Climate change on the horizon

by Jay Sjerven
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WASHINGTON — The introduction of the Kerry-Boxer climate change bill in the Senate on the same day, Sept. 30, the Environmental Protection Agency announced a proposed rule asserting its authority to regulate greenhouse gas emissions from the nation’s largest industrial facilities underscored increased momentum for change in the way energy is generated and consumed in the United States. Food industry association executives encouraged business to engage in the process of crafting responsible and fair climate change and energy legislation.

Senator Barbara Boxer of California, chairwoman of the Senate Committee on Environment and Public Works, and Senator John F. Kerry of Massachusetts, chairman of the Senate Committee on Foreign Relations, jointly introduced the Clean Energy Jobs and American Power Act, framing the bill as essential for U.S. economic and national security.

"This is a security bill that puts Americans back in charge of our energy future and makes it clear that we will combat global climate change with American ingenuity," Mr. Kerry said. "It is our country’s defense against the harms of pollution and the security risks of global climate change."

The Kerry-Boxer bill sets a goal of reducing greenhouse gas emissions 20% by 2020 compared with 2005 levels, more ambitious than the 17% target set by the House of Representatives in its American Clean Air and Security Act (H.R. 2454), which passed by a narrow margin in June. Each bill calls for a reduction in greenhouse emissions by 80% from 2005 levels by 2050.

Like the House bill, the Kerry-Boxer bill would accomplish the reduction by means of a cap-and-trade system. The Senate bill refers to this as a pollution reduction and investment system. In the case of the Senate bill, the system initially would apply to around 7,500 facilities that account for nearly three-quarters of U.S. carbon emissions. Exempted would be farms and small businesses that emit less than 25,000 tons of carbon-based pollutants.

Covered companies would buy and sell emission vouchers. If a company requires more time to reduce its carbon emissions, it may pay for the right to keep emissions at current levels while it works toward reduction. Alternatively, if a business decreases emissions quickly and affordably, it would be rewarded through the sale of its unused vouchers. The allocation of vouchers was not spelled out in the Senate bill, which will be the subject of hearings and input from six Senate committees.

"We look forward to working with Senator Boxer and Senator Kerry to craft legislation that addresses the challenges posed by climate change and that meets the world’s growing food security needs," said Pamela G. Bailey, president and chief executive officer of the Grocery Manufacturers Association. "In particular, we look forward to working with Congress to ensure climate legislation provides food, beverage and consumer product goods manufacturers with a fair share of the emission allowances and to ensure offset provisions do not inadvertently cause farmers to fallow or reforest millions of acres of cultivated land at home and abroad. I am confident Congress can craft climate legislation that will not pit our climate security needs against our food security needs."

The E.P.A. announcement was made by Lisa P. Jackson, administrator, in a keynote address at the California Governor’s Global Climate Summit. Ms. Jackson said her agency’s proposal would require large industrial facilities that emit at least 25,000 tons of greenhouse gases a year to obtain construction and operating permits covering those emissions. The permits must demonstrate the use of best available control technologies and energy efficiency measures to minimize greenhouse gas emissions when facilities are constructed or significantly modified.

"By using the power and authority of the Clean Air Act, we can begin reducing emissions from the nation’s largest greenhouse gas-emitting facilities without placing an undue burden on the businesses that make up the vast majority of our economy," Ms. Jackson said. "This is a commonsense rule that is carefully tailored to apply to only the largest sources — those from sectors responsible for nearly 70% of U.S. greenhouse gas emissions sources."

The large facilities the proposed rule would cover include power plants, refineries and factories. The E.P.A. said small businesses, including farms, would not be included in the new requirements.

The Supreme Court in 2007 held the E.P.A. had regulatory authority over greenhouse gas emissions under the Clean Air Act, and the current administration indicated it would use that authority in the effort to curb emissions.

Scott Faber, vice-president of federal affairs at the G.M.A., said the nearly simultaneous rollout of the Senate climate change bill and the E.P.A.’s announcement of its proposed rule demonstrated the importance of business being involved in the decision-making process.

The Supreme Court ruling affirming greenhouse gas emissions may be regulated under the C.A.A. already has changed the "status quo," Mr. Faber said. Business must decide whether it makes more sense from an environmental and cost point of view for there to be a truly fair cap-and-trade system that may preempt further E.P.A. regulation or to await a "roll the dice" under E.P.A. rulemaking.

This article can also be found in the digital edition of Food Business News, October 13, 2009, starting on Page 28. Click here to search that archive.

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