American Clean Energy & Security Act / Cap & Trade

H.R. 2454
BACKGROUND

The U.S. House of Representatives on June 26, 2009 passed the American Clean Energy and Security Act of 2009 (ACES Act), H.R. 2454, by a vote of 219 to 212. This comprehensive national climate and energy legislation would establish an economy-wide, greenhouse gas (GHG) cap-and-trade system and provide for critical complementary measures to help address climate change and build a clean energy economy. The bill has been sent to the U.S. Senate for consideration.

The Senate Energy and Natural Resources Committee, chaired by Sen. Jeff Bingaman (D-New Mexico) passed on June 17, 2009 an American Clean Energy Leadership Act (S.1462). This bill addresses several energy issues, including many addressed under the ACES Act. Several Senate Committees will be addressing aspects of a clean energy and climate bill. These measures will likely be combined to create the Senate counterpart to the ACES Act. If the Senate passes this combined bill, differences between the Senate and House bills would have to be reconciled, with the final bill passed by both houses, before the bill could be sent to President Obama and signed into law.

The "cap-and-trade" system set up by the bill would establish a marketplace in which companies would be able to buy and sell pollution permits to meet emissions limits. In addition, the sweeping bill plows billions of dollars into clean-energy technologies and energy-efficiency initiatives, such as electric vehicles and carbon capture and sequestration. The bill also requires electric utilities to meet 20% of their electricity demand through renewable sources by 2020.

The ACES would put in place the first national limit on greenhouse gas emissions. House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., one of the bill's chief sponsors, said lawmakers couldn't afford to lose what he called an historic opportunity to protect U.S. national security by investing in new sources of energy and combating global warming. "This legislation will create millions of clean energy jobs, put America on the path to energy independence, and cut global warming pollution," said Chairman Waxman. "Our goal is to strengthen our economy by making America the world leader in new clean energy and energy efficiency technologies."

The 1,500-page bill seeks to cut greenhouse gas emissions to 17% below 2005 levels by 2020 through a "cap-and-trade" system. By the middle of the century, it would cut emissions to 80% below 2005 levels.

President Obama has touted the bill as a job creator, saying that it will create incentives "that will spark a clean-energy transformation of our economy."

But Republicans have called the bill an energy tax on consumers and businesses that will wind up raising unemployment and moving jobs overseas as American companies struggle to meet the pollution caps. Even some Democrats – including House Agriculture Committee Chairman Collin Peterson of Minnesota – expressed deep reservations about the measure, saying it would saddle farmers and consumers with burdensome obligations.

The U.S. Chamber of Commerce has gone on record saying it does not believe the ACES bill (as currently drafted) will promote the development of needed new sources of energy and technologies across a range of industries. “ACES suffers from a number of critical flaws that could cause a significant amount of pain for American businesses while making little to no difference on global CO2 concentrations,” according to the Chamber.