

“As your committee reopens discussion on a climate bill, the Chamber urges you to take steps to bridge the political and geographical divide that prevented the enactment of comprehensive climate change legislation in 2003, 2005, and 2008, and appears to have stalled the current effort,” the business group wrote in a Nov. 3 letter to the committee.

The chamber said in the letter that it still opposes “bad policies that resemble the failed climate proposals of the past,” but a recent article in the New York Times by Kerry and Sen. Lindsey Graham (R-S.C.) called for bipartisan climate legislation and shows that Senate leaders have “taken a constructive and positive stand on global climate change and energy security, rising above partisan politics and opening a real discussion on how to address this important issue,” the group said in the letter.