Analysts Debate Cap-and-Trade

By The NewsHour, The NewsHour - June 25, 2009

U.S. PRESIDENT BARACK OBAMA: The nation that leads in the creation of a clean-energy economy will be the nation that leads the 21st-century global economy.

JUDY WOODRUFF: The president chose the Rose Garden on a scorching Washington summer afternoon to press for passage of landmark climate legislation.

BARACK OBAMA: There's no longer a debate about whether carbon pollution is placing our planet in jeopardy. It's happening. And there's no longer a question about whether the jobs and industries of the 21st century will be centered around clean, renewable industry. The only question is, which country will create these jobs and these industries? And I want that answer to be the United States of America.

CONGRESSMAN: Madam Speaker, I rise today in strong support of the American Clean Energy and Security Act.

JUDY WOODRUFF: Democrats have spent weeks cajoling skeptical moderates and conservatives within their own ranks to support the bill. There has been much horse-trading as a measure was fashioned that could garner support.

The president acknowledged the political sensitivity of the bill in his remarks.

BARACK OBAMA: I know this is going to be a close vote, in part because the misinformation that's out there that suggests there is somehow a contradiction between investing in clean energy and our economic growth.

JUDY WOODRUFF: The 1,201-page measure may come to a vote tomorrow. It has as its centerpiece a so-called cap-and-trade system for carbon emissions that are the root cause of global warming. It would establish a market for the buying and selling of permits to pollute.

The bill calls for reducing greenhouse gas emissions by 17 percent over the next decade and by 83 percent by 2050. It would mandate power companies produce at least 12 percent of their electricity from renewable sources like wind and solar by 2020. And the bill would limit emissions from industrial polluters, but exempt agriculture from caps.

The senior Republican in the House, John Boehner, said Democrats don't have the votes for passage, and he blasted the bill in remarks this morning on Capitol Hill.

REP. JOHN BOEHNER, R-Ohio, House minority leader: When it comes to energy, the Washington Democrats, I think, are poised to make matters worse by imposing a job-killing energy tax, courtesy of Speaker Pelosi.

This is going to force small businesses and their workers and families to pay more for electricity, gasoline, and other products that are made in America that have a high energy content. This bill will also cost 2.3 million to 2.7 million Americans their jobs.

JUDY WOODRUFF: The speaker of the House said the bill would create, not eliminate, jobs, and she pointed to a Congressional Budget Office analysis that cited additional benefits.

REP. NANCY PELOSI, D-Calif., speaker of the House: What you should see is what the CBO put out about how lower-income people will benefit from this bill. They will not have any increase in their costs. So I am very proud of the bill; I think it takes us in the direction we want to go.

JUDY WOODRUFF: House Democrats are aiming to pass the bill tomorrow before they adjourn for the Fourth of July recess.

And Daniel Weiss, director of climate strategy at the Center for American Progress, he has worked for a number of environmental groups.

Thank you both for being with us. And, Dan Weiss...

DANIEL WEISS, Center for American Progress: Thank you for having me.

JUDY WOODRUFF: ... I'm going start with you first. You think this is a good bill. In brief, why?

DANIEL WEISS: This bill is about two big things: first, shifting investments into clean-energy technologies of the future, wind and solar power and energy efficiency; second, it's about saving consumers money.

EPA just came out with a study earlier this week that said it would save the average household about $84 in utility bills every year, and so it's going to create jobs, and save people money, and, by the way, fight pollution.

JUDY WOODRUFF: Karen Harbert, you point out that you and the chamber want cleaner energy, but this is the wrong way to do it.

KAREN HARBERT, U.S. Chamber of Commerce: Well, we do think it's the wrong way to do it. We want to have a cleaner environment, but we also want to have a healthy economy.

And I'm afraid that this legislation will make it more expensive for businesses to do business here at home. It will make them less competitive overseas. And that's not really smart policy, and particularly not at this economic juncture in our...

KAREN HARBERT: Well, the reason the bill is 1,200 pages and growing as we speak is because it's very complex. And they're proposing a number of offsets to industries that are going to bear more costs. And if they're going to be bearing more costs, they're going to pass those costs onto the consumer.

American business is not in the business of philanthropy, and so they're going to have to have somebody pay for these things, so it's going to be the consumer and the taxpayer.

JUDY WOODRUFF: The consumer is the one who's going to pay the bill?

DANIEL WEISS: Well, I appreciate Karen's arguments, but the Congressional Budget Office and EPA said the cost is going to be small overall, about the price of a postage stamp for overall products costs. And for electricity, the average consumer is going to save money. So I'm going to listen to the CBO and EPA and their independent analyses of what this bill will do.

Nobel Prize-winning economist Paul Krugman said that what this will do is this will actually jump-start our economy and help get the recovery going because it will stimulate investments in new industries.

JUDY WOODRUFF: How do you know that's wrong?

KAREN HARBERT: I don't know that mandates stimulate anything. Mandates are mandates to change behavior, and they're going to bring up costs for the business community to actually operate. If energy is going to be more expensive and products are going to be more expensive, that is, frankly, a cost that the consumer is going to bear.

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