// Update: 25 June 2009 Letter to the House

Below are key points (and lots of them) from Bruce Josten's letter to the House today on the Waxman-Markey bill, the full letter is here.

...Despite opposition to this specific bill as currently crafted, the Chamber strongly supports comprehensive legislation to reduce emissions of greenhouse gases while providing for a strong American economy. The Chamber also supports negotiation of a global accord to reduce emissions of greenhouse gases as the best approach to tackling this global issue. The Chamber applauds the Obama administration for working toward a new international agreement.

The Chamber believes that domestic legislation should:

• Balance environmental objectives with the need for economic growth and job creation;
• Promote technology development and deployment;
• Reduce barriers to the development of climate-friendly energy sources;
• Promote energy efficiency; and
• Implement appropriate steps to address the international nature of global emissions.

H.R. 2454 would not achieve these goals. Specifically, the Chamber believes H.R. 2454 must be modified to take into account several important considerations:

• Carbon-based fuels are and will remain for decades to come the backbone of the U.S. energy system. H.R. 2454 must do a better job of ensuring that cost effective and reliable renewable and alternative energy sources are developed and deployed to smooth a transition to a low-carbon energy future. The Chamber recommends adding a provision that would streamline the siting and permitting process that would help eliminate the “green tape” that now delays energy projects, even renewable ones.
• International cooperation remains a major stumbling block to addressing global climate change. H.R. 2454 must be conditional on an international treaty that sets binding commitments for all major emitters - from both the developed and developing world - while ensuring that every nation retains the flexibility to attain those commitments however it chooses. Unconditional domestic legislation without an international agreement will remove any leverage U.S. negotiators have in international climate change negotiations, and would put domestic industries at a competitive disadvantage.
• It is expected that the Ways and Means Committee manager’s amendment to H.R. 2454 will include tariffs on carbon-intensive imports. Such provisions should be rejected because they would likely be deemed to violate U.S. obligations as a member of the World Trade Organization and could spark a trade war...
• Dangerous provisions in H.R. 2454 that could lead to widespread lawsuit abuse should be removed or mitigated...
• This legislation must equitably allocate credits to the refinery sector. Oil refineries bear a compliance obligation under H.R. 2454 for more than 40 percent of covered CO2 emissions - refiners’ own emissions plus the emissions generated when the fuels they refined are eventually burned by consumers - yet would receive only 2.25 percent of the allocations...
• The renewable electricity standard (RES), along with many of the other mandates in the bill, will add costs and distort the workings of the carbon market the bill would establish. If the objective is to allow the market to work to find the lowest cost solutions, picking technology winners and losers like this bill does is not the way to go about it...
• The bill should include nuclear energy as an "other qualifying energy resource" in the RES. There is no good reason for keeping nuclear energy, an emissions-free energy source, out of the RES...
• H.R. 2454 must be revised to fully and permanently protect America’s 27 million small businesses from being forced to comply with costly, burdensome New Source Performance Standards (NSPS) for greenhouse gases...
• The legislation must fully and permanently preempt state and regional greenhouse gas programs. Delaying these programs for five years accomplishes very little...
• This bill will clearly have a cost, and while free allocations may keep some prices down, others will skyrocket. A May 2009 study released by the National Black Chamber of Commerce estimates annual drops in gross domestic product (GDP) of $170 billion in 2015, $350 billion in 2030, and $730 billion in 2050. More troubling is the effect on jobs, as the study concludes that 2.3 million to 3 million net jobs will be lost - a figure that accounts for all the "green" jobs created. Provisions should therefore be included in H.R. 2454 to safeguard against devastating economic losses...
• The derivatives provisions in H.R. 2454, which as written would hinder the ability of companies to use over-the-counter (OTC) derivatives to manage risks associated with day-to-day operations, should be removed...
• Remove Section 356 of Subtitle E which would impose a user fee on transactions cleared through derivatives clearing organizations (DCO). This transaction tax would adversely impact liquidity on U.S. futures exchanges, because it would fall disproportionately upon the market makers who provide liquidity to the exchanges through the frequency and speed of their transactions...
• Remove provisions in H.R. 2454 applying the Davis-Bacon Act, a law that in no way furthers the United States’ ability to reduce climate emissions, and would result in diminished competition, shutting out many qualified minority, small, and non-union businesses from the entire market...

...The Chamber remains committed to working with Congress to achieve meaningful climate change legislation that provides a stable and growing economy, and promotes the development of needed new sources of energy and technologies across a range of industries.