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American Clean Energy and Security Act
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The American Clean Energy and Security Act (HR 2454, also known as the Waxman-Markey bill) was first introduced in the United States Congress in 2009. The bill proposed a cap-and-trade regulatory program to reduce emissions of specified greenhouse gases (GHGs) and hydrofluorocarbons (HFCs) in an effort to address global climate change risks. The bill also included other provisions designed to encourage clean energy development.[1]
The bill narrowly passed the United States House of Representatives on June 26, 2009. It was not taken up in the United States Senate.[2]
Legislative history
See bill: American Clean Energy and Security Act (H.R. 2454)
Representatives Henry Waxman (D-California) and Edward Markey (D-Massachusetts) introduced HR 2454 in the House on May 15, 2009. The bill was subsequently amended and reported by the House Committee on Energy and Commerce on May 21, 2009. On June 26, 2009, the bill passed the House by a 219-212 vote (three members did not vote). Of the 219 members who voted yes, 211 were Democrats and eight were Republicans. Of the 212 members who voted no, 44 were Democrats and 168 were Republicans.[2][3]
The bill was not taken up in the Senate.[2][4]
Components
Cap-and-trade program
According to U.S. Environmental Protection Agency, a cap-and-trade program is a "market-based policy tool for protecting human health and the environment by controlling large amounts of emissions from a group of sources." First, the program sets limits (i.e., a cap) on emissions. Then, emission allowances (i.e., authorizations to produce emissions) are granted to emission sources. Allowances cannot exceed the emissions cap. Emission sources are permitted to buy and sell emission allowances (i.e., allowance trading), which allows sources "to design their own compliance strategy based on their individual circumstances while still achieving the overall emissions reductions required by the cap."[5]
The American Clean Energy and Security Act proposed to amend the Clean Air Act to establish a cap-and-trade program for reducing greenhouse gas (GHG) emissions from those sources covered by the law (hereafter referred to as "covered entities"). Covered entities would have become subject to the act's cap-and-trade provisions over a four-year period beginning in 2012 and ending in 2016. The Congressional Budget Office estimated that approximately 7,400 facilities would be subject to the cap-and-trade provisions set forth by the bill. By 2016, the cap-and-trade system would have applied to sources producing approximately 85 percent of the nation's total GHG emissions.[6]
The act designated the following as GHGs: carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, perfluorocarbons, nitrogen trifluoride, and hydrofluorocarbons (HFCs). HFCs would have been subject to a cap-and-trade program separate from that mentioned above.
The table below summarizes GHG emission allowances under the act.
| Emission allowances (in millions1) | |
|---|---|
| Year | Emission allowance |
| 2012 | 4,627 |
| 2013 | 4,544 |
| 2014 | 5,099 |
| 2015 | 5,003 |
| 2016 | 5,482 |
| 2017 | 5,375 |
| 2018 | 5,269 |
| 2019 | 5,162 |
| 2020 | 5,056 |
| 2021 | 4,903 |
| 2022 | 4,751 |
| 2023 | 4,599 |
| 2024 | 4,446 |
| 2025 | 4,294 |
| 2026 | 4,142 |
| 2027 | 3,990 |
| 2028 | 3,837 |
| 2029 | 3,685 |
| 2030 | 3,533 |
| 2031 | 3,408 |
| 2032 | 3,283 |
| 2033 | 3,158 |
| 2034 | 3,033 |
| 2035 | 2,908 |
| 2036 | 2,784 |
| 2037 | 2,659 |
| 2038 | 2,534 |
| 2039 | 2,409 |
| 2040 | 2,284 |
| 2041 | 2,159 |
| 2042 | 2,034 |
| 2043 | 1,910 |
| 2044 | 1,785 |
| 2045 | 1,660 |
| 2046 | 1,535 |
| 2047 | 1,410 |
| 2048 | 1,285 |
| 2049 | 1,160 |
| 2050 and each year after | 1,035 |
| Difference from 2012 to 2050 | -3,592 |
| Percent difference from 2012 to 2050 | -77.63% |
| 1Figures rendered in millions of metric tons carbon dioxide equivalent. Source: American Clean Energy and Security Act (H.R. 2454) | |
Energy tax credits and rebates
According to the Congressional Budget Office, Implementation of these cap-and-trade programs was expected to increase energy costs at the household level. To offset this cost increase, the American Clean Energy and Security Act would have created a tax credit and rebate program for low-income families. The credit's value would have been calculated by determining "the average loss of purchasing power for the poorest fifth of people caused by higher prices for energy and other goods."[1]
Renewable electricity standard
The act would have also mandated that some retail electricity suppliers produce an increasing share of their electricity from renewable sources (e.g., wind, solar, geothermal, biomass, etc.). In 2012, suppliers would have been required to generate 6 percent of their electricity from renewable sources. In 2020, the share of electricity generated from renewables was set to increase to 20 percent. This requirement was to be known as the renewable energy standard (RES). In lieu of increasing the percentage of electricity generated from renewables, suppliers would have also been able to purchase renewable energy credits (RECs). One REC would have been allocated for each megawatt hour of electricity generated from renewables. These credits could then be traded between suppliers and used to satisfy RES requirements. In addition, suppliers could meet up to 40 percent of their RES requirements by demonstrating "reduction in their customers' electricity consumption through qualified energy-efficiency projects."[1]
Suppliers who failed to meet RES requirements would have been subject to payments of $25 per megawatt hour needed to meet the requirements (the amount would have been adjusted for inflation on annual basis). The bill would have required states to use these funds "to support the deployment of technologies to generate renewable energy and the implementation of energy-efficiency programs."[1]
Budget impact
According to the Congressional Budget Office, the American Clean Energy and Security Act would have had the following impact on revenues, direct spending, and the budget deficit had it been enacted.[1]
| Estimated budget impact ($ in billions) | ||||
|---|---|---|---|---|
| Year | Estimated revenues | Estimated budget authority (direct spending) | Estimated outlays (spending) | Estimated deficit impact1 |
| 2010 | 0.9 | 1.0 | 0.3 | 0.6 |
| 2011 | 39.1 | 33.4 | 32.9 | 6.1 |
| 2012 | 59.1 | 51.9 | 51.6 | 7.5 |
| 2013 | 63.5 | 67.5 | 67.7 | -4.2 |
| 2014 | 90.6 | 88.7 | 88.8 | 1.8 |
| 2015 | 104.0 | 102.1 | 102.2 | 1.8 |
| 2016 | 112.3 | 110.0 | 110.0 | 2.4 |
| 2017 | 117.6 | 116.1 | 116.1 | 1.5 |
| 2018 | 126.1 | 122.9 | 122.9 | 3.2 |
| 2019 | 132.3 | 128.8 | 128.8 | 3.5 |
| 2010-2014 | 253.2 | 242.6 | 241.3 | 12.0 |
| 2010-2019 | 845.6 | 822.6 | 821.2 | 24.4 |
| 1"Positive numbers indicate decreases in deficits; negative numbers indicate increases in deficits."[1] Source: Congressional Budget Office, "H.R. 2454 - Cost Estimate," June 5, 2009 | ||||
See also
External links
- American Clean Energy and Security Act (H.R. 2454)
- Congressional Budget Office, "H.R. 2454 - Cost Estimate," June 5, 2009
- Congressional Research Service, "Greenhouse Gas Legislation: Summary and Analysis of H.R. 2454 as Passed by the House of Representatives," July 27, 2009
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 Congressional Budget Office, "H.R. 2464 - Cost Estimate," June 5, 2009
- ↑ 2.0 2.1 2.2 The Library of Congress, "Bill Summary and Status - 111th Congress (2009-2010) - H.R. 2454 - All Congressional Actions," accessed August 12, 2014
- ↑ The New York Times, "House Vote 477 - H.R. 2454: On Passage," accessed August 12, 2014
- ↑ The New York Times, "Democrats Call Off Climate Bill Effort," July 22, 2010
- ↑ U.S. Environmental Protection Agency, "Cap and Trade - Basic Information," accessed August 12, 2014
- ↑ Congressional Research Service, "Greenhouse Gas Legislation: Summary and Analysis of H.R. 2454 as Passed by the House of Representatives," July 27, 2009
