Panel OKs cap-and-trade proposal

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By Edward Felker

President Obama's plan to arrest U.S. greenhouse-gas emissions took a historic step Thursday as the House Energy and Commerce Committee passed a plan to reduce carbon-dioxide emissions and establish a marketplace that would allow companies to buy and sell the right to pollute.

By a mostly party-line, 33-25 vote, the powerful panel approved the landmark measure, which would create a so-called cap-and-trade system that would gradually shrink the amount of carbon dioxide released into the atmosphere as a way to temper global warming. Four Democrats voted against the bill, and one Republican, Rep. Mary Bono Mack of California, voted for the bill.

To help meet these goals, the measure would require utilities to produce about 15 percent of their electrical power from renewable energy sources, such as solar and wind, by 2025. The bill is designed to steer the nation away from fossil fuels and toward wind, solar, and other, cleaner forms of energy. New coal plants would have to meet new, low-carbon emission standards.

The legislation, one of President Obama's top priorities, will head to other House committees before it reaches the House floor, perhaps later this year. The Senate has been much slower to move on the issue because both Democrats and Republicans there worry about the economic impact of a cap-and-trade system.

Committee Chairman Henry A. Waxman, California Democrat, defended the legislation, which he devised with Rep. Edward J. Markey, Massachusetts Democrat, as a long overdue and carefully modulated plan that would help save the planet and create millions of "green" jobs in the U.S.

"There is a growing consensus on the need to act, and act we have done," Mr. Waxman said.

The Energy and Commerce Committee bill was opposed by committee Republicans, who called it a complicated energy tax that would do little to reduce carbon-dioxide levels. They also complained that the legislation, if enacted, would hurt the economy and boost unemployment.

Rep. Joe L. Barton of Texas, the committee's ranking Republican, said the bill will end the free-market allocation of energy resources in the United States.

"Those of you who support the bill, you have every right to believe those changes are necessary. For the sake of our nation, I hope to some degree you are right, I'm afraid that you're not, but we will see," he said.

The heart of the bill would impose mandatory, steadily declining limits on the emission of carbon dioxide and other greenhouse gases. It calls for a 17 percent cut from 2005 levels by 2020, 42 percent cut by 2030, and a 83 percent cut by 2050.

Mr. Waxman and Mr. Markey initially proposed a 20 percent reduction by 2020, but backed down to win the support of Midwest and coal-state Democrats, led by Rep. Rick Boucher of Virginia, who feared the loss of mining jobs and energy price increases.

To reach these targets, the bill would make a number of fundamental changes to the American energy market. It would:

• Create a multibillion-dollar cap-and-trade system for large emitters of carbon dioxide, including coal-fired power plants, large manufacturers and oil and gas companies. Affected companies would be permitted to send one ton of carbon dioxide into the atmosphere for each "allowance" they buy or receive for free from the federal government. Emitters could buy additional allowances from the government or from other allowance holders through a carbon trading market - thus the name cap-and-trade.

• Target emissions allowances in a way that would steer the nation away from traditional coal- and gas-fired power plants in favor of wind, solar and advanced coal plants that capture carbon dioxide and prevent it from going into the atmosphere. New coal plants would have to meet new, low-carbon standards.

• Require utility companies to use more renewable energy. By 2020, they would have to provide up to 15 percent of their electricity from renewable power and would have to cut consumption by at least 5 percent through efficiency improvements.

• Leave nuclear power facing an uncertain future. The bill includes no incentives for new nuclear plants, though it does allow new nuclear power generation to indirectly lower a state's requirement for producing more renewable energy.