HR 2454 or the Waxman-Markey bill, named after its two major supporters Henry A. Waxman and Edward J. Markey of the Energy and Commerce Committee, was passed in the US House of Representatives on June 27. Its major mandate is a cap and trade system though it does have other green practices scattered throughout. There has been a lot of talk recently, because of this bill, of the viability of a cap and trade system in the US. To evaluate the government’s ability to implement this new system we have to first understand it.
The basics of a cap and trade are fairly simple. It is a way to limit emissions through a credit system. Every business acquires a certain amount of credits; depending on the type of system these credits are either auctioned off or given away by the government. These credits represent the amount of carbon that businesses can emit. If the business cannot adhere to the limit of emissions their credits allow, they must buy credits from companies who are below their cap. Thus the companies who are responsible and limit their emissions are rewarded and those who are not as environmentally friendly are punished.
With this particular cap and trade system only 28% of the credits would be auctioned off over the next ten years. The other 72% will be given away for free, especially to heavy users of coal and other fossil fuels to help them cope with the change. The auctioning of the 28% will generate an estimated 276 billion dollars, which will be distributed to a range of places. Low and middle income families will receive money to help them deal with the increases prices passed down as a result. Big carbon emitters will also receive money on top of getting a good chunk of the free credits.
Where the trouble begins
The specifics of the cap and trade system embedded in HR 2454 are a little troubling. Understand that many businesses with currently high carbon emissions are going to have a hard time adjusting to meet the new standards, but giving them free credits is not the way to go. Auctioning off all the credits would generate government revenue – money that could be distributed to more of the people hardest hit from the resulting increase in prices of energy and goods. Maybe this increase in rebates would quell some of the opposition to the bill.
Besides implementing a cap and trade policy, the bill mandates a 17 percent cut in greenhouse gas emissions by 2020 and an 87% reduction by 2050. Considering the mandates being implemented in California and 21 other states (for instance, buildings will use net zero energy or have net zero carbon emissions by 2030), these reductions do not seem extreme.
The public response to this bill has not been good. Googling the bill generated several articles: almost all were in opposition. Sadly, people tote it as another method Obama has found to increase taxes. They claim it is an unnecessary step to solve a group of alarmists’ wild and false theory, Global Warming. Without arguing the validity of Global Warming, one friend put it to me this way:
“If the believers are wrong and Global Warming is not true then we have implemented changes that will improve our environment and the Earth, if the naysayers are wrong and Global Warming does exist and we do nothing, our cities are underwater.”
The United States is the economic leader of the free world and the most powerful nation on the globe, but we have never been a leader on sustainability. We haven’t signed on to the Kyoto Protocol, we have very few “Green” standards in place, and per capita we emit the most carbon out of any country in the world (19.6 metric tons/person/year compared to 3.7 tons/person/ year from second place China).
Many people claim we are alone in this ever-growing crusade to save the Earth. Interestingly, they claim Europe has given up on sustainability because it is not feasible and unnecessary. Amazing how facts can become so skewed. Not only has the EU accepted the Kyoto Protocol, they have also implemented strict green building standards, emissions limits for cars and many European Countries already have an existing cap and trade system in place. Interestingly, they implemented all of these environment-saving standards with their economies intact…
The US has always lagged behind Europe and other developed nations when it comes to environmental conservation measures. Though this bill is flawed it is a positive step forward in its intent and its power to reduce emissions. Nation-wide opinions need to change on the role of sustainability in our society and hopefully the success of this bill can be the catalyst.
[photo credit: Flickr]