House set to pass historic Climate Change bill

June 25, 6:56 AMBoston Environmental Policy ExaminerJon Anderson

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House set to pass historic Climate Change bill. After weeks of compromise Obama announced the House is set to pass the Climate Change bill called Waxman-Markey. The key compromise delays regulation of farms for 5 years and gives the regulatory powers to the Agriculture Department not EPA. Midwestern farm states where concerned about EPA's analysis of ethanol production which questions its true role in carbon reduction when including indirect upstream and transportation costs.

The bill is expected to add $10 per month to the average utility bill, costing the average U.S. household between $80 and $175 per year, The bill is expected to reduce imported petroleum from nearly 900 million barrels per to year in 2007 around 500 or 600 million barrels per day in 2030. The specific numbers are highly debatable. But most Americans agree action to reduce greenhouse gas emissions is required soon. Support for Climate Change action falls off sharply among households earning less than $50,000 per year. Wealthier suburbanites support the bill.

The bill called a carbon cap and trade program reduces the amount of carbon allowed to be emitted by industry over time. A key compromise in the bill to coal states is giving nearly 85% of the carbon credits for free. A similar approach in Europe in 2005 has failed to reduce carbon emissions there. The carbon market remains weak during the Great Recession as economic output has declined and not reducing any carbon. The European approach to giving away its carbon credits is seen as a major flaw in the proposed U. S. system. By giving away the carbon allowances, industry is not as quickly stimulated to reduce carbon emissions.

The goal is to reduce carbon emissions by 17% by 2020 and 85% by 2050. The price of carbon is expected to rise over time as the amount of carbon allowed to be released is reduced. Given the recent Wall Street scandals, confidence in a carbon cap and trade program based on a Wall Street model are fraught with uncertainty. Another key compromise was allowing "offsets" that account to reforestation and prevention of deforestation, highly questionable and difficult to calculate the true emissions reduction. But as Bismark said "politics is the art of the possible". While fraught with uncertainty and amid great compromise, it looks like the U.S. will have a carbon reduction plan to bring to the Copenhagen Protocol in December.