This week in green energy: ACES!

The week ended with passage by the House of Representatives of the American Clean Energy and Security Act (ACES), a historic vote that brings the U.S. a step closer to enacting a much awaited climate change law. The vote was tight — 219 to 212 — with 44 Democrats breaking party ranks and voting against the legislation, underscoring the uncertainties the bill faces as the debate now moves to the Senate.

If enacted, the provisions of ACES, also known as the Waxman – Markey bill, could fundamentally transform how the U.S. generates its energy and impact every corner of the economy. At its heart is a controversial cap-and-trade provision that will allow energy dependent industries to purchase permits to emit CO2 and other green house gases. The price of the permits is cheap. To get the bill to the floor for a full House vote, co-sponsors Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) agreed to give almost all of the permits to utilities and other industries for free. Over time, the price of the permits will increase, incentivizing polluting industries to cut emissions.

When the bill was first presented to Energy and Commerce Committee members back in the spring, co-author Waxman expected cap-and-trade to raise as much as $640 billion, and even that was a conservative estimate. The Obama administration was actually counting on this new revenue to fund clean energy generation.  Some of the proceeds were to fund the much touted “middle class tax cuts.” It’s this sort of compromise and other last minute agreements — handing over authority of a multi-billion carbon offset program to the Department of Agriculture instead of the Environmental Protection Agency –  that have led to some environmental groups, including Greenpeace, to come out against the bill.

In a statement, the advocacy group wrote:

“To support such a bill is to abandon the real leadership that is called for at this pivotal moment in history. We simply no longer have the time for legislation this weak.”

While Greenpeace’s arguments are valid, they forget the fact that getting a climate change bill approved by a federal legislature is in itself an achievement, impossible to imagine even a few months ago. The reality is that despite much goodwill from the White House and growing popular mobilization, global warming and climate change continue to have their legion of skeptics, and unlike Europe, where there is a wider consensus supporting the reality of climate change than in the U.S., the debate is far from settled.

Therefore, against this backdrop, the goal all along for this uber pragmatic White House was to get a climate change law in the books, not the climate change law “of record.” Getting climate change voted into law will be a first step that will kick start long-awaited carbon reduction programs.  Most importantly, it will make it easier to, over time, enact more ambitious legislation.  In an interview back in April, White House science adviser John Holdren best summed up the thinking inside the West Wing as he told the Washington Post that a law with some clout was better than nothing at all.

“The idea, obviously, is to end up with a bill that reflects both the thinking of Congress and the administration, a bill that the president can sign.”

The White House is  a vote away from making that goal possible.  But getting a majority of Senators to back relevant climate change legislation will take coaxing and compromises that, if not checked, could render the bill pointless.

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