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Home > News

Rep. McDermott Introduces Breakthrough Legislation on Climate Change

March 24, 2009

Rep. Jim McDermott (D-WA) today introduced The Clean Environment and Stable Energy Market Act of 2009, which offers a practical and pragmatic solution to reducing greenhouse gas emissions into the atmosphere, and will reduce emissions by 80% by the middle of the century. The breakthrough proposed by the senior Member of the House Ways and Means Committee is for America to pursue a course of action that does not create a new problem in its wake.

Under McDermott’s bill, HR 1683, producers of products and resources that emit greenhouse gases would be required to purchase a Federal Emission Permit. The permits would be available in an increasingly limited supply and the price for a permit would be established by the Secretary of the Treasury and periodically calibrated to ensure that demand for the permits does not exceed an annual, national allocation.  Simply put, McDermott’s legislation would reduce greenhouse gas emissions and avoid creation of a carbon derivatives market that could turn a potential energy solution into energy market chaos.

 “If you look back at an energy company like Enron and the sub-prime housing crisis, it’s clear that market speculation and manipulation were used to build a house of cards that collapsed and hurt a lot of decent, hard-working Americans,” Rep. McDermott said.  “Any proposed energy solution that ignores the lessons of history will be doomed to repeat them.”
The legislation, which the House Parliamentarian referred to the Committee on Ways and Means, has already attracted a lot of attention, including from the environmental organization, Friends of the Earth.  Brent Blackwelder, president of Friends of the Earth said,

“We offer our strong support for the approach presented in the Clean Environment and Stable Energy Market Act to set stable carbon prices while maintaining firm emission reduction targets.”

By establishing permits and a predictable price set by the Treasury Secretary, McDermott said the legislation provides market stability and certainty that will allow producers of greenhouse gas emissions to plan and change, because they can calculate their costs and return on investment as they reduce their carbon footprint.  Furthermore, establishing some price certainty is important for would-be investors in renewable energy production projects and efforts to improve energy efficiency.  The legislation calls for a five-year price schedule for permits to ensure stability and certainty and the legislation prohibits trading of permits.
“Fundamentally, this bill establishes firm limits on greenhouse gas emissions in a way that sends clear price signals that will both spur investment in new energy technologies and create new green jobs,” Rep. McDermott said. 

McDermott’s legislation also includes the creation of a new “Climate Protection and Economic Security Trust Fund” where revenue raised from the sale of permits would be deposited.  The trust fund could be used to provide economic security to vulnerable families and communities during the transition to a clean and renewable economy; and to provide seed money to nurture economic growth and clean energy production.

A copy of the legislation is attached.