Weekly Climate Change Policy Update - November 2, 2009

Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

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Commentary Chairman Boxer said the mark-up of S.1733 will start on Tuesday. Over the weekend, Chairman Boxer released an amended version of S.1733 for mark-up, now being referred to as the Manager's Amendment . . . Republican members of the EPW Committee have threatened to boycott the mark-up by depriving the EPW Committee of a quorum, citing the lack of new EPA economic modeling on the Kerry-Boxer bill . . . An arcane budgeting rule in the Senate is unsettling the Kerry-Boxer deliberations. The Congressional Budget Office has determined that budget neutrality under the Senate rules requires a hold-back of more allowances than in the House. Kerry and Boxer applied this extra hold-back as a haircut across everyone's allowance allocation in their bill. This CBO haircut, plus some new allocations, resulted in an approximately 15% reduction in each allocation, which has some entities calling it more of a scalping than a haircut . . . A major emerging issue with the Kerry-Boxer bill is its absence of any preclusion of continued authority for EPA to regulate GHG emissions under the Clean Air Act. It may be a bargaining chip, but it appears that the bargaining could become vigorous. EPA Administrator, Lisa Jackson testified in an EPW hearing that it could be useful for the Agency to retain some GHG regulatory authority.

Executive Branch Administration Officials Testify in Support of Kerry-Boxer. On the opening day of hearings before the Senate Committee on Environment and Public Works on the Kerry-Boxer climate change bill (S.1733), three high-level Obama Administration officials offered positive remarks about the legislation. Energy Secretary Steven Chu called the cap-and-trade program at the heart of S.1733 "the most important element of this bill" because it would provide a more stable investment environment for clean energy than traditional "on-again, off-again" tax credits. Environmental Protection Agency (EPA) Administrator Lisa Jackson testified on the agency's economic analysis of S.1733, stating that the bill would "transform" the nation's energy system and economy at a cost of less than fifty cents per day per household in 2020. Jackson also supported retaining EPA's Clean Air Act authority to regulate GHGs under the bill, arguing that the agency could address uncapped emissions and environmental justice concerns. Interior Secretary Ken Salazar, Federal Energy Regulatory Commission Chairman Jon Wellinghoff, and Transportation Secretary Ray LaHood also offered testimony. None of the officials present offered a formal Administration endorsement of the bill. DOE Awards $3.4 Billion for "Smart Grid" Projects. The Department of Energy (DOE) announced the winners of $3.4 billion in competitive grant funding for projects to modernize the transmission grid to accommodate higher levels of renewable energy, and install...