Business, environmental interests advocate ‘emissions allowances’

| Friday, January 16, 2009

Environmental groups and business leaders announced a comprehensive set of recommendations for U.S. legislation on Thursday, Jan. 15, that would cut emissions but also could prove worrisome for trucking companies.

The U.S. Climate Action Partnership announced its recommendations in a document called A Blueprint for Legislative Action, which they say “echoes the sense of urgency that President-elect Obama has articulated regarding the need for a cap on greenhouse gas emissions.”

The plan’s centerpiece includes a mandatory, economy-wide cap-and-trade program that would issue emissions credits. The emissions credits could be bought by businesses that emitted more than they were allowed and could be sold by businesses that had surpluses.

The proposal has a heavy emphasis on transportation, and on capping emissions for all private businesses, which could translate to drastic expenses for trucking companies. The plan comes during a time when trucking companies, large and small, are skeptical of environmentally motivated changes that could affect their bottom lines.

Simply put, a generic cap-and-trade system allows the government to set limits on the amount of pollution a company can emit. Companies must have permits or credits from the government for the amount of pollution they are allowed to emit. It’s easier from some companies to meet or beat their pollution limit, so the cap-and-trade system allows them to sell their extra permits or credits to companies that pollute more.

OOIDA Director of Legislative Affairs Mike Joyce said OOIDA officials will be watching cap-and-trade proposals as closely as the EPA-enforced 2010 engine emission standards, which the Association has called the EPA to postpone so engine manufacturers can improve their methods of meeting the standard.

“We understand that there are significant players on Capitol Hill that are interested in carrying the environmental mantel forward in the next congress,” Joyce told Land Line.

“However, small-business truckers face an extraordinary number of challenges in today’s economy, and any potential law or regulation must address the cost expenses associated with meeting these new standards.”

Although acknowledging the downturn in the economy, testimony recently on Capitol Hill pressed forward for a cap-and-trade system.

“In the past, the U.S. has proven that we have the will, the capabilities and the courage to invest in innovation – even in difficult times,” said Jeff Immelt, chairman and CEO of GE. “Today, cap-and-trade legislation is a crucial component in fueling the bold clean energy investments necessary to catapult the U.S. again to preeminence in global energy and environmental policy, strengthen the country’s international competitiveness, and create millions of rewarding new American jobs.”

Several members of the coalition gave testimony before the House Energy and Commerce Committee.

Eileen Claussen, representing the Pew Center on Global Climate Change, said credits or allowances of emissions could be used to compensate those affected by climate change.

“Because total emissions are capped and allowances are tradable, the distribution of the allowances does not affect the environmental integrity or the direct costs of a cap-and-trade program, but it does directly impact the distribution of costs among regulated entities, consumers and others,” Claussen said.

The partnership’s “blueprint” also includes the following:

  • Require an 80 percent emissions reduction below 2005 levels by 2050, consistent with Obama’s proposal.
  • Use emissions allowances to protect consumers and businesses. “A significant portion of allowances should e initially distributed to capped entities and particularly disadvantaged economic sectors,” the report states.
  • Create incentives for technology development and deployment. Besides a cap and trade system, the “blueprint” details complementary measures for transportation and other industries needed to facilitate rapid technology transformation aimed at cutting emissions “across the economy.”

More information is available at www.us-cap.org.

During Thursday’s Committee meeting, Chairman Henry Waxman, D-CA, said Americans want to secure energy independence and be more environmentally responsible, but businesses especially are cautious during the current recession.

Waxman said action on global warming legislation is likely to happen soon.

“Companies are caught in a dilemma; they are reluctant to invest in old polluting technologies because they know that tougher regulations are inevitable, but they can’t invest in new cleaner technologies until they know what Congress is going to require,” Waxman said. “Our Committee will be acting quickly and decisively to reduce global warming and end our dependence on foreign oil. My goal is to pass comprehensive climate and energy legislation in the Committee before the Memorial Day recess.”

– By Charlie Morasch, staff writer
charlie_morasch@landlinemag.com