Rep. Markey Announces "Investing In Climate Action & Protection Act"

May 28: Representative Edward Markey (D-MA) announced the introduction of what he is calling "a revolutionary new global warming bill" that he said will reduce global warming pollution according to scientific targets, reinvest any revenue back to American workers and technology, and re-establish America as a leader in solving the globe’s greatest challenge, climate change. At a speech at the Center for American Progress, Representative Markey, Chairman of the House Select Committee on Energy Independence and Global Warming, and a senior member of the Energy and Commerce and Natural Resources Committees, laid out his science- and consumer-based vision for climate legislation.

Markey said, “I am here today because the chorus for change is deafening. The time for action is now. We must cap pollution, we must invest in consumers, jobs and the technology of tomorrow, and America must lead the world in solving our greatest challenges, and we must start now.” Markey's bill is called the Investing in Climate Action and Protection Act, or iCAP for short. The bill also proffers a new paradigm in global warming legislation: "the Cap-and-Invest system." The bill caps pollution at 85 percent below 2005 levels by 2050. It then uses an auction system that sets a price on carbon, and allows companies to compete for reductions, or buy or trade credits within the system.

Markey's bill, precedes the highly anticipated Senate debate on the Climate Security Act (S. 2191/S. 3036), scheduled for June 2 [See WIMS 5/21/08], and follows by one day the House Committee on Energy and Commerce and its Subcommittee on Energy and Air Quality, release of another in a series of Climate Change Legislative Design White Papers entitled “Getting the Most Greenhouse Gas Reductions for Our Money” [See WIMS 5/28/08]. The White Paper release by Representatives John Dingell (D-MI) and Rick Boucher (D-VA) discusses a cap-and-trade regulatory program as the cornerstone of a mandatory climate change program designed to reduce greenhouse gas emissions to a specified level [i.e. 60-80% by 2050] at the lowest possible overall cost to society and to lower the cost for regulated entities. [Note: S. 3036 is now the manager’s mark of the Lieberman-Warner Climate Security Act (S. 2191) and has been introduced as a new bill number and will be the bill for floor debate on climate change on June 2.]

In a release, Markey indicated his bill would take the expected $8 trillion in revenues from polluters over the length of the bill, and reinvests that money back to American families and workers and into promoting a clean energy economy. More than half of the funds from the bill goes directly back to low- and middle-income American families to offset any increases in energy costs from the transition of the economy to low- or zero-carbon energy. He said iCAP also invests in green collar job training for workers in a clean energy economy, mass transit and smart growth, energy efficiency programs, adaptation measures here in the United States and around the world, and many other programs that will benefit both the economy and the environment.

Markey said, "We must invest in the American economy and in American workers, and launch an energy technology renaissance that will rival the information technology revolution of the past decade. We all benefited from the Industrial Age, and we have watched the dawn of the Information Age. Today, let’s start the Clean Energy Age.” He indicated that the bill will be introduced next week when Congress is back in session.

According to an executive summary of the bill, the following “covered entities” would be regulated under the cap: (1) power plants and large industrial facilities; (2) entities that produce or import petroleum- or coal-based liquid or gaseous fuels; (3) entities that produce or import hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or nitrogen trifluoride; (4) natural gas local distribution companies; and (5) geological carbon sequestration sites.

The iCAP Act begins by auctioning 94 percent of allowances in 2012 and transitions to a 100 percent auction in 2020. The 6 percent of allowances not initially auctioned are distributed as transitional assistance to U.S. industries that are energy-intensive and exposed to international trade competition (e.g., iron and steel, aluminum, cement, glass, and paper). The iCAP Act permits any person to buy, sell, or transfer allowances or to “bank” them for future use. Covered entities also may borrow allowances from the allowance budget for future years, but these “loans” must be repaid within five years with interest. Covered entities can meet up to 15 percent of their annual obligations with EPA-approved domestic offset credits and up to an additional 15 percent with EPA-approved international emission allowances or offset credits.

The iCAP Act returns over half of auction proceeds to low- and middle-income households through rebates and tax credits. This will compensate all increased energy costs due to climate legislation for all households earning under $70,000 (66 percent of U.S. households), and will provide benefits to all households earning up to $110,000 (over 80 percent of U.S. households). The summary indicates that the bill include policies that will encourage major-emitting developing countries, like China and India, to take comparable action to reduce global warming pollution to protect the competitiveness of U.S. industry.

Environmental Defense Fund (EDF) issued a release saying, "Congressman Markey’s Investing in Climate Action and Protection Act appears to be the most comprehensive climate bill drafted in the House, and Congress should carefully consider the legislation as it crafts an effective response to climate change. . . We look forward to working with Congressman Markey, members of the Energy and Commerce Committee, and the House leadership to bring a strong bill to the House floor as soon as possible.” Other environmental organizations indicated support for the Markey bill including the Natural Resources Defense Council (NRDC) and Union of Concerned Scientists (UCS).

Access a release from Representative Markey (click here). Access the Markey speech to the Center for American Progress (click here). Access an Executive Summary of the legislation (click here). Access the Title by Title Section of iCAP (click here). Access the full text of iCAP (click here). Access legislative details for H.R 6186 (click here). Access a release from EDF (click here). Access a release from NRDC (click here). Access a release from UCS (click here). [*Climate]