The American Clean Energy and Security Act of 2009 (ACES) was an energy bill in the 111th United States Congress () that would have established a variant of an emissions trading plan similar to the European Union Emission Trading Scheme. The bill was approved by the House of Representatives on June 26, 2009, by a vote of 219–212. With no prospect of overcoming a threatened Republican filibuster, the bill was never brought to the floor of the Senate for discussion or a vote. The House passage of the bill marked the first time the legislature had approved a bill intended to reduce greenhouse gas emissions.
The bill was also known as the Waxman-Markey Bill, after its authors, Representatives Henry A. Waxman of California and Edward J. Markey of Massachusetts, both Democrats. Waxman was at the time the chairman of the Energy and Commerce Committee, and Markey was the chairman of that committee's Energy and Power Subcommittee.
Summary of provisions The bill proposed a cap and trade system, under which the government would set a limit (cap) on the total amount of greenhouse gases that can be emitted nationally. Companies then buy or sell (trade) permits to emit these gases, primarily carbon dioxide . The cap is reduced incrementally over time to reduce total carbon emissions. The cap-and-trade program proposed by the legislation would reduce overall greenhouse gas emissions while generating revenue. A June 2009 analysis by the Congressional Budget Office (CBO) projected that the program would be deficit-neutral and would cost households an average of $175 per year.The legislation would set a cap on total emissions over the 2012–2050 period and would require regulated entities to hold rights, or allowances, to emit greenhouse gases. After allowances were initially distributed, entities would be free to buy and sell them (the trade part of the program). Those entities that emit more gases face a higher cost, which provides an economic incentive to reduce emissions. Key elements of the bill include:
Requires electric utilities to meet 20% of their electricity demand through renewable energy (such as wind, solar, and geothermal) and energy efficiency by 2020. 5% can be met through energy efficiency savings, with an additional 3% allowable with state-level certification. Subsidizes new clean energy technologies and energy efficiency, including renewable energy ($90 billion by 2025 for renewable energy subsidies), carbon capture and sequestration (CCS) technologies ($60 billion),"EPA Analysis of the American Clean Energy and Security Act." Environmental Protection Agency, 2009. https://archive.epa.gov/epa/production/files/2016-07/documents/hr2454_analysis.pdf electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion). Protects consumers from energy price increases. According to estimates from the Environmental Protection Agency (EPA), the reductions in carbon pollution required by the legislation will cost American families less than a postage stamp per day (less than $0.50 per day), about $13.20 a month, and $160.60 a year. It set the same target for reductions in emissions of carbon dioxide, methane, and other greenhouse gases as that proposed by President Barack Obama. The bill required a 17-percent emissions reduction from 2005 levels by 2020. There is a provision whereby 5% of this standard can be met through energy efficiency savings, as well as an additional 3% with certification of the Governor of the state in which the provider operates. Alternative compliance payments were $25/MWh in violation of the standard, adjusted for inflation beginning in 2010."EPA Analysis of the American Clean Energy and Security Act." Environmental Protection Agency, 2009.https://archive.epa.gov/epa/production/files/2016-07/documents/hr2454_analysis.pdf It included a renewable electricity standard (almost identical to a renewable portfolio standard, but narrowly tailored to electrical energy) requiring each electricity provider who supplies over 4 million MWh to produce 20 percent of its electricity from renewable sources (such as wind, solar, and geothermal) by 2020. There is a provision whereby 5% of this standard can be met through energy efficiency savings, as well as an additional 3% with certification of the Governor of the state in which the provider operates.
Alternative compliance payments were $25/MWh in violation of the standard, adjusted for inflation beginning in 2010.
It provides for modernization of the electrical grid. It provides for expanded production of electric vehicles and other advanced automobile technology. It mandates significant increases in energy efficiency in buildings, home appliances, and electricity generation.
The bill's cap-and-trade program allocates 85% of allowances to industry for free, auctioning the remainder. The revenue from these allowances will be used to finance conservation of tropical forests abroad and to support low-income households."Tropical Forest Conservation in Waxman Markey" . Stevenson, Andrew. June 9, 2009. Retrieved August 28, 2009. 30% of the allowances will be allocated directly to local distribution companies (LDCs) who are mandated to use them exclusively for the benefit of customers. 5% will go to merchant coal generators and others with long-term power purchase agreements.
Congressional Budget Office analysis A study in June 2009 by the non-partisan Congressional Budget Office (CBO) indicated that the bill would be roughly deficit-neutral for the government over the next decade:
The study also indicated that the tax burden on individual households would be limited:
The analysis did not attempt to quantify the environmental benefits of reduced greenhouse gas emissions. The report also stated that the "net financial impact of the program on households in different income brackets would depend in large part on how many allowances were sold (versus given away), how the free allowances were allocated, and how any proceeds from selling allowances were used. That net impact would reflect both the added costs that households experienced because of higher prices and the share of the allowance value that they received in the form of benefit payments, rebates, tax decreases or credits, wages, and returns on their investments." In other words, while a cap and trade system imposes costs on high emitters, it can generate revenues for low emitters that sell permits to them. While the government sets the bar on emission levels, the market determines who gains and who loses.
Public debate Supporters of and arguments for the bill The bill was supported by a number of environmental organizations including, the Defenders of Wildlife, the Alliance for Climate Protection, the Environmental Defense Fund,Climate 411 » Why This Is the Pivotal Climate Vote of Our Lives, Environmental Defense FundKey Features of the American Clean Energy and Security Act , – Environmental Defense Fund the National Wildlife Federation,NWF View National Wildlife Federation The Nature Conservancy,Climate Change – Climate Change: Climate Change Bill Heads to the House Floor The Nature ConservancyCarbon Cap: Who Supports It? , Environmental Defense Fund the Audubon Society, the Natural Resources Defense CouncilSwitchboard, from NRDC :: Michael Oko's Blog :: Climate and Energy Legislation: "Now is the Time to Act" , Natural Resources Defense Council and the Sierra Club. The League of Conservation Voters threatened to withhold endorsements from any representative who votes against the bill.
The Energy and Commerce Committee received letters of support from a broad range of organizations, including the United Auto Workers, Exelon, General Electric, Dow Chemical Company, Pacific Gas and Electric Company, and DuPont. The New York Times noted that "industry officials were split, with the United States Chamber of Commerce and the National Association of Manufacturers opposing the bill and some of the nation's biggest corporations, including Dow Chemical and Ford, backing it."
The Republicans for Environmental Protection (REP), a national grassroots organization, issued a press release after the vote stating "House passage today of the American Clean Energy and Security Act is a step in the right direction in the fight against dangerous climate change and for developing cleaner, more secure energy resources."Press Releases , Republicans for Environmental Protection (REP America) David Jenkins, REP vice president for government and political affairs, noted that "Doing nothing is not an option. The costs and risks of failing to limit greenhouse gas emissions are too high. We owe it to our country and to our country's future citizens to take action. Today, the House looked to the future and did the right thing for our economy, security, and environment."
The Environmental Protection Agency (EPA) estimated the discussion draft version of the bill to cost average households $98–$140 per year. According to an analysis by the Environmental Protection Agency (EPA), the overall economic impact of the cap-and-trade program on household consumption was projected to be modest. The EPA estimated that the program would reduce household consumption by 0.1% to 0.2% in 2020, which would translate to an average annual cost of approximately $80 to $111 per household."EPA Analysis of the American Clean Energy and Security Act of 2009." Environmental Protection Agency, June 2009. https://archive.epa.gov/epa/production/files/2016-07/documents/hr2454_analysis.pdf
Economist Paul Krugman argued for the bill in September 2009, while attacking the bill's opponents: "It's important, then, to understand that claims of immense economic damage from climate legislation are as bogus, in their own way, as climate change denial. Saving the planet won't come free (although the early stages of conservation actually might). But it won't cost all that much either." Economist Paul Krugman argued in favor of the cap-and-trade system, explaining that it creates a financial incentive for companies to reduce emissions by allowing them to sell excess permits. He noted, "Even when polluters get free permits, they still have an incentive to reduce their emissions, so that they can sell their excess permits to someone else." Krugman emphasized that cap-and-trade has been successful in other contexts, such as reducing sulfur dioxide emissions to combat acid rain.
Tia Nelson, Executive Secretary of the Wisconsin Board of Commissioners of Public Lands, testified before the House Energy and Commerce Subcommittee on Energy and Environment on April 24, 2009, in support of the American Clean Energy and Security Act. She emphasized the importance of federal action on climate change, stating, "Federal legislation is essential to addressing the growing risks of climate change." Nelson highlighted Wisconsin's state-led initiatives in renewable energy and emissions reductions as a model for national policy, demonstrating that meaningful progress could be achieved through innovative policies and collaborative action."Climate Change Legislation, Panel 4." C-SPAN, April 24, 2009. https://www.c-span.org/video/?285474-4%2Fclimate-change-legislation-panel-4=
Arguments against the bill