Markey bill would slash greenhouse emissions
Requires licenses for major polluters
WASHINGTON - Representative Edward J. Markey, the chairman of the special House committee on global warming, will unveil sweeping legislation today to cut greenhouse gas emissions and raise billions of dollars to create alternative sources of energy.
The bill - the culmination of more than 40 hearings by Markey's committee - marks the starting point for a new legislative battle against global warming, a centerpiece of congressional Democrats' agenda for the immediate future.
Markey, a Malden Democrat, described the legislation, which would take effect in 2012, as the most aggressive plan yet for arresting global climate change, mandating an 85 percent cut in greenhouse gases over the next four decades.
The most controversial part of the plan would be the so-called cap-and-trade plan under which major polluters would have to purchase licenses through a government auction to cover the amount of carbon dioxide they produce.
Under the system, the government would cap the total level of pollution allowed each year and sell licenses allowing companies to release carbons into the atmosphere only up to that level. The cost of the licenses would vary depending on the market - with prices dropping as the country comes closer to meeting its goals for eliminating carbons.
The proceeds from these auctions - estimated to be as much as $8 trillion between 2012 and 2050 - would be "recycled" to pay for the development of new low-carbon technologies and to help offset the painful increases in energy prices for American consumers.
"The United States has been a laggard, not a leader on this," Markey said in an interview with the Globe yesterday. "The world is begging the United States to take the lead."
With this bill, he added, "we will be the world leader - as we should be - in solving this problem."
Still, his prescription is likely to meet fierce resistance from some congressional Republicans and industry executives who believe the cap and trade provision would be too burdensome on American businesses. Overseas competitors would not be subject to such regulation, they say, giving a potential advantage to non-US companies.
Even a market-driven approach like cap and trade "can be every bit as onerous as a regulatory hammer approach if it does not have enough flexibility," said Frank Maisano, a professor at Johns Hopkins University's Carey School of Business and an energy-industry consultant.
Markey's plan to require such a precipitous drop in carbon emissions over four decades, he believes, "would tend to be viewed as overly aggressive" by industry officials.
The government, Maisano said, needs to "encourage people to move in the right direction and not shove them over the cliff."
But Markey insists his approach, which he calls a "cap and invest" system, could boost the economy by creating new jobs in alternative energies.
He also said the American people have now awakened to the threat of global warming and are prepared for serious action to cut pollution.
"The bill stems from the lessons I have learned in over 30 years in Congress and as chairman of the Select Committee on Global Warming," Markey said. "But it also tries to capture the spirit of what has captured the American people over the past two or three years."
The 400-page bill, a copy of which was provided to the Globe yesterday, has several major thrusts.
First, it would mandate that greenhouse gas emissions in the United States be reduced to 15 percent of 2005 levels by 2050, while putting in place new environmental standards for coal mines, landfills, wastewater treatment plants, and large animal feeding operations, all of which contribute to dangerous levels of greenhouse gases.
It would also provide financial incentives to farmers and forest managers to reduce their greenhouse gas emissions.
Each year beginning in 2012, the Environmental Protection Agency would auction off the pollution licenses to American industry, a process similar to what the EPA now does to limit the production of chemicals that cause acid rain.
A small percentage of industries that are especially energy-intensive and face heavy international competition - such as iron and steel, aluminum, cement, bulk glass, and paper - would be exempt from the licenses until 2020, at which time they, too, would have to purchase the right to pollute.
A new office set up at the Federal Energy Regulatory Commission would oversee the licensing process to prevent fraud and market manipulation, according to the bill.
The proceeds from these auctions would be used to fund research into clean energy technologies, and to retrain workers who lose their jobs as the American economy becomes "greener."
A substantial portion of the proceeds would also be used to provide low- and middle-income Americans - those households earning $70,000 per year or less, constituting about 66 percent of the country - with rebates and tax credits "to help compensate for any increase in energy costs as a result of climate legislation," according to a summary of the Markey bill.
The bill also creates a fund to offer assistance to developing countries like China and India that carry out their own aggressive programs to reduce emissions, and would financially penalize foreign industries that export energy-intensive goods to the United States if they fail to take similar action to reduce emissions by 2020.
The bill, called the "Investing in Climate Action and Protection Act," will be unveiled by the Massachusetts lawmaker in a speech today at the Center for American Progress, a liberal Washington think tank.
The consensus in the scientific community is that by the middle of the century the world must limit the increase in temperature to two degrees Celsius; it has already increased by up to half a degree.
To meet that goal, scientists believe, at least an 80 percent reduction in carbon dioxide emissions is needed by 2050.
"This has a decent shot at avoiding the worst impacts of global warming," said Daniel J. Weiss, director of climate strategy at the Center for American Progress.
"It also holds significant economic opportunity for the United States."
Bryan Bender can be reached at bender@globe.com. 