CAMBRIDGE, Mass.--President Barack Obama on Friday called on the U.S. Congress to pass energy-and-climate legislation, a move he said would stimulate technology innovation and improve the economic competitiveness of the United States.
Obama delivered a speech at the Massachusetts Institute of Technology here after touring student laboratories and before attending a fund-raiser for Massachusetts Gov. Deval Patrick.
President Obama speaking on clean energy at MIT on Friday.
(Credit: Martin LaMonica/CNET)A "comprehensive" energy-and-climate bill will address both environmental and economic problems, Obama said. Countries around the world recognize that energy supplies are limited while demand is rising. That situation is giving rise to a "peaceful competition" among countries to develop clean-energy technologies that "will propel the 21st century."
"There are going to be all sorts of debate both in (the) laboratory and on Capital Hill, but there is no question that we have to do these things," he said. "The nation that wins that competition will be the nation to lead the global economy. I'm convinced of that, and I want America to be that nation."
Obama urged Congress to pass an energy-and-climate bill the Senate is now considering, the Clean Energy Jobs and American Power Act. He specifically praised the bill co-sponsor Democratic Massachusetts Sen. John Kerry, who was present at the talk, and Republican South Carolina Sen. Lindsay Graham. The senators co-wrote an editorial in the New York Times earlier this month outlining the main components of a desired bill, which was seen as a key step toward passage.
The House bill, which narrowly passed in May, includes a national mandate for utilities to use renewable energy and a cap-and-trade system in which large polluters can buy and sell permits for carbon dioxide emissions.
The president did not weigh into the details of the existing bills, but he did outline the contours of an energy policy that reduces the country's reliance on fossil fuels while making better use of natural resources.
The ingredients of energy policy should include clean use of coal, oil, and natural gas; "safe nuclear power;" sustainably grown biofuels; and energy from wind, solar, and wave power, Obama said.
"It is a transformation that will be made as swiftly and carefully as possible, to ensure we are doing everything we can to grow this economy in the short, medium, and long term. And I do believe that a consensus is growing to achieve exactly that," he said.
Obama said the Pentagon and energy security hawks are stepping up efforts to reduce oil imports while businesses and environmentalists are working together. Young people, too, view energy-and-climate as the challenge of their generation, he added.
"We are seeing a convergence. The naysayers, the folks (who) would pretend this is not an issue--they are being marginalized," Obama said.
He said key pieces of the Senate bill have been approved in various committees but he warned that opposition to passing an energy-and-climate bill will increase as passage gets closer.
There were about 700 people at the MIT talk, including a number of local green-technology entrepreneurs, investors, and students at the university, which has become a hotbed for energy science and technology research.
Editors' note: Declan responds to critiques of this post in a subsequent piece he wrote in his Taking Liberties blog at CBSNews.com: "Cap And Trade Redux: $1,761 Annually Per Family? Or Not?"
The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.
A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year.
A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation."
The documents (PDF) were obtained under the Freedom of Information Act by the free-market Competitive Enterprise Institute and released on Tuesday.
These disclosures will probably not aid the political prospects of the Democrats' cap and trade bill. The House of Representatives approved it by a remarkably narrow margin in June--the bill would have failed if only six House members had switched their votes to "no"--and it faces significant opposition in the Senate.
Cap and trade--or emissions trading--is an approach to reducing pollutants by offering companies financial incentives to clean up their acts. The current bill focuses specifically on reducing greenhouse gases linked to climate change.
One reason the bill faces an uncertain future is concern about its cost. House Republican Leader John Boehner has estimated the additional tax bill would be at $366 billion a year, or $3,100 a year per family. Democrats have pointed to estimates from MIT's John Reilly, who put the cost (PDF) at $800 a year per family and noted that tax credits to low income households could offset part of the bite. The Heritage Foundation says that, by 2035, "the typical family of four will see its direct energy costs rise by over $1,500 per year."
One difference is that while Heritage's numbers are talking about 26 years in the future, the Treasury Department's figures don't have a time limit.
"Heritage is saying publicly what the administration is saying to itself privately," says Christopher Horner, a senior fellow at the Competitive Enterprise Institute who filed the FOIA request. "It's nice to see they're not spinning each other behind closed doors."
"They're not telling you the cost--they're not telling you the benefit," says Horner, who wrote the Politically Incorrect Guide to Global Warming. "If they don't tell you the cost, and they don't tell you the benefit, what are they telling you? They're just talking about global salvation."
The FOIA'd document written by Judson Jaffe, who joined the Treasury Department's Office of Environment and Energy in January 2009, says: "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 (billion) to $200 billion annually." (Obviously, any final cap-and-trade system may be different from what Obama had proposed, and could yield higher or lower taxes.)
Because personal income tax revenues bring in around $1.37 trillion a year, a $200 billion additional tax would be the equivalent of a 15 percent increase a year. A $100 billion additional tax would represent a 7 percent or 8 percent increase a year.
One odd point: The document written by Jaffee includes this line: "It will raise energy prices and impose annual costs on the order of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX." The Treasury Department redacted the rest of the sentence with a thick black line.
The Freedom of Information Act, of course, contains no this-might-embarrass-the-president exemption (nor, for that matter, should federal agencies be in the business of possibly suppressing dissenting climate change voices). You'd hope the presidential administration that boasts of being the "most open and transparent in history" would be more forthcoming than this.
Update 9/16/2009: The Environmental Defense Fund has responded to the documents' release with a statement saying, in part:
Even if a 100 percent auction was a live legislative proposal, which it's not, that math ignores the redistribution of revenue back to consumers. It only looks at one side of the balance sheet. It would only be true if you think the Administration was going to pile all the cash on the White House lawn and set it on fire. The bill passed by the House sends the value of pollution permits to consumers, and it contains robust cost-containment provisions. Every credible and independent economic analysis of the American Clean Energy and Security Act (such as those done by the non-partisan Congressional Budget Office, the Energy Information Administration, and the Environmental Protection Agency) says the costs will be small and affordable -- and that the U.S. economy will grow with a cap on carbon.
This was originally published on CBSNews.com.
WASHINGTON--Congressional Democrats' proposal to create a trading system for carbon emissions will create jobs and bolster the economy, the Obama administration told Congress on Wednesday.
House Republicans insisted, however, that the proposal, which would charge the largest emitters of carbon dioxide for burning fossil fuels, would result in higher energy and gasoline prices for consumers, as well as a loss of U.S. jobs as carbon emitters moved positions overseas to unregulated markets.
"I believe this is a jobs bill that focuses our country's attention on the global industry of the future, which is the clean energy industry," Environmental Protection Agency Administrator Lisa Jackson said before the House Energy and Commerce Committee.
The far-reaching legislation being drafted by Committee Chairman Henry Waxman (D-Calif.) and Rep. Ed Markey (D-Mass.) would institute a cap-and-trade system in which carbon emitters would be allowed to buy and trade permits for certain levels of emissions. The bill would also establish a renewable electricity standard and an energy efficiency standard.
"In the future, it is very clear we will be living in a carbon-constrained world," said Department of Energy Secretary Steven Chu. "The U.S. must position itself so we can lead that transition."
Republicans on the committee, however, countered that the bill does not provide enough specifics to reach the administration's optimistic conclusions and warned that just the opposite could be true.
"My fear, my belief, is this is an intentional move to deceive us so we're not allowed to do the cost-benefit analysis," said Rep. John Shimkus (R-Ill.).
This bill is the "largest assault on democracy and freedom on this country that I've ever experienced," he said.
Specifically, the bill lacks details on whether the permits would all be auctioned to carbon emitters, or whether some would be automatically granted to some companies to relieve their economic burden during the transition to a cap-and-trade system. Other data has yet to be provided, such as a proposed cost for the permits.
"This proposal puts a bull's eye on the back of working families," said Rep. Fred Upton (R-Mich.). "Just wait until they get their hands on their utility bills that are capped and taxed."
The administration representatives said cost of the carbon permits should be returned to the American people in the form of the rebate.
Additionally, they said, any costs that may be passed onto consumers would presumably be offset from the benefits gained from higher-efficiency homes and appliances.
Working with the information available from the draft bill, the EPA completed a preliminary analysis of the cap-and-trade portion of the bill, concluding that it would accelerate the deployment of clean-energy technology while growing the economy, at relatively little cost to the consumer.
Before including cost-saving measures like the increase of energy-efficient appliances, the analysis concludes the cap-and-trade program would cost the average household $98 to $140 a year. To reach that figure, the EPA assumed about 40 percent of the allowances would be returned to citizens in some form such as rebates.
The number stands in stark contrast to the figure of $3,100 a year floated by Republicans. That figure was based on a report from the Massachusetts Institute of Technology, but its author said it misrepresented his findings.
In addition to higher energy prices, consumers would suffer from job losses, said Shimkus, who pointed to the 35,000 coal-mining jobs lost in Ohio as a result of regulations imposed under the Clean Air Act.
Jackson warned, "The 'no, we can't' crowd will spin out doomsday scenarios about runaway costs."
She pointed out that the Acid Rain Trading Program, which was established in 1990 under the Clean Air Act, delivered huge benefits--to the tune of $120 billion a year--with an annual cost of only $3 billion a year. The acid rain program is a trading system comparable to a carbon cap-and-trade program.
Republicans also questioned whether putting a price on carbon in the United States would have any impact, given that growing carbon producers like China and India are not adopting similar programs.
"If the United States does take the lead, China will follow," Chu said, adding that he had spoken at length personally with Chinese officials on the issue. "They are taking it very seriously because they see the impacts of climate change as well."
- prev
- 1
- next
