House Panel Approves Climate Change Bill

Congress took a big step toward passing a climate change bill Thursday night. A House committee approved a sweeping measure that would reduce greenhouse gas pollution 17 percent by the year 2020. It would also promote the production of a lot more electricity from renewable power — like wind and solar.

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Members of Congress took a big step toward forcing a change in the way we use energy. A House committee approved a bill as thick as a history book. It's designed to battle climate change. It would instruct industries to sharply reduce their greenhouse gas pollution over time.

The bill promotes wind and solar power. And companies like electric utilities would have to get creative or pay a higher and higher price for the right to pollute.

NPR's Elizabeth Shogren reports.

ELIZABETH SHOGREN: It was a grueling four-day debate with 94 amendments considered and sessions lasting until midnight. House Energy and Commerce Committee Chairman Henry Waxman from California managed the debate.

Representative HENRY WAXMAN (Democrat, California): When this bill's enacted into law, we'll break our dependence on foreign oil, make our nation the world leader in clean energy jobs and technology and cut global warming pollution.

SHOGREN: Republicans offered one amendment after another to dilute the bill. Most were rejected. They wanted provisions to cancel the bill if industries moved abroad or electric bills got too expensive. John Shimkus from southern Illinois showed a photo of coal miners whose jobs, he said, would be in jeopardy because the bill would make burning coal too expensive.

Representative JOHN SHIMKUS (Republican, Illinois): This amendment says if these guys get screwed, we're going to have an off-ramp to protect jobs.

SHOGREN: The House bill would create what's called a cap and trade program. This is how it would work. The government would set a cap or limit on pollution and tighten it over time. The government would also create a market where companies would buy and sell the right to pollute. Companies would need what's called an allowance for every ton of carbon dioxide or other greenhouse gas they emit.

Jeff Sterba is the CEO of PNM electric company in New Mexico and Texas.

Mr. JEFF STERBA (PNM Resources): If you can reduce your carbon use for less than the going price of carbon, you're going to do that and then you'll sell allowances.

SHOGREN: Companies that had a harder time cutting emissions would buy those allowances.

Mr. DAVID DONIGER (Natural Resources Defense Council): So the marketplace finds the cheapest way to get the job done.

SHOGREN: That's David Doniger from the environmental group Natural Resources Defense Council.

During President Obama's campaign he said he wanted to sell all the allowances to polluters in an auction. But this bill gives most of them away. Doniger says the allowances are allocated in a way to protect consumers and keep industrial jobs in America.

The biggest chunk of allowances will go to electric utilities to avoid big rate increases for customers. Sterba from PNM power company says, in most states rates are approved by regulators.

Mr. STERBA: And you can better believe that the regulator is going to ensure that the full value of that goes back to customers.

SHOGREN: Some allowances would go to natural gas and heating oil businesses, others to companies like steel mills that use a lot of energy and could lose out to foreign competitors if they increase their prices.

Distributing the allowances was crucial to winning enough votes to pass the bill. For example, representatives from the Midwest demanded a share for automakers, and Texas lawmakers insisted on some for oil refiners.

Professor ROBERT STAVINS (Harvard University): Essentially, it's a political decision and they're taking political action.

SHOGREN: Harvard University economist Robert Stavins says that's okay because a cap and trade system will help the environment whether allowances are sold or given away.

Prof. STAVINS: Since the allocation does not affect environmental performance and does not affect the overall cost to the country, then the Congress can and should do what it takes to build the coalition, to give sufficient support, to put meaningful climate policies in place.

SHOGREN: The full House is expected to vote on the bill this summer. President Obama supports the measure, but it's not clear whether there will be enough support in the Senate to get it to his desk.

Elizabeth Shogren, NPR News, Washington.

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