Design flaws

29 June 2009 By Martin Hutchinson

The WaxmanMarkey bill passed Friday by the House produces no net revenue, imposes a leaky permits regime that will result in scams, mandates new Federal building codes and risks a trade war. It s also unlikely to reduce carbon emissions much. As a candidate, Obama knew better.

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On June 26, the US House of Representatives passed the American Clean Energy and Security Act of 2009, sponsored by Representatives Henry Waxman (CA) and Ed Markey (MA). The bill passed received 219 votes and 212 votes against.

Among the bill's components, it imposes tradable emission caps designed to reduce carbon emissions 17% by 2020 and 83% by 2050. It initially auctions only 15% of carbon emissions permits, giving the rest away to electricity distributors, tradeexposed industries, energy intensive firms, state governments, and others.

The bill also requires new buildings to be 30% more energy efficient by 2012 and 50% more energy efficient by 2016. It, allows 2bn tons of carbon offsets each year, split 5050 between domestic (primarily forestry and agriculture) and foreign carbon reduction purchases. And it withholds 13% of permits each year to build a strategic reserve to be used if permit prices spike upwards.

According to the Congressional Budget Office, WaxmanMarkey will be budget neutral over the next decade, ignoring its effects on GDP growth.

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