The Waxman-Markey Bill: A Good Start or a Non-Starter?

As carbon cap-and-trade legislation works it way through Congress, the environmental community is intensely debating whether the Waxman-Markey bill is the best possible compromise or a fatally flawed initiative. Yale Environment 360 asked 11 prominent people in the environmental and energy fields for their views on this controversial legislation.

The bill is officially entitled “The American Clean Energy and Security Act,” but most people who follow this issue simply call it Waxman-Markey. Named for its sponsors — Rep. Henry Waxman (D-CA) and Ed Markey (D-MA) — the legislation has been roundly criticized for doing too little or too much, but one thing is clear: No matter what form it finally takes, the bill is historic. For the first time, the U.S. government would cap and regulate emissions of carbon dioxide.

Given that CO2 is a byproduct of the process that drives the American economy — combusting fossil fuels — it is no wonder that the bill is controversial. Many opponents, particularly Republicans, say it is a grave error to place a ceiling and a price on carbon emissions, particularly at a time of economic crisis.

But even erstwhile allies in the environmental movement are split over the bill. Their disagreement is centered on the many compromises — including a weakening of emissions and renewable energy targets — that the bill’s sponsors were forced to make in order to win approval in the House Energy and Commerce Committee.

Yale Environment 360 asked environmentalists and energy experts to share their thoughts on the Waxman-Markey bill. A majority of the environmentalists said they supported the bill — despite its many flaws — because it represents the beginning of an effort to rein in greenhouse gas emissions. These supporters noted that many important pieces of U.S. environmental legislation began with modest steps that were later toughened by amendments. Supporters also said that passage of Waxman-Markey was vital if the U.S. hopes to lead the effort to ratify a global climate change treaty later this year in Copenhagen.

Opponents maintained, however, that Waxman-Markey has been irrevocably compromised. They contended the bill makes so many concessions to powerful industrial lobbies that it will do little to effectively reduce greenhouse gas emissions. The opponents also criticized a provision that would strip the Environmental Protection Agency of its recently acquired ability to administratively regulate CO2 emissions from coal plants. In the end, these critics conclude, it is better to start over and fight for a stronger bill than pass the current, watered-down version.

Here are their responses:

Angela Anderson | Phil Radford | Joe Romm
Denis Hayes | Brent Blackwelder | David Jenkins
Charles T. Drevna | Liz Martin Perera | Michael Brune
Paul Hawken | Michael Noble

Angela Anderson

Angela Anderson, Program Director for U.S. Climate Action Network.

The Waxman-Markey bill offers the most important opportunity in generations to create a prosperous 21st century economy that protects us from a climate crisis. Only by improving and passing a bill will we get a framework for transitioning to a clean-energy future. The bill, as it stands, may not reduce global warming pollution as fast as science is telling us is prudent. When we add emission reductions in this proposed law to the promises of other countries, we fall far short of what we need to do globally. So let’s be clear about what this bill provides: It gives us a framework to build on, and puts us on the path to what science says we need. But it is only the beginning.

Congress will need to stand strong against the special interests that seek to weaken the bill and have the courage to entertain essential measures to strengthen it. It needs stronger requirements for renewable energy and energy efficiency; the EPA needs the authority to hold polluters accountable; and domestic and international investments are critical to transforming the global economy.

The U.S. tradition on environmental protection seems to dictate that the most difficult step is the first one. Whether it is clean water, clean air, or ozone depletion, we have never been able to pass a bill and walk away. We set the policy in place, fight for swift and stringent implementation, sue when we need to, and go back to Congress if we haven’t gotten it right. Global warming is no different. For over a decade, we’ve worked to get to this point in the legislative process. We cannot blow this moment. But we shouldn’t think for a second our job is done once the bill is passed. In some ways, we’re only just beginning.

Phil Radford

Phil Radford, Executive Director of Greenpeace USA.

Representatives Waxman and Markey have played a crucial role in bringing global warming to the forefront of the Congressional agenda. And we believe in President Obama’s vision of clean energy jobs and not letting special interests dominate politics. But this bill falls short of that vision.

The science is clear: the United States and the developed world must cut emissions 25 to 40 percent below 1990 levels by 2020 to avoid catastrophic climate impacts. This legislation at best provides a 4 to 7 percent cut below 1990 levels in that time frame, and it is likely to get worse in the Senate. While 4 percent is something, it’s like building a 4-foot levee in New Orleans as the waters rush in at 40 feet. Here’s a sampling of what the bill gives away:

  • 1. The bill would not force polluters to cut their own pollution until more than a decade from now. Instead, they could buy “offsets,” paying a farmer who temporarily traps CO2 in the soil by not tilling it as much, rather than preventing pollution at the smokestack.

    2. The Renewable Energy Standard requires less new clean energy than we will have without this bill passing.

    3. The bill strips away some of the Clean Air Act authority to reduce coal plant pollution in new plants, as well as the EPA’s authority to regulate global warming pollution under the Clean Air Act.

The net result is that coal companies won’t need to cut their pollution, and the president will lose the power to regulate coal under the Clean Air Act, which could very likely cut global warming pollution as much as, or more, than this bill.

We are urging President Obama to confront the undue influence of corporate polluters by using his considerable executive authorities to ensure America’s plan to tackle global warming is based on science, and puts people above politics as usual.

Joseph Romm

Joseph Romm, Senior Fellow at the Center for American Progress, where he runs the blog, climate He is a former acting assistant secretary of energy.

Only two questions really matter regarding the Waxman-Markey bill.

First, is it compatible with — indeed integral to — a national and international effort to keep global warming as close as possible to 2 degrees C?

Second, what would be the outcome if the bill failed?

The answer to the first question is absolutely “Yes.” While the bill is weaker than it should be, particularly its 2020 target, it mandates a 42 percent reduction in U.S. greenhouse gas emissions by 2030 and an 83 percent reduction by 2050. Building on the massive investment in clean energy in the economic stimulus, the bill completes the transition to a clean energy economy. It devotes some $15 billion a year to clean technology development and deployment. It would be the single greatest push toward an energy-efficient economy in U.S. history.

The bill directs substantial funds toward a global effort to stop tropical deforestation. While it theoretically authorizes up to 2 billion tons in offsets to be used in place of domestic emissions reductions, nowhere near that amount of offsets exists today, nor is there any reason to believe they ever will. If the nations of the world agree to adopt emissions targets, timetables, and strategies compatible with stabilization near 2 degrees C, then the international offsets market will remain relatively small and expensive — especially compared to the large pool of low-cost, domestic, clean-energy emissions reduction strategies.

As for the second question, failure to pass the bill would end any hope of stabilizing climate at anywhere near a 2-degree C increase. Serious U.S. action would be off the table for years, the effort to jumpstart the clean-energy economy in this country would stall, the international negotiating process would fall apart, and any chance of a deal with China would be dead. Warming of 5 degrees C or more by century’s end would be all but inevitable.

Waxman-Markey is the only game in town. Let’s work hard to improve it, but killing it would be an act of environmental suicide.

Denis Hayes

Denis Hayes, President of the Bullitt Foundation, board chairman of the American Solar Energy Society, and National Coordinator of the first Earth Day.

The bottom line in politics is always how you vote. If I were in Congress, I would hold my nose and vote for the Waxman-Markey bill.

What do I dislike about Waxman-Markey?

  • It allows 2 billion tons of offsets a year. Trading “permits” is fine; trading “offsets” eventually will shred the law’s effectiveness. Offsets are hard to regulate and the international offset bubble is already growing rapidly.
  • The bill’s goal for 2020 — the easiest reductions — is a wimpy 17 percent cut in carbon emissions below 2005 levels, which essentially guarantees that the world will pass some tragic climate tipping points. It gets tougher later, but I don’t care about easily abandoned promises to make really hard cuts by 2050. What matters is what we are willing to do today.
  • The bill auctions only 15 percent of the carbon permits for now. It should auction 100 percent. A 100 percent auction would function as an efficient carbon tax, with the tax rate set each year by the market and revenues distributed through open public processes. The bill’s approach represents back-room politics that mostly favor the powerful polluters who have spent a fortune fighting against climate legislation.
  • The bill awards 10 times as much money to speculative carbon capture and sequestration projects as to all green jobs training and aid to displaced workers, combined.

So why would I support it?

Henry Waxman and Ed Markey are green legislative heroes. They privately acknowledge the flaws in this bill, and they would make it much stronger if that were possible. They can also count votes.

Waxman-Markey’s flaws are huge but discrete, and they can be addressed in the years ahead. Meanwhile, we have to pass something to give the Obama Administration the necessary credibility to create global momentum before Copenhagen. Toward that end, Waxman-Markey is the only credible game in town.

Brent Blackwelder

Brent Blackwelder, President of Friends of the Earth.

During last year’s campaign, then-Senator Obama articulated a bold vision for a clean energy future. He argued that green investments and cuts in pollution can strengthen our economy and create millions of jobs, bolster national security, and help avoid catastrophic climate-change impacts. Voters were persuaded and Obama won in a landslide.

Unfortunately, the bill now moving through Congress fails to live up to Obama’s vision. Special interests — including Big Oil, Dirty Coal, and Wall Street — continue to hold too much sway in the Energy and Commerce Committee from which this bill emerged. In exchange for voting for this bill, conservative Democrats demanded hundreds of billions of dollars worth of giveaways to their favorite campaign contributors.

The result is a bill that doesn’t bring about anywhere near the pollution reductions necessary to avoid cataclysmic warming. The bill’s targets fall far short of scenarios outlined by the Intergovernmental Panel on Climate Change, and even further below what’s needed to return atmospheric carbon dioxide concentrations to the safe level of 350 parts per million. The bill also makes it hard to achieve a global climate agreement by underfunding international adaptation and clean-energy deployment.

The bill creates giant, under-regulated carbon markets that will benefit Wall Street but not reliably reduce pollution. It eliminates Clean Air Act protections, undercutting the Obama administration’s ability to act. It contaminates carbon markets with “offsets” that will delay U.S. pollution reductions and are unlikely to result in intended reductions overseas.

What may be more relevant to people concerned about how to put bread on the table is that some analyses have the bill producing no more clean energy than business as usual for the next few decades. This means the millions of jobs we can create by transitioning to a clean energy economy won’t come from this bill.

David Jenkins

David Jenkins, Vice President for Government and Political Affairs, Republicans for Environmental Protection.

The American Clean Energy and Security Act is currently the only viable legislative vehicle for passing comprehensive climate legislation this year. As such, it needs to continue its journey through the legislative process. It is not a great bill, but it is better than doing nothing.

The integrity of this climate bill has already suffered a serious blow as a result of the parochial deal-making needed to just secure the support of Democrats on the House Energy and Commerce Committee. Waxman and Markey made dramatic early concessions — giving away 85 percent of the emissions allowances in the near term, reducing reduction targets, and allowing offsets.

Those are serious concessions to secure a handful of committee votes on the Democrat side, and those concessions will embolden other lawmakers to demand their pound of flesh as the bill moves toward a floor vote. Also, by not involving climate-friendly Republicans in the drafting and initial horse-trading, the bill has not yet gained the level of bipartisan support needed to get it through the Senate — or to help sustain it over time should the bill become law.

A better, and more politically sustainable, cap-and-trade approach would be to auction off most of the emission allowances and return a large portion of the proceeds to the public to offset energy cost increases, thus generating nationwide public support for emission reductions. A revenue-neutral carbon-tax, as proposed by U.S. Rep. Bob Inglis (R-S.C.), would accomplish the same thing.

The Waxman-Markey bill is an imperfect product of the legislative sausage factory and contains plenty of unsavory political byproducts, but lawmakers — Republican and Democrat alike — should work constructively to improve and pass it. Every year that we fail to enact legislation to reduce carbon emissions, climate change becomes more difficult and costly to address. The responsible, and conservative, course is to act now.

Charles T. Drevna

Charles T. Drevna, President of the National Petrochemical & Refiners Association.

Climate change is a complex public policy challenge that must be addressed with realistic, long-term strategies recognizing the vital role that all forms of energy — traditional, alternative and renewable — will play in maintaining our country’s economic strength and quality of life. The National Petrochemical & Refiners Association supports the advancement and deployment of new technologies that bring reliable, affordable, and clean supplies of domestic energy to consumers.

If federal climate change legislation is eventually adopted, we believe such legislation must set a realistic carbon reduction target without political preconceptions or punitive provisions, and allow the innovative nature of American businesses to achieve those goals through the most efficient means. It must protect impacted businesses and the existing jobs of their employees from competition with foreign companies whose countries do not limit carbon dioxide emissions. It must prevent mandating contradictory or redundant policies, and establish a single federal carbon constraint program that supersedes all other federal, state, and local statutes and programs. Lastly, it must not advantage or disadvantage one form of energy over another with respect to carbon constraints.

The Waxman-Markey legislation fails those tests in a number of ways. U.S. refiners already face stiff foreign competition and would be severely disadvantaged with higher compliance costs under the Waxman-Markey scheme. Indian businesses, for example, are building refineries specifically geared toward U.S. markets. Such foreign refiners, whose facility emissions are not addressed in the bill and whose operating costs are much lower, will gain a distinct advantage over American businesses in the marketplace. By ceding our stake in the markets to foreign businesses in locations where environmental standards are not nearly as stringent as those that already exist in the United States, global greenhouse gas emissions would likely increase.

Liz Martin Perera

Liz Martin Perera, Legislative Representative on Climate for the Union of Concerned Scientists.

This year presents a narrow window for putting a framework in place that can institute a hard cap on emissions, kick-start the clean-energy economy, and begin the international negotiation process. While the Waxman-Markey climate and energy bill is not as strong as many environmentalists would have liked, it’s exactly what we need and represents a clear step forward for environmental policy.

Henry Waxman and Ed Markey did a masterful job getting this bill through a very tough Energy and Commerce Committee that includes climate science contrarians and members of Congress who are sympathetic to coal and oil interests. Now that the bill moves through other committees and to the House floor, we hope to defend, improve, and pass the legislation.

Obama and his climate team know they need to walk into the international climate negotiations in Denmark with domestic legislation in hand. Otherwise, the United States will have a much harder time convincing delegates that it’s ready to act.

The progress we’ve seen in Congress is due, in part, to leadership from the White House. Obama’s push to have the Environmental Protection Agency use its power to regulate heat-trapping emissions also is pressuring members of Congress to act.

The consensus among most advocacy groups is that we need to work to strengthen the bill and ultimately pass it, while defending against moves to weaken it from across the political spectrum. We also have to remember that it took many years to pass the Clean Air Act, which was later significantly strengthened through various amendments. This is probably the single best shot we’ll ever get at putting a cap on global warming pollution, and we need to take it.

Michael Brune

Michael Brune, Executive Director of the Rainforest Action Network.

I wanted so much to support the Waxman-Markey climate bill. I cheered when Congressman Waxman became chairman of the House Energy and Commerce Committee. And I believe it’s imperative we pass strong climate legislation this year.

But despite admirable incentives for hybrid and electric vehicles, improvements in efficiency, and some other initiatives, the current incarnation of the Waxman-Markey bill doesn’t do the job. For starters, it sets the wrong target: Scientists state that an atmospheric concentration of 350 parts per million of CO2 is the upper limit for a stable climate; this bill aims for 450. Moreover, although the international community is calling for cuts of 25 to 40 percent below 1990 levels by 2020, this bill aims for 4 percent.

The bill’s largest flaw, however, is the inclusion of 2 billion tons of carbon offsets annually. These offsets represent a massive loophole that will allow polluters to meet their carbon reduction obligations by paying someone else not to pollute, rather than reducing their own emissions. Experience shows that as much as two-thirds of the time offsets don’t work, particularly under current regulations in the agribusiness and forestry industries. A coal company could “offset” its pollution by paying a logging company to raze a rainforest for a palm plantation in Indonesia — destroying some of the most biodiverse ecosystems on earth, and releasing massive amounts of carbon. To succeed in the fight against climate change, we must reduce emissions from fossil fuels AND stop destroying rainforests.

On Nov. 10, 2008, soon after getting elected, President Obama gave his first speech on climate change. “Now is the time to confront this challenge once and for all,” he said. “Delay is no longer an option.” Full use of the offsets in the current climate bill would allow polluters to avoid any reductions in their emissions until 2026 — 17 years from today. Instead of settling for this bill, let’s keep fighting for change we can believe in.

Paul Hawken

Paul Hawken, Environmentalist, entrepreneur, journalist, and best-selling author.

Waxman-Markey is a landmark bill. To be clear it represents a direction, not a plan. But given American realpolitik, it is as good as anyone could have expected. For sure there are some fairly meaty bones thrown to Duke Energy and the coal industry for emissions and carbon sequestration, and there are other lobbyist accommodations. Who knows what will happen as it makes it way through Congress? But the bill brings us closer to European Union standards and in alignment with most of the rest of the developed world.

Critics who see it as lacking are right. Reducing U.S. carbon emissions by 17 percent by 2020 is insufficient. But legislation is not actually written in Congress; it is assembled there. One detects the fine hand of environmental and climate experts in the bill, not just big utilities. The provisions and language are accreted from people who have done the heavy lifting in unsung institutions and NGOs, and I for one am thrilled to see some of this work see the light of legislative day under the auspices of a president who will sign and support it vigorously.

My hope is that the bill will begin to form the basis of a more comprehensive energy strategy that will use physical instead of electoral metrics as the measure of validity, so that we can do away with coal, ethanol, and other money sinks. If I have a criticism, it is not with the overall bill but with the idea that this is a spending bill. It is an investment bill, and I wish we had a governmental accounting system that could distinguish between the two.

Michael Noble

Michael Noble, Executive Director of Fresh Energy, a nonprofit promoting clean energy.

For two decades, my overarching commitment has been an American economy that doubles or triples in size by 2040 to 2050, while CO2 is reduced to 10 to 20 percent of emissions today. The Waxman-Markey bill strives to retain this central integrity, and for all the bill’s flaws, Fresh Energy joins the vast majority of clean energy groups determined to pass it in the House of Representatives this month.

Indeed, several provisions in the Waxman-Markey bill fall far short of what Obama wants: a cap on global warming emissions, with 100 percent permit auctions on day one, and the huge majority of revenues dedicated to protecting middle-class buying power.

However, as the Senate begins its work, one of its highest priorities must be to retain the hard-won authority of the EPA to regulate CO2 from coal-fired power plants under existing law. The current version of Waxman-Markey eliminates EPA’s regulatory authority over existing and proposed coal plants under the Clean Air Act. Over the past few years, the threat of regulation has prevented coal construction because risky schemes face finance barriers. Some 27 coal plants in America are currently seeking permits that would belch CO2 for 50 years.

If that coal surge takes place, we will have to de-carbonize electricity at a much steeper rate from 2020 to 2050, and the hole we will have to dig out of will be much deeper. As James Hansen has often said, to begin to fix the climate then will no longer be possible, since it’s barely still possible today.

With the deals and commitments already made, there may be no opportunity to fix Waxman-Markey in the House before passage. But this bill must be fixed in the Senate before it gets to the president’s desk.